As more brands are making the move online, consideration must be given to the entire product lifecycle. This includes the returns process.
Returns are an inevitable part of your business, and they play a vital role in the overall customer experience as customers in increasing numbers browse and buy online.
Not every product that every customer buys will be suitable and as a result, retailers must be able to process returns with speed and efficiency. Rather than being an overlooked aspect of the business, returns should be treated with the same importance as other areas of the business and given as much time and consideration as sales, marketing and manufacturing.
With the right approach, returns can be used as a tool not only to keep customers happy but to also maximise profits for businesses.
When consumers shop online, they have certain expectations. Being able to return purchases is just one of them. Organisations who actively embrace the returns process are more successful and profitable than those who don’t and, in an age, where returns are not only required but expected, the presence of returns can make all the difference between a successful venture and an unsuccessful one.
It is widely recognised in the retail sector that a good returns policy will affect the customer lifetime value in a positive way. Many customers will shop with the intention of returning one or more of their items so you must make it quick, efficient and easy for them to return an item if they wish to do so.
Product returns can be improved by implementing a comprehensive returns strategy.
The first element in your returns strategy is a policy. The returns policy should be a detailed document that outlines the terms and conditions of returns.
Acceptable Returns – Typically, this section will feature a list of items that can be returned (or can’t). Depending on what you sell, there may be restrictions on certain items that you will not accept for returns due to health, hygiene or other reasons. They could also include fresh, perishable items or those that were purchased as part of clearance or sale. Be very clear about which items (if any) are exempt from your returns policy.
Condition – You may also want to provide information on the condition of returned products and how you would like them to be returned. Conditions for accepting returned items may include things such as using the original packaging, what the rules will be about accepting products where the sales tags have been removed or when the customer has lost their receipt or proof of purchase.
Refund Type – Information on how the customer will be refunded should also be covered such as issuing a cash or card refund or whether the customer will be given a gift card or store credit for a future purchase.
Returns Window – A period of time the customer has to return an item. You may state a returns period of 14 days, 28 days or even longer. You may also want to state who covers the cost of returns shipping.
If your business is part of sustainability initiatives such as recommerce, state this in your returns policy.
The returns process should be made as easy as possible. If customers buy a product from you and the returns process is complex, frustrating and time-consuming, this may deter them from making a future purchase, or stop them recommending you to a friend or family member.
As well as making your returns process easy, try to offer as many ways that the customer can return their item as possible. This could include in-store returns or by courier.
Make the process fast and convenient. Provide a generous returns period, demonstrate a certain degree of flexibility in terms of receipts and include a returns shipping label that they can use so customers don’t have to print their own. Not everyone owns a printer. All of these things may only seem small, but they all add up to something much more significant and create an overall impression of your business.
Product returns strategies should feature lessons learned. Use the process as a way to gather feedback about your business and the products that you sell.
There are many reasons why people return items and many of them may be nothing to do with the product themselves, they may have ordered extra to compare or the same product in multiple sizes.
Where problems do occur, gathering feedback can help. It will help you identify issues such as products that have been damaged in transit, those that are faulty or defective, sizing might not be accurate for clothing, or the customer may have decided to purchase multiple items of different colours/sizes. You must take the time to find out why customers are returning and what they are returning. Include a form for the customer to indicate the reason for their return.
Collect this data and periodically analyse it so you can see the common themes that are occurring in the returns process. If it is a quality issue you may decide to switch to a new supplier, a problem with damaged goods upon arrival, you may look to change your courier or for quality issues, you may consider exploring new suppliers.
The data that you gather can also help to refine and improve returns processes even further.
Last, but by no means least is profitability. How do you make the returns process profitable?
If you are a large, ecommerce operation you may deal with many returns on a daily basis so it’s important to have a system in place that can cope with the volume of returns. In addition, it’s also helpful to have suitable strategies in place to determine what you will do with returned items.
There are several ways in which you can make the returns process profitable, from offering exchange or credit notes only, therefore keeping cash in your business, returning unwanted items back to stock quickly for resale and sending discontinued items to warehouses, stores or auctions to monetise your unwanted stock.
You can also use liquidators whereby stock is sold. Damaged stock can be returned to the manufacturer and unwanted items resold to other outlets using initiatives such as recommerce.
The returns process must be efficient and well documented if it is to operate seamlessly. While being profitable for the business, it must offer convenience to the customer. The returns process is just another part of the overall shipping experience that the customer has. An efficient returns process as well as an overall positive shopping experience will go a long way to attracting repeat business, loyal long term customers and referrals.