For anyone who has made a purchase online, returns are part of the standard online buying process — so much so that, according to a recent U.S. Consumer Study, 85% of consumers check a company’s returns policy before even making a purchase when shopping online, and 68% of U.S. consumers wouldn’t repurchase from a brand after a poor returns experience. That same report identified the top aspects that U.S. consumers consider part of a good returns policy, which includes free returns (76%), store credit (69%) and multiple convenient returns options (53%).
It’s imperative that companies have a strategic returns process and policy in place to meet the needs of U.S. consumers and retain repeat customers. Read on for actionable steps your company can take to implement a sound returns policy that will have U.S. consumers coming back for more.
Steps to Building a Consumer-Friendly Returns Policy
- Offer flexible returns options: Flexibility in how returns are handled can significantly impact customer satisfaction. Incentivizing exchanges or store credit can cater to different customer preferences, which is crucial seeing as the majority of shoppers want this flexibility. This can include options like in-store returns for online purchases, box-free returns at specific drop-off locations or even home pickup services;
- Simplify the returns process: U.S. consumers value convenience and clarity. Ensure your returns process is straightforward, with clear instructions provided on your website. Consider offering a printable, pre-paid return shipping label or even a QR code that customers can use at drop-off locations without needing to print anything. The easier it is to return an item, the more likely customers are to shop with you again, even if their initial purchase didn’t work out;
- Extend the returns window: A longer return period can be very appealing to consumers who often seek flexibility in managing returns due to their busy schedules. Extending your returns window beyond the standard 30 days — perhaps to 60 or even 90 days — can provide a competitive edge, making customers feel more comfortable making a purchase decision;
- Use returns as an opportunity for engagement: Turn the returns process into a positive touch point by maintaining open communication. Send updates via email or text about the status of a return or exchange and consider including a personalized message or recommendation for other products they might like. This approach can transform a potentially negative experience into an opportunity for re-engagement and sales; and
- Analyze and adapt based on return reasons: Collect and analyze data on why customers are returning items. This insight can help you address common issues, whether they’re related to product quality, sizing inaccuracies or mismatched expectations due to online images or descriptions. Making adjustments based on this feedback not only reduces future returns but also improves customer satisfaction and trust in your brand.
Leveraging Your Return Policy to Retain Customers
Companies also can strategically leverage their returns process to retain repeat customers by making it a positive aspect of the customer experience. Here are several ways to achieve this:
- Hassle-free returns experience: Simplify the returns process as much as possible. A hassle-free returns policy, with clear, easy-to-follow instructions, can significantly enhance customer satisfaction. The process should be straightforward, with minimal steps for the customer to follow, and offer multiple return options (e.g., in-store, mail, drop-off points) to accommodate different preferences;
- Communication and transparency: Keep customers informed throughout the return process. Send confirmation emails when a return is initiated and updates when it is processed. Transparency about the status of their return, including any issues or delays, helps build trust and shows that you value their business;
- Leverage returns for feedback: Use the returns process as an opportunity to gather feedback on why items are being returned. This information can be invaluable for improving products, descriptions, sizing information and the overall shopping experience. Showing customers that their feedback leads to tangible improvements can also increase loyalty and encourage them to continue shopping with you;
- Personalize the experience: Personalization can go a long way in retaining customers. Based on the customer’s purchase and return history, offer personalized recommendations for other products they might like. A personalized discount on a future purchase, especially if an item didn’t meet their expectations, can also make customers feel valued and more likely to shop again; and
- Offer a loyalty program: Integrate the returns process with your loyalty program. For example, offer loyalty points for completed returns that can be used toward future purchases. This not only softens the blow of a return but also incentivizes customers to remain engaged with your brand.
By viewing the returns process not just as a necessary cost of doing business but as an opportunity to engage and satisfy customers, companies can turn potentially negative experiences into positive ones. This approach helps in retaining customers, encouraging repeat purchases and building a loyal customer base.
Advertisement
Free vs. Paid Returns: Weighing the Pros and Cons
There are clear benefits and drawbacks associated with both free and paid returns, and it ultimately comes down to what works best for your business model. Offering free returns can have the impact of increased customer confidence, enhanced customer satisfaction and loyalty, all while providing a competitive advantage. In markets where many retailers charge for returns, you can set your brand apart and make it more attractive to customers. This can be particularly effective for building a customer base in the early stages of business growth.
Drawbacks to offering free returns include increased costs for your company via returns processing, shipping, handling and restocking. There also is the potential for abuse of the free return policy, such as “wardrobing” — buying items with the intent to use and return — or over-ordering, which can lead to higher return rates and logistical challenges. Finally, it’s important to consider the environmental impact of frequent returns, which increases the carbon footprint of products with additional shipping and packaging waste.
To examine the flip side, paid returns have a range of benefits including reduced return rates, recouped costs and the encouragement of responsible consumer behavior. Charging for returns can discourage frivolous purchases and therefore promote more thoughtful purchasing, potentially reducing the environmental impact associated with the logistics of frequent returns.
Drawbacks of paid returns include creating a barrier to purchase, negative impacts on customer satisfaction and loyalty and the potential for a reduced competitive edge. Customers may be less likely to make a purchase if they are concerned about the cost of returning an item if it doesn’t work out. This can be particularly true for higher-priced items or when customers are shopping with a new brand.
The bottom line is that in sectors where competitors offer free returns, charging for returns can place a retailer at a disadvantage, potentially driving customers to shop with competitors instead.
Agop Ashjian is the CEO of Shipup, a company based in Paris and dedicated to elevating the post-purchase experience for online businesses. After stepping into the role following the company’s acquisition by Global Blue, Ashjian has been pivotal in steering Shipup toward greater customer engagement and worldwide expansion. Prior to Shipup, he ascended through various roles at Global Blue, gaining expertise in retail technologies and strategic operations, especially during his tenure overseeing the Global Blue RetailTech portfolio. Commencing his career at the Orange Group, Ashjian honed skills in financial modeling and strategic planning.
