E-commerce tutorial: 7 steps to an efficient returns management process
On average, in the United Kingdom half of the products purchased online are returned to the seller. So, as a retailer, you are certainly aware that returns are a part of everyday life and concerns.
Although returns are unavoidable, if you keep track of what’s happening in your returns operation, there are ways to lessen the volume of what’s returned. Or, better said, to improve your returns rate.
An efficient returns management process can lead to fewer returns, satisfied and repeat customers, and even new revenue. Yes, that’s correct. New revenue!
In this blog post, you can expect to find a tutorial with 7 simple steps to optimize your own returns management. With it, you can start developing an efficient returns process that relieves your support team, delights your customers, and increases your sales.
Step 1: Returns are part of the online shopping experience
The path to efficient returns management starts in your head. Are returns annoying to you? Do returns mean costs? Or maybe time lost and a lot of effort? Well, first you need to give returns some of your time and attention.
Why should you invest some time in improving your returns process?
First of all, no matter how outstanding your products are, there will always be returns.
Think of yourself as a shopper. You fall in love with a product, read its description, and do the necessary measurements. However, you still did not experience how you feel about the product. So, the final shopping decision will only happen when the product arrives at our home, unlike offline sales. If the returns process is complex, then the shopping experience is also hard for the customer. And a difficult purchase transaction means a higher risk for customers.
- 67% of all customers check the returns page before purchasing online.
- A store where returns could be made without any problems is revisited by 92% of shoppers.
- Returning customers increase the value of their next shopping basket by up to 31%.
Secondly, returns offer an excellent touchpoint with your customers, allowing you to improve your relationship with them and strengthen your brand image. This is the moment when you will be able to surprise your customers.
Finally, as Greg Mckeown said, it’s important to place your efforts on what solves the problem: “It is about making the wisest possible investment of your time and energy in order to operate at our highest point of contribution by doing only what is essential”. If your support team spends 8 hours a day dealing with returns and is exhausted after that, maybe this energy was spent on the consequences of the problem.
Instead, what about focusing on how to prevent some returns in the first place? Or how to better organize the registration of the return? And then returns processing time? Automating your returns process can lead to internal time better spent and a better shopping experience.
Step 2: Build trust with transparent return policies
Before shopping, two-thirds of all store visitors read through the terms and conditions for returning. For this reason, when your return policies are hard to find, information is missing, or it is too difficult to understand what the legal terms mean, customers will be discouraged to purchase. Customers want protection against risks.
So, the return policies page is the first step to building trust with the customer. Therefore, it’s a very important step in your returns management process.
You need to share with your customers a simple and easy-to-understand explanation of your return conditions, and that can also display the characteristics of your brand. Use the same tone of voice and design present on your website, as returns are also part of the shopping experience.
Make sure you add the following to your return policies:
How long may the item be returned? (return window)
People usually think that a longer cancellation period (or return window) means a flood of returns. But, in reality, that is far from it! Studies show that a more generous return period leads to customers getting used to the item and then being more likely to keep it.
At 8returns, we can confirm this: We observe that with a return window of 14 days, the return usually arrives on the fifth day. With a return window of 30 days, the return arrives on average on the seventh day. We can conclude that the majority of customers will return the goods within the 14 days provided for by law. Also, the volume of items returned doesn’t change with a longer return window.
That’s why we recommend offering a longer return window because your returns won’t be impacted and you will have the chance to increase trust, resulting in more sales and revenue.
Is return shipping free of charge or paid?
Free returns are a positive thing for customers and ensure more sales in the long term, as it guarantees fewer risks for shoppers. Similar to a bigger return window, at 8returns we can see that free returns don’t result in a bigger volume of returns. Therefore, we recommend that you offer free returns at least for damaged or wrong items and items with missing parts.
Regardless of whether you offer free or paid returns, you should communicate the return costs transparently. Don’t forget to add individual information about shipping costs from different locations and carriers. It's important clients can access this information before buying on your return policies page, so they don’t surprise themselves when registering a return later on.
Which items can’t be returned?
Clear communication about return restrictions is also important: Are there any items that can’t be returned to the shop? It is necessary to specify which items can’t be returned and why.
In addition, explain if there are conditions for returning that need to be followed. Giving specific examples can be helpful: Is it okay to try on shoes, take them for a walk around town, and then return them? It is okay to open take the label off and then return the item?
How much time does a refund take?
Let your customers know in advance when they can expect their refund or exchange item. This way, you will get fewer inquiries from customers and will have to deal with fewer customer tickets, and will also have the opportunity to surprise customers with a faster process. In any case, don’t forget to add a buffer window.
Also, if possible, share with your customers that you will update them by email every step of the way. This will help you prevent customer service inquiries. If you are wondering how to do this, by using a returns management platform like 8returns, your customers are automatically informed about the current status of their returns.
What is the returns process?
After defining all your policies, now you are able to prepare a description for your customers. With a very concise explanation, share with your customers how the return process works. A step-by-step presentation can be very helpful. Here are some questions to help you:
- How does the customer start the return process? Email or a returns platform registration?
- How does the customer select what to do: refund, exchange, or store credit?
- How does the customer get the return shipping label?
- Do they have to pay for the shipping?
- How much time do they have to send back the item?
- How long does it take to inspect the return?
- And, finally, how long does it take to get a refund or store credit?
Don’t forget to add a clear call-to-action that can be used to start the return process immediately. A contact form, email information, or the link to your returns management platform.
Step 3: Accessible and digital registration process
Many shops still do the returns process semi-offline. They require customers to fill in a long return registration form with all the information regarding their orders. Unfortunately, this creates a lot of hassle for customers as not all shoppers have printers at home to print the registration form and later the shipping label. After that, shops still need to insert all the offline information in their systems to be able to track the item across all the operations.
Well, labels are inevitable. So how can you improve the efficiency of this process internally while offering a better experience to customers?
When done online, the returns process is faster and hassle-free. By using a returns management system, shoppers can register their returns from anywhere and without any printer. All the information is already gathered online and can be shared with logistics and ERP providers. Furthermore, you can offer a shipping QR code that can be scanned by the post office and warehouse.
Step 4: Collect return-related data to prevent returns
Collecting relevant return-related data is important to understand the reasons why customers are returning, improve your offer and reduce your return rate in the long run.
This includes basic information, such as the average number of returns per day. It can help you identify return peaks and optimize collaboration with your fulfillment partner. Product-specific return reasons or process-specific reasons, like damaged and wrong items, can be also very helpful to create a diagnostic.
Our customer Sternglas, for example, discovered that many female customers found the case of one of their products too thick. HÄNG understood that a product's color did not match the pictures in the store and was therefore increasingly exchanged. Both companies were able to rectify the problem and avoid numerous further returns.
Allow your customers to comment on why they are returning a product, either in an email or - much more efficient for customers and support - in your returns management platform.
Step 5: Integrate return information
E-commerce platform, ERP, marketing, customer tickets, and loyalty program systems. And your logistics providers or 3PL carriers. It takes a lot to build an integrated and smooth operational process ad the returns process needs to be inserted into the workflow of all these tools. So, the less manual it is to keep the information updated between all systems, the better for your business.
This means integrations play a big role in returns management. When selecting a returns management platform, don’t forget to check the integration effort as well.
Step 6: Use real-time tracking and update customers regularly
Once a return is on its way, an unpleasant period of waiting begins for customers: they have already handed in the goods, but have not yet received their money back. This causes frustration and always carries the risk of losing a buyer if there are problems in the mail or in logistics.
Therefore, for the sake of customer satisfaction and an efficient returns process, we advise you to send regular status updates to customers via email. Inform them when the return has arrived at your warehouse, when its condition has been checked, and when the refund has been initiated or the new product was sent on its way.
To avoid overburdening your support with so much correspondence, 8return is a returns management platform that sends emails automatically when you update the status of the order. These emails can be adjusted according to the shop’s brand and corporate design and can be turned on and off directly by the shop.
Furthermore, a returns platform also offers you some advantages: Your customer service and fulfiller are always up to date and can answer questions about a return in a targeted manner.
Step 7: Offer more options besides refunds
Other return types (Exchanges, Store credit, and Repairs) can allow more flexibility for customers, promote repeat customers and help you retain revenue. Customers that liked their products, but would like a different color or size can fast-track the exchange process by selecting the Exchange option. Or, customers that would like to have the freedom of using the same amount for a new product later can select the Store credit option.
At 8returns, shops that offer these return types retain 30% of the returns revenue on average. Better yet: With us, a new operational process for these return types is not needed, as all returns are processed by the same portal and tracked via the same dashboard.
An efficient returns management process means more satisfied customers and sales
Are you ready to start? These seven steps can help you focus on what matters most: improve the experience you provide to customers. In the end, it results in a relieved support time, satisfied customers, more revenue retention, and repeat purchases.
Not to mention, the more you automate the returns process, the more efficient it will become. You will spend less time replying to customers or updating manually your systems, and more time understanding why items are being returned in the first place.
Cover image from Pixabay, more images from Monstera.