E-Commerce Returns - Best Ways to Manage Them

In the new world where everyone is gravitating towards digital shopping, businesses are quickly rising to the situation by replicating a seamless shopping experience online. One side-effect of this is e-commerce returns, as customer’s doorstep is not always the product destination and customers would also want to replicate the trial experience. This might prove very costly if businesses are just aping their competitor’s strategies without evaluating their customer expectations.

Though product returns are inherent, retailers should focus on optimizing the costs while not compromising on the customer experience as this will greatly affect both their profitability and customer loyalty. One-way retailers can achieve it is by taking a holistic approach and embracing a two-pronged strategy: 

1. Understanding the pain points and formulating strategies to reduce the returns
2. Creating an effective returns handling framework to optimize returns management

Pain Points and Strategies to Minimize E-Commerce Returns:​​

E-Commerce returns are initiated either due to genuine issues from the retailer’s end or due to the irrational buying behavior of certain customers. Retailers must consider these two situations differently and formulate respective strategies. They can do it by categorizing returners, based on their purchase intent, into three broader segments (namely Sincere Returners, Serial Returners, and Fraudsters) and then take category-specific actions to reduce overall return rates. 

Businesses can use metrics like per-order purchase value and the total number of returned items and set thresholds to segment returners as above. 

Sincere Returners:​​

These customers typically want the product ordered but are being compelled to return the item because of the issues from the retailer’s end like 

• The product received by them looks different from the website description
• They received the wrong item
• The product did not meet their expectations
• They changed mind once they received the item
• They received damaged /defective product
• The product arrived too late – they do not need it anymore

Action: Retailers can follow the below tactics to take control of the above situations and reduce genuine product returns 

• Provide brief and accurate product descriptions (the size, the fit, the specifications, etc.,) and upgrade it continuously based on customers’ feedback – sets realistic expectations
• Provide high-quality visuals with a 360-degree view of the product along with the ability to zoom into the picture to enable the customer to make an informed decision
• Gather feedback from customers on reasons behind e-commerce returns to understand the pain point and reduce the incidence of similar issues going forward
• Encourage product ratings, and reviews as many prospective customers turn to reviews before making a purchase
• Review FAQs and customer inquiries to check for common questions on specific products and include it in product description page
• Check orders for damages and accuracy before delivery to decrease returns due to internal mistakes
• Focus on the packaging to minimize product damages (wrinkled apparels/ broken glass products, etc.,) during transit and delivery
• Deliver products on time with tracking capabilities to reduce customer disappointments

Serial Returners:​​

These types of customers return the products very frequently. Some of them suffer from an inability to control their shopping behavior (Opportunists), while others have dishonest intentions (Wardrobers) 

Opportunists: These people try to replicate the brick and motor store experience at home by deliberately over ordering multiple versions of the same product so they could make up their mind when delivered. This phenomenon is quite common in the apparel industry due to the availability of multiple sizes and colors of the same product.

Action: Depending on the optimal business trade-off between delivery costs and user experience, retailers can put a limit on the number of similar product variants that can be ordered by a single customer id. 

Wardrobers: These people order an item with the intent to use it once and then return it for refund. This type of incident often occurs with expensive items the buyer cannot afford to own.

Action: Retailers can address this issue by having only a partial refund for premium products beyond a certain time. 

Fraudsters: ​​

These people try to cash the money by returning the fake version of the original products. This happens particularly in the electronic industry where fraudsters try to send older or cheaper versions of smartphones or other electronics. 

Action: Businesses should have a quick validation policy for products prone to such activity and monitor the user’s historic behavior to be able to predict any such occurrence. 

Effective E-Commerce Returns Handling Framework: ​​

Retailers can manage returns and improve customer satisfaction by creating effective e-commerce returns handling framework which entails: 

Setting up Well Documented and Clear E-Commerce Returns Policy: Along with following industry norms while drafting the return policy, retailers should be clear about – type of returns that are accepted, the condition of items to get its replacement, the duration for returning an item, the procedure to raise a return request, etc., Retailers should make sure that this information is readily available to customers either in a separate section as a whole or on the product description page. 

Streamlining the E-Commerce Returns Process: Retailers can benchmark their current return process from the point of customer contact to resolution and audit it regularly to identify the bottlenecks and improve the process. They can consider parameters like ease of contacting the customer care, tracking the returns, handling of returns upon arrival and getting them into inventory, etc. 

Automating the E-Commerce Returns Process: Retailers can integrate front-end (e-commerce platform) and back-end systems (ERP) to reduce manual errors and minimize the returns processing time. 

Allowing Customers to make a Return Choice: Retailers can leave the choice of return (refund, replacement, or credits) to customers to ensure their comeback in the future.

Conclusion:​​

Returns are a part of online business, however, too many returns are a sign to worry. Reducing the returns by even a slight margin would help businesses save huge operational costs. Businesses can achieve it by preventing unnecessary returns and setting up a system that manages them efficiently.