The Growing Trend of Unwanted Returns

By Bianca Barath

In a time when delivery issues run rampant and there’s always a slight anxiety over your customers’ packages getting lost or damaged, an order getting delivered successfully is no longer a moment of huzzah but more like a sigh of relief. To make matters worse, your small happiness can still be short-lived as your customer wants to return their purchase.?

E-commerce return rates are typically 2–3 times higher than brick-and-mortar stores, with an average of 20–30%. Return rates can vary by category, with clothing and apparel having the highest rate at 26%.?

But why this disparity? Why do e-commerce shoppers frequently return their purchases? Is it the product or delivery or the customer who’s at fault? The answer to all these questions will also give you an idea of what causes them, their effect on your business, and most importantly what you can do to cut them down.?

Let’s start by understanding ‘unwanted returns’.

Unwanted Returns and What Causes Them

There’s a common misconception that returns are bad for your business. They are a ‘necessary evil’ that causes issues only when not handled correctly or ignored altogether while being a powerful retention tool when done right.?

A great way to handle returns well is to ensure they are within your capacity. That’s what makes it necessary to reduce unwanted returns and the best way to do this is to understand why your e-commerce store has a higher-than-average return rate.?

While these might look trivial, frequent returns DO have the power to have severe consequences on your business.

Impact of unwanted returns on your business

• Financial costs: The main reason to cut down your store’s return rate is the amount of financial burden they bring in. From the customer’s end, the return process is straightforward. However, there are a lot of things that go into the back end such as processing, restocking, potential product loss (discarding), etc, all involve significant labor costs. Not to forget the refunds.?
• Operational challenges: Apart from the financial costs, return processes also involve heavy resources such as customer support to take customers through the process, labor at sorting facilities, and transportation.?
• Customer service strain and potential reputation damage: When returns keep pouring in, these activities consume a big chunk of your customer support and operations teams’ time and prevent them from tending to other important tasks at hand such as customer requirements. This has a severe consequence on your CX efforts and damages your brand’s reputation.?

Don’t worry, there are actions you can take to cut down these unwanted returns to ensure you lower costs and operational burdens and create a positive customer experience.?

Strategies to Reduce Unwanted Returns

The strategies to cut down unwanted returns vary from optimizing your return policies to ensuring good product quality, satisfying descriptions, and so much more. We’ll take a look at them in detail for better understanding.

Tailor-make your returns policy based on your business needs

A lenient returns policy is understandable, customers expect it so much that they would opt for a brand that has a long returns window with less stringent conditions.?

On the other hand, a very customer-friendly returns policy can result in return frauds such as wardrobing or bracketing.?

The right way to handle this and increase conversions as well as cut down unwanted returns is to keep your returns policy balanced. For instance, start with a reasonable return window but include specific conditions to deter fraudulent customers from abusing it.?

Replicate the shopping experience of a brick-and-mortar store

Remember the good ol’ days when you walked into a physical store, picked what you wanted, got a 360-degree view of it (see, touch, smell), etc? The lack of this experience while shopping online is one of the reasons behind unwanted returns.?

This is not what I expected, the color looks different, and the size doesn’t fit me, these are some of the reasons customers give while returning their orders (which happens more frequently in the apparel business).?

Here are some ways on how you can deal with this:?

• Provide detailed product descriptions and high-quality images to show the customer what they’re getting into. Include information such as size (for decor), color and design descriptions for apparel, etc,?
• Offer better size guides and fit recommendations (70% of the returns are size and fit-related)
• Take it a step further and make use of technology (AR and VR) to implement virtual try-on technologies for fashion and cosmetics. Let the customers experience how they would look in a particular outfit or how the sofa would suit their home.?

Such actions can help customers make informed decisions, thereby reducing the likelihood of returns due to misunderstandings.?

Encourage exchanges and store credit over refunds

Impulsive shopping decisions or buyer’s remorse happen for various reasons and are something that merchants can’t control. But with the right actions, you can influence their decision to prevent remorse.?

While we’ll look at the actions below, let’s assume they return a product after realizing the consequence of their action — what’s it that you can do then?

Simple, provide an option to convert returns into exchanges or store credits instead of refunding every one of them. This way, you have an opportunity to retain the sale (or even make the customer spend more). To influence things even further, you can provide incentives to encourage the customer to opt for exchanges or store credits over refunds.?

P.S. You can also reduce returns due to impulse decisions by adding customer reviews to your product pages that improve customer trust and help in convincing them about their decision.

Use data analytics to identify and address return patterns

Knowing what’s going on with your returns is half the job done already to cut down unwanted returns. All you have to do is take the appropriate actions. And what better way to understand your returns than to track them??

Keeping track of your e-commerce store’s returns gives you insights into various metrics such as return rate, reason for return, frequently returned products, identifying serial returners, etc. Such insights can help you zero in on why your customers are returning their purchases and what they’re returning.?

BONUS: Make product and service improvements

More than 40% of returns are due to a damaged product or the wrong item being shipped. That’s close to half of all e-commerce returns with the capability to not only increase unwanted returns but negatively impact customer satisfaction and lead to lost sales.?

Here’s where you can implement quality control measures around product and packaging and improve delivery accuracy to prevent such incidents from happening. However, keep in mind that staying reactive to such incidents doesn’t help. Analyzing data to identify shortcomings and address these issues proactively can help you make significant product and service improvements that not only reduce returns but also enhance the overall CX.?

That’s it from us now. It’s time for you to implement these actions in your business’ returns process and witness a significant reduction in return rates.

Reducing Unwanted Returns

The growing trend of unwanted returns is a significant challenge facing e-commerce businesses.?

With its implications on profitability and customer satisfaction, you must address this issue head-on.?

A balanced approach that prioritizes customer-friendly policies while also optimizing your reverse logistics process is essential.?

By implementing strategies such as improved product information, enhanced quality control, and innovative return management solutions, you can effectively reduce unwanted returns while maintaining a positive customer experience to ensure long-term success in the face of the returns challenge.

LateShipment.com is a one-stop solution for all things post-purchase, whose Returns Experience Management platform is built to boost returns-related metrics that matter most to your business.

With the help of the Returns Analytics Dashboard, keep track and break down returns into simple, actionable metrics to help your teams make better business decisions and ultimately spell the success of your e-commerce business’ returns strategy.?

To learn more about the dashboard and Returns Experience Management – Click here to schedule a call with a product expert.

About the Author:

I work with leading e-commerce merchants to optimize their post-purchase experience, minimizing delivery issues and maximizing customer satisfaction (and profits) through innovative technology solutions. Reach out if you want to discuss how to improve your post-purchase process!