Tactical Steps to Lower Your Return Rate

Hello Retention Kings and Queens,?

This newsie comes to you from one of my favorite cities in the entire world, Tel Aviv. I’ve spent a chunk of this week with our Product, R&D, and Marketing teams here at the Yotpo TLV office, which was an absolute vibe.

I am still getting over my jet lag, so cut me some slack if you find any spelling mistakeees on this one. Last week, I took a bit of a dive into managing your returns post-BFCM. I got some delightful feedback, but I also got quite a few questions about setting up a great returns strategy.?

Instead of going wide, let’s go deep on two questions.

1. How do I make sure my returns data is actionable??

2. How do I leverage that data to lower my return rate?

It genuinely sucks to focus a ton on bringing customers in and spend far too much on acquisition, only to lose a big chunk of that revenue on returns.?

Let’s keep it tactical.?

This week’s newsie is brought to you by Loop, the leading ecommerce returns management platform, and a tool we’ve used (and loved) at both OLIPOP and Jones Road Beauty.?

For brands looking to decrease their return costs, increase revenue, and improve their customer experience, particularly in the often-overlooked area of returns, Loop is the returns management platform you can't afford to ignore.

How Loop Returns is revolutionizing returns management:

Return Automation & Efficiency: Loop transforms the returns process into an automated, streamlined experience. Their digital return portal not only makes returns and exchanges easy for shoppers to use (and enjoy), but it also saves brands time and money.

Revenue Retention & Growth: Loop doesn’t just process returns. They transform returns into returning customers. That means shoppers get to enjoy a returns process that gets them to come back again and again, all while brands like yours retain more revenue through exchanges, store credit, and other features. In fact, JRB made more incremental revenue from our returns upselling than our monthly Loop bill. ??

Enhancing Customer Loyalty: Returns are a critical touchpoint in the customer journey, and Loop makes sure this experience is positive, driving customer loyalty through a hassle-free returns process. Their data shows that shoppers who process returns through Loop come back and buy again from the same brand 21 days faster than from brands who don’t use Loop.

Sustainable & Fraud-Preventative Approach: Returns fraud and abuse is a hot topic right now. Thankfully, Loop is well ahead of it. They empower brands to mitigate returns fraud and abuse smartly, without punishing loyal customers, to protect brands’ bottom line.

Over the last five years, Loop has made a significant impact on ecommerce.

Here are a few examples:

Aviator Nation: Reduced refund rate by 11%, boosting upsells and exchanges.

Studs: Retained additional revenue on over 20% of returns, aiding in their scaling efforts.

Saint & Sofia: Retained 50.5% of returns revenue annually using Loop.

Loop doesn’t just manage returns. Loop transforms a negative and costly touchpoint into a delightful and profitable experience for brands and their shoppers.

To learn more about Loop, check them out here.

Getting to the Heart of Returns – A Tactical Deep Dive

Return-slashers, let's get real about understanding why our products are coming back to us. Let’s go beyond the standard “I did not like it” reason and get some actionable insights.?

Here’s a step-by-step guide to uncover the real reasons behind those returns:

The Personal Touch in Gathering Feedback:

Sometimes, the best way to find out why customers return items is to ask them. Directly. Send out personal (and simple) plain-text emails to customers who’ve made recent returns, and be genuine in your approach.

Ask them for specific feedback, such as, “Could you share more about what didn’t meet your expectations with X product?”

This approach can uncover insights you might never get from a standard return form.

But let’s be honest, everyone’s busy. Offering a small incentive like a discount or a gift card in exchange for their time and thoughts can go a long way.?

This method works particularly well for more complex or high-value items like mattresses or hearing aids, where understanding the return reason could significantly impact your product strategy. More on leveraging the data to lower returns in a bit.?

The Art of Crafting Effective Return Reasons:

As you gather feedback, patterns will emerge. Use these insights to refine the reasons in your return portal. Let’s skip the guesswork and get to informed choices. Start with broader categories and then drill down to specifics.

Implementing ‘Parent’ and ‘Child’ Reasons is my favorite way to keep this customer-friendly.

For instance, if you’re in the skincare game, a ‘parent’ reason like “Didn’t like the way it looked” can have ‘child’ reasons such as “Made my skin look oily” or “Made me look tired.”

This layered approach helps you pinpoint exactly where the product fell short for the customer.

It’s also worthwhile to regularly review the feedback and return reasons. Are they aligning with your initial hunches or early conversations? This ongoing analysis helps you stay agile and responsive to customer needs.

As you start seeing trends, adapt.?

If a significant number of customers say a product made their skin look oily, you might not even need to reformulate but rather change the positioning and marketing or instructions for the product.?

If your return rate is sky-high and most of the reasons are the same, yes, then it might be time to reformulate or adjust how you market the product.

Most importantly, treat this as a continuous cycle of improvement. The more data you collect and analyze, the better you can adapt your products, descriptions, and even marketing strategies to reduce those return rates.

Using Returns Data to Lower Return Rate

Now you've got some solid returns data. But how do you use it to slash those return rates??

When selling items online, it’s completely and totally on you to market right and deliver on expectations. When things don’t go right, and customers feel let down, they show up as a return.?

The more we manage those expectations, the better chance we have to keep returns low. That might feel like an oversimplification, but keep reading before you yell at me pls.

Let’s think about all the big moments throughout a customer journey when you can make promises:

a. The Ads: If returns data points to a mismatch in expectations set by your ads, it’s time to adjust. Change the creative, targeting, or copy to reflect better what you’re selling.?

b. The Landing Page: This is where you make promises. If customers return because the product doesn’t live up to these promises, here is where you need to change them. Be honest and clear about what you’re offering.

c. The Product Page: If your returns are due to something specific about the product, like sizing or material, make sure it’s loud and clear here. No hiding the important stuff in the fine print.

d. Post-Purchase Communication: The crux of the post-purchase journey is the handholding from purchase to delivery and beyond. Use emails or SMS to reinforce important product features or usage instructions. If your data shows that returns are due to misunderstandings about the product, address them here.

e. Unboxing Experience: Continue managing expectations. Include guides, FAQs, or even a simple note in the box to reassure the customer about their purchase and an email to reach out if they are disappointed.?

Now, let me give you a practical example and show where I’d resolve it in the journey.?

Let’s say your data shows a bunch of returns because a sweater runs large. You don’t need to splash this all over your ads or landing page – it’s not a primary selling point. But on your product page? Absolutely. Make it clear as day: “Heads up, this runs large”

Mentioning it in post-purchase communications or during unboxing is too late – the purchase is already made. It’s all about setting the right expectations at the right time.

Using return data to tweak your customer journey is like fine-tuning an engine. You're not overhauling everything; you're making precise adjustments for maximum efficiency.?

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers,?

Eli ??