Give your customers the freedom to return products that do not serve their purpose, especially if the fault is on your side. But be a little more forgiving even if the fault is on the customer’s side, after all, you want to win the customer over for life.
Retail company L L Bean had a return policy that can be called ‘ridiculous’.
Because who guarantees lifetime returns on products? From the period 2013-18, their lifetime return policy cost them as much as US$50 million per year. This was almost 30 per cent of the company’s annual profits.
They changed their return policy which states that customers can return products up to one year from the date of purchase.
Believe it or not, they lost a lot of goodwill from customers after this decision. Customers felt that the brand was no longer special even though anyone in their right minds would accept that running into losses isn’t the best option for a business and they did what they had to do.
Return orders are a big dilemma for eCommerce businesses. In the eCommerce industry, you cannot avoid it. Statista estimates that return deliveries would cost US$550 billion by 2020, in the US alone.
This is not even taking restocking expenses or inventory losses into account.
Here is another statistic that will guide you in the right direction if you plan to take measures to tackle the issue of product returns. More than 92 per cent of customers who were surveyed said that they would buy again from the website if its return policies are hassle-free.
Why is managing returns significant?
Return orders are an essential part of the eCommerce world. A fulfilment cycle doesn’t just end with delivering the goods to the buyer.
Providing the customer with a choice of returning the product or exchanging it is a part of the process. Not offering returns can be detrimental to your business. It can turn away customers who haven’t experienced your services yet.
Giving a choice for your customers to return products and making that process a smooth one will keep you in their good books. There are high chances that they order from you again and even recommend your products to their peers if you earn their trust with a return policy that doesn’t waste their time.
Before we embark into understanding how to handle product returns, let’s see how we can reduce the rate of product returns to a bare minimum.
3 steps to reduce the rate of product returns
Detailed product descriptions
A vague description of the product is the highest contributor that results in product returns. Include as much information as possible about the product so that the customer doesn’t feel cheated once they have the item in their hands.
Take professional photos of the product, add product specifications like size, weight, and colour. Even allowing for customer testimonials on the product page adds credibility to your business.
Ship the item properly
Making sure that the address is correct can be a tough ask in itself. We would suggest that you use Artificial Intelligence to make sure that processes such as these are done with zero errors.
Pack the items properly so that they don’t get damaged in transit. Getting faulty products will result in them not revisiting your website in the future.
Update your stocks regularly
No customer wants to pay for a product that is not available. Ensure that you allow your customers to view your inventory in real-time.
It solves the confusion for the customer and doesn’t end up troubling you with returns because they only received five of the seven products they ordered.
Here are 7 ways in which you should handle product returns for your business
1. Easy return policy:
We cannot stress enough about the importance of having a return policy that benefits the customer most. If you deal with returns in a way that gains their trust, it will make the customer think highly of your business.
Before you arbitrarily choose a return policy, make sure that you engage with all the stakeholders involved to get an idea of how different options will affect your bottom line. Bleeding cash because of a lenient return policy isn’t going to help your business.
2. Use AI to automate returns:
There are delivery tracking software these days which makes it possible to automate the return process without the help of employees who have to sift through large amounts of data. The entire process can happen over a few steps.
Using these software saves a considerable amount of time and money for your business, not to mention the goodwill that you earn from the customer for keeping it easy and fast for them.
3. Keep the customers updated
Customers would love to know the status of not only items that they have ordered, but also of their returns. They only care if their refund is processed or not. It is pivotal that you don’t rob them of this information.
Keep them in the loop as to when the customer service agent will come to collect the product so that they don’t have to waste their time.
Do not make them reach out to you every time they want an update. No one likes doing this. There are competitors out there who would love to poach your customers.
4. Make customer support your strong suit
Even if you have copywriters who made it easy for your customers to understand the return policy, there will be customers who need a bit more hand-holding.
These type of customers require the help of a customer service executive who can clearly explain the procedure to them. They will either contact you over emails or want to get on calls to solve their issue.
Make sure that you even offer live chats so that they are serviced in the best way possible.
5. Go above and beyond
While the above phrase is more of a cliche now, it still rings true in the customer service scheme of things. ‘Wow’ your customers with impeccable service, especially when it comes to returns.
Because a customer is terminating a brief relationship with your business when they opt to return a product, you can use this to create a service experience that blows them away.
If your return policy is to refund in 24-48 hours, how would they feel if they see that the amount was credited in the 5th hour itself? That’s customer service at its best!
6. Ask for feedback from customers:
The business must know the reason behind the customer asking for a refund. It will help you unearth trends which will help you understand patterns.
If a particular product is notorious for being heavily returned, you should find out the reason behind it. It might solve a big problem. All of this and more can be learned when you regularly take feedback from your customers.
7. Use returns to get insights about your business:
While product returns from customers will keep you grounded, there is so much that you can learn from it. Be it about your products, customers, marketing communication, and the way your competitors operate.
It is a landmine of insights if you probe deeply.
Did your customers return the products because your competitors priced it cheaper? Did they get a better quality product elsewhere? Did your messaging confuse the customers? Are you attracting the right type of customers? Did you not narrow down your customer persona or was your targeting haywire? All of these questions have answers thanks to the returns from your customers if you happen to look closely.
While we have helped you with seven ways on how to handle product returns, the truth is that some customers will take advantage of your return policy.
You should write that off as losses, and it is not wise to paint all customers with the same brush. There will be customers whose sole intention is to return products after using it for a certain amount of time.
But these are few and far between because most customers value the free return offer and only use it if the situation warrants.
Here is a report which says that more than 90 per cent of customers highly values free returns. Look at the life-time customer value instead of quibbling over an item that costs as little as US$5.
Always think of the long haul when it comes to customers.
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Image Credit: Brett Jordan