Return requests from customers are an inevitable part of the upcoming festive sales. A return request from a customer is disheartening and demotivating. However, with the best eCommerce return management policies, the loss availed on return can be converted into a profit or no loss statement.
Return requests mostly come from dissatisfied customers who were expecting a better product or service. As per a survey, the top five reasons for return requests are :
However, there are other kinds of requests also that are often field by customers like Exchange requests. In simple words, Exchange means that a person is returning a product for another similar product. Not everyone is aware of the difference between return and exchange requests and the impact they bear on a business. Let’s understand what are the major differences between the two:
Return and Exchange are two different aspects to understand
There are some major differences between Return and Exchange requests followed by some major impacts on the monetary conditions of the online business:
Loss and Profit statement
Returns result in a direct loss for the seller. The entire money involved in the entire process of product marketing to product shipment goes into vain with one return request from a dissatisfied customer. On the other hand, an Exchange is a no-profit and no loss statement. Exchange paves a way to send another product of the same value to the customer, sometimes for a gift or offer.
Product Evaluation
Returns are negative. What it implies is that the product did not meet the expectation of the customer. It questions the selling power of the seller, whereas an exchange request implies that the product was good but was different from the one ordered.
Positive and Negative market impact
Too many returns have a bad market image. The issue of recurring returns if not addressed timely can lead to a bad social and market image with consumers bombarding their opinion on your website and social platforms. The scene with the exchange request is not as detrimental.
Impact on marketplace selling
Constant bad reviews and comments cast a bad impression on your reputation on marketplaces. There are many marketplaces that even cancel the selling license of the sellers once identified with many return rates. Exchange rates however are neutral or even positive flag bearers for an online seller.
Changing Consumer Return Trends and Significance of Good Return Policy
A good return policy is one of the priorities online sellers have to outline. The uncertainties in the global eCommerce world are far more than in brick-and-mortar stores. As per several research studies, return requests in e-commerce are 30% more than the 8% in offline stores.
- 67% of the customers visit a free return policy before making any purchase.
- 92% of the customers have agreed to buy more products if they have easy return policies.
- 79% of customers are attracted to free return shipping.
- 62% of shoppers are ready to buy if they can return a product to an offline retail
- 58% of customers would like ‘no question-no terms’ return policies.
Therefore, a good return policy to cope up with uncertain return and exchange requests is very crucial to prevent returns from eating up into your sales profits. It has several long-time customer-centric benefits that make your store a favorite spot for the customers to shop from. Here they are:
Instilling a sense of security in customers
Customers feel secure about their investment in your product. Money is the modern power and customers think several times before investing their money on any online purchase. One strong reason you can give them to invest in your product is that their money will be returned if they are not satisfied with the product.
Indicator of good product quality
A good return policy indicates a good quality of the product sold by a seller. It shows that the seller is confident about the quality he is pitching on the marketplace and is guaranteeing a full refund if the product is defective or falls under any return and refund eligible criteria.
Identifying the drop-offs of your Logistics services
A good return policy enables you to identify all major problems your customers are facing with your product. Are products damaged or seals broken, or the packing has a leak, etc. A good eCommerce return management policy will give you an insight into the key problem area like logistics or product services.
Shield against sales profits reduction: A mismanaged return and refund policy minimizes the profits. The entire cost involved in product shipping and back to the warehouse stands out to be an expensive bargain for a seller. Wisely structured return management policies can reduce this cost. In addition, it helps in offering other options like store credits, exchange offers, discounts, etc, to instead generate more profit even on return requests.
Increases customer retention
A customer is retained when you understand their concern and solve their problem as early as possible. A customer-centric return policy gives customers a retaining factor with you. They will know that it is easy and convenient to shop with your brand because of the hassle-free returns and exchange policy. Also, the exchange and store credit options can excite them to shop in the future with you.
Best eCommerce Return Management Tips that guarantee Lifetime Customer Value to your e-store
One of the best rewards of a first-class return policy is an increase in Customer Lifetime Value. What a businessman looks for is a good customer base and repeated customers. Repeated customers are an indication of a successful business model and ensured future.
During the festive season, the return, refund, and exchange rates increase multi-folded. According to statistics:
- The total value of online returns was $41.6 billion during the holiday season of 2019.
- Not only that, 2nd Jan 2020 recorded to handle 1.6 million returned items.
Hence, to say that 2021 will be an easy go, would be the biggest myth. But how to address the issue? Are there any sure-shot ways to prevent bulk returns? Yes, there are many ways to manage these returns. Let’s read the best tips here:
Give a clear picture of your Return policies
Allow your customers to properly read through all the terms and conditions that they must adhere to before making a purchase. Put a clear picture of your return, exchange, and replacement policies. Some major highlights can be :
- Condition of the product,
- The time limit for return and refund,
- How to fill up a return, refund, or exchange form and related incentives.
Extend multiple return and refund options
Consider creating a good return policy as a post-sale service. Pre and post-sale services both are very important for customer delight and retention. Multiple return options can be mutually beneficial. Here is how you can do it:
- You can provide an option of store credits wherein instead of choosing for cash, a customer can get credit on their shopping account that can be used for future purchases.
- Next idea is to keep a flexible option of exchange or refund. By delivering a better product at the same price or some discount, you can get a product sold in an Exchange option.
- Replacement can be another good option that can save you from bad customer reviews and a retained customer.
Integrate with good shipping and inventory solution
Tackling the bulk of the inventory catalog and keeping an eye on every change that is happening is a super tiring and time-consuming process. Instead, you can integrate integrate your e-store with the best eCommerce solution provider that can help your store get automated inventory and shipping updates. It can help you in several ways-
- Updating and synchronizing between the marketplace and your e-store
- Automatic order and stock management
- Notifying you every time there is an order or replacement or refund requests.
There are many such features that a good eCommerce solution provider can deliver to you. Automating your shipping and inventory process can provide a profitable return management policy.
Examine your logistics providers
Whether you are the logistic provider or you have hired a logistic partner at your service, a periodic audit of their performance is necessary. Examine the functioning of your logistic partner or your in-house team to analyze how the packaging and delivery are done. In the process, the loopholes or bottlenecks are tackled in time before customers are too unhappy to come back to you again.
Simplify Return Process
A simplified return process brings 85% of the customers back to you. Isn’t this amazing? As many as 85% of customers will place an order with you if your return process is simplified and easy to understand.
Note- An easy return process is one of the best tips to deliver an enhanced customer experience.
Give accurate product description and image
Out of several reasons for return requests, the first and foremost is the product is not similar to the one ordered. Either there is a change in the color, size, fabric, texture, or quality. Good description and high picture quality of the product can prevent you from recurring return and refund requests.
You can invest in using virtual and augmented reality tools and software that give a real-life shopping feel to your e-store visitors. Artificial intelligence has really revolutionized the shopping and selling experience of people worldwide.
Take feedback from your customers
A human touch to any process makes it more valuable. Customer feedback can be one ground where you can actually ask your customers to reach out to you or your team and share their valuable shopping experience with you. Considering customer’s feedback seriously and working on their requirements can improve your selling more professional and valuable.
Beware of Fraud Return and refund requests
In the world of e-commerce, where everything is virtual, you don’t really know who you are catering to and vice-versa. There have been numerous cases where customers have returned products for fraud reasons. Being sellers, you must have a full-proof set of guidelines for returns.
- If possible, you must personally check the number of items and their conditions.
- The product tags and other credentials must be intact with the items.
- You must stick to the return guidelines so that a customer cannot make a fool of you.
- A recent trend of bracketing has eaten up a lot of money for online sellers. You can decide with the limited number of products that are eligible for returns.
There are several proven ways to manage returns and refunds for efficient selling. Looking out for an automated system that helps you easily manage your order and inventory and maintain real-time data can be of great advantage.
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Keeping in mind the current marketing trends, solutions pertaining to marketing automation, Payment/POS, and digital marketing have seen a significant demand this festive season. It has been an unprecedented experience for both the sellers and experts at CedCommerce to be a part of the selling plan of many sellers this pre-festive season.
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