Returns, what’s in it for me?

The hidden value of returns

What you might not know is that returns can become a valuable part of your marketing strategy – a smart tool even! Your returns policy can boost both your conversion rate and customer satisfaction. Your goal is for your returns policy to increase your sales rather than the returns themselves.

The effect of a flexible returns policy
Several scientific marketing studies have proven that a customer-friendly and flexible returns policy has a positive effect on your sales and on the actual returns rate. Research by UPS shows that 67% of online shoppers assess the returns policy before deciding whether or not to place an order. Moreover, 92% state they would place another order if returns are easily and efficiently handled. In a nutshell, not giving your returns policy the attention it deserves is counterproductive.

The reasons behind returns

Once you know what drives your customers, you can efficiently respond to their needs. Are you aware of the most common reason why customers return their purchases? Unsatisfactory product quality! Products are often returned for this reason when the product description doesn’t match the actual product, so try to give a complete picture of each item, so that your customers know what to expect. Customers often also return goods because:

• they were damaged;
• they received the wrong item;
• they accidentally ordered the wrong size;
• they’ve decided they don’t need the product(s) after all.

Tell your customers everything about your product, both before and after the purchase. Write a detailed product description or create instructional videos. Also allow your customers to zoom in on the product photos to get a better idea of what to expect. Do you sell technical products? Then make sure your installation instructions are clear and to the point.

How common are returns?

Some products have a higher risk of being returned than others. Fashion is the sector with the highest returns rate: approximately 1 in every 4 or 5 orders is returned. So-called ‘fitting roomers’ order several sizes and colors, only to return the ones that don’t fit or they don’t like. In this case, it may be useful to include a detailed description of the fit and/or to add outfit photos.

It’s also important to note that the returns rate differs from one consumer to the next. Most shoppers return only 10% of their purchases, or less even. Is your customers’ returns rate higher? Then try to find out why and come up with a custom approach to counter this issue.

The effects of your returns policy

How can you reduce the number of returns and boost your sales through an effective returns policy? The key to success is having a closer look at several factors that influence shoppers’ behavior. We’ve listed them below.

Time
From a legal point of view, you must give your customers 14 days to return their purchases. Needless to say, you can choose to extend this period. And that’s exactly what many online stores are doing today, giving you 30 or even 90 days to return the goods.
When something seems far away time-wise, we consider it less important and we don’t tend to focus on it too much. As a result, an extended returns period can decrease the risk of returns. Extending the returns period can also help consumers get attached to their purchase because instinctively, they bond with it.

Cumbersome returns procedures
If shoppers are expected to go through a lot of hassle to return a product, they might decide not to buy it after all. Humans are, by nature, quite lazy, although many of us find it hard to admit that. Subconsciously, this influences our decisions. Consequently, a straightforward returns policy actually pays off, encouraging visitors to place an order. 47% of online shoppers even want an easy-to-print returns form.  

Free returns?
It may not be obligatory, but refunding returns can actually boost sales and customer satisfaction. The UPS study mentioned above shows that consumers consider free returns the most important part of the returns policy. Purchases also increase considerably (up to 158 to 457% and more even!) if returns were refunded in the past. Why? One of the main reasons is that refunded returns boost trust in your online store, encouraging consumers to place an order with you rather than with your competitors.

A counterargument could be that a free-returns policy pushes consumers to buy impulsively, which actually increases the risk of returns. My tip? Schedule a test period to measure the effect of free returns on your online store and take it from there...

Practical tips for an efficient returns policy

In brief, we could say that a flexible returns policy can decrease the risk of returns for your online store, as well as boost sales and even customer loyalty.

Last but not least, a few practical tips to set up and get the most out of an efficient returns policy:

• Clearly highlight your returns policy in your online store, both in the footer and in the order confirmation or invoice. On the product page, don’t forget to explain how customers can return their purchases. This can indirectly convince them to place an order.
• Create a straightforward returns procedure which allows consumers to register the item to be returned and immediately print a returns label.
• Test your returns policy and its flexibility by extending the timeframe for returns or by refunding the expenses incurred.
• Only offer free returns for specific products. This allows you to exclude products on sale, for example, and prevents shoppers from buying excessively and taking advantage of your flexible returns policy.
• Go for well-thought-out packaging. Once a product has been returned, you want to make sure you can re-sell it as quickly as possible. My golden tip? Keep it simple and avoid using packaging that can damage the product.