Dealing with returns takes up significant resources for any e-commerce business, making it harder for them to grow. While returns are inherent to online retail, handling excessive returns can easily chew away 15-20% of your revenue.
Fortunately, there are several returns best practices for your e-commerce business. Are you ready to meet the new rules of returns head-on and learn how to reduce returns in e-commerce? Here are the ten strategies industry experts use to lower the number of returns:
- Avoid parcels getting returned to the sender
- Analyze data to prevent recurring returns
- Optimize product descriptions and visuals
- Eliminate errors in the returns process
- Educate customers on product use and maintenance
- Enhance customer communication with tracking updates
- Implement a well-defined return policy
- Introduce returns fees for specific behaviors
- Encourage exchanges and store credit
- Use customer feedback for continuous improvement
Ready to learn more? Let’s explore each of these return-reducing actions in detail.
1. Avoid parcels getting returned to the sender
It starts with the delivery — before consumers even lay their hands on their order. Wrong items sent to the wrong address result in failed deliveries, and on too many occasions, packages get returned to the sender. For 2023, Shipping Intelligence Software Tracey by Sendcloud found that 5.17% of failed deliveries link to packages returned to the sender.
Providing options like selecting delivery times or pickup points gives customers more control over their delivery, leading to fewer missed deliveries. This, in turn, reduces return costs and delivery-related return rates for the retailer.
Inaccurate labeling also often leads to returns, especially when you’re creating labels manually. Use automated labeling to minimize these errors like XXL Nutrition did by implementing Sendcloud’s shipping solution:
“With Sendcloud, label issues have been cut down in half. We’ve noticed a significant decrease in parcel delivery issues and fewer ‘Where Is My Order?’ customer calls.” – XXL Nutrition
2. Analyze data to prevent recurring returns
Analyzing data is key to identifying return patterns and implementing targeted prevention strategies. After all, this contributes to the aforementioned 15-20% loss of your revenue caused by returned e-commerce packages. Here are two examples of issues that data insights can help you identify and resolve:
- Long shipping times: Suppose your returns are due to extended shipping times or delivery delays. In that case, you can optimize your delivery processes by connecting with other carriers to offer faster delivery options — one less reason to return products.
- Damaged goods upon arrival: If customers frequently return items due to shipping damage, you know to invest in better packaging, insure your products, and collaborate with the right logistics partners to ensure safer delivery practices. Especially if you sell items that require special handling.
3. Optimize product descriptions and visuals
A study done among UK and US consumers found that they mainly return online purchases because of size, fit, or color.
If you receive multiple returns of this nature, revise your product descriptions and specifications like this:
- Make sure they’re detailed, accurate, and accompanied by high-quality images and videos. Try using various angles and ensure it’s a true representation of the color and other important features.
- Include detailed sizing guides or use smart sizing technology for fashion items to avoid customers having to return and reorder products.
4. Eliminate errors in the returns process
A simplified returns process can significantly reduce customer frustration and streamline your operations. But make sure the return portal you’re using adheres to your return policy rules, avoiding return shipments for items that should have been rejected.
To avoid repetitive tasks, make sure you can automatically accept or reject returns based on smart return rules set in your dedicated e-commerce returns management platform. Where applicable, you can even ask customers to upload proof of damage or the incorrect item sent to avoid fraud.
5. Educate customers on product use and maintenance
Detailed product use and care guides minimize customer return rates. Your customer receives the information they need, and the knock-on effect is clear. The product’s longevity is improved with proper use. Customers understand the features and benefits better. They love your products even more.
Using automatic post-purchase emails can facilitate this by distributing educational content along with other targeted communication. You can easily set it and forget it, but make a big impact to reduce returns due to misuse and misunderstandings.
6. Enhance customer communication with tracking updates
Clear and efficient communication about the parcel delivery status and estimated arrival time is key to making sure the parcel will not be returned because of a too-late delivery. Especially during the holiday season. However, this holds true for any time-sensitive products or gifts.
It’s not always possible to prevent returns caused by gifts arriving late for celebrations. But you can at least make sure customers know about the delay and when to expect the delivery via branded tracking emails. Plus, they then don’t have to contact your customer service about it, saving your team time. Moreover, well-informed customers are more likely to place more orders in the future.
7. Implement a well-defined return policy
When asked, 67% of our surveyed shoppers said they wouldn’t even consider ordering in the first place when no return info is available on the shop’s website. Make sure your return policy gets linked in other relevant places too, like product pages and tracking emails.
Knowing how to write a return policy that works for your business is a game-changer. Consider the return period, costs, and scope. Where it makes sense, try to be as flexible as possible — while extending the return period may seem counterintuitive, having a longer return period means less pressure to return the product, for example.
8. Introduce return fees for specific behaviors
Keep track of your customers’ behavior on a CRM or otherwise — you might find out that a handful of serial returners are distorting the perception of your entire customer base. Consider making these customers aware of their return behavior by introducing a small return fee. Even a small fee of €0,50 has been proven effective to reduce returns by 10%.
You can even set up smart return rules based on certain return details so you only charge fees when you think them appropriate. For example:
- If the return reason is ‘ordered multiple sizes’
- If it is a country-specific international return
- For specific items, like holiday gifts
- For heavy parcels of a specified weight
See how easy it is to set up return rules in our returns portal.
9. Encourage exchanges and store credit in return
By making exchanges free of charge or by turning a return into store credit rather than a refund, you prevent yourself from losing revenue. This mitigates financial losses and keeps customers engaged with your brand. Plus, you turn frustrations into opportunities by presenting them with more options in a sophisticated returns portal.
Did you know?
A staggering 77% of one-star reviews on Trustpilot stem directly from negative post-purchase experiences.
10. Use customer feedback for continuous improvement
Reduce customer returns by asking them for reviews to gain insights into their preferences and needs. This strategy works by addressing recurring problems and improving the shopping experience.
Fixing underlying issues of customer dissatisfaction allows you to reduce returns by meeting customer expectations more effectively. When shoppers are able to interact with reviews and ask questions, they have a better understanding of what to expect from the product they are interested in buying. This leads to fewer surprises when the product is delivered to them.
Ready to reduce your e-commerce return rate?
E-commerce return solutions have a persistent theme — they rely on a customer-centric approach combined with operational efficiency. The best way to apply this and reduce returns as much as possible is by making data-driven decisions and continuously improving your business.
Sounds complicated? It doesn’t have to be. Sendcloud allows you to gain insights and manage everything within one e-commerce returns software. Book a call with us to find out how to integrate it with your systems to reduce product returns and get your e-commerce return rate down.
