Product returns are an unavoidable part of running an e-commerce business. They can’t be eliminated, so offering the option to return items can be a vital part of a business’s strategy.
As the adage goes: “If you have too few returns, you’re not selling enough.” Still, most e-commerce businesses would like to reduce the numbers of returns they need to process.
The E-Commerce Times spoke with several experts in online commerce to get their take on what causes returns, how to handle rejected orders, and ultimately keep them from happening in the first place.
“Many companies focus all efforts on the sales side but do not spend the same energy reviewing all the returns and how to make the experience better, which can have a better return on investment than simply increasing sales and marketing,” Nate Burke, CEO of Diginius, explained to the E-Commerce Times.
Since returns are a part of life in the e-commerce realm, dealing with them effectively is a critical component of any e-tail business plan.
“Returns cannot and should not be eliminated, but they certainly can be better managed,” advised Matthew Merrilees, CEO North America of Global-e. “They actually present an opportunity to build trust between the retailer and the customer.”
The Case for Reducing Returns
Returns cost money and time and risk damaging products or rendering them useless, so reducing them makes sense for most businesses.
“Just the nature of having to pack and ship products back and forth means that, the more returns there are, the more chances there are for product to get damaged,” Lucy Kelly, artist and owner of bel monili, told the E-Commerce Times.
“As an e-commerce business owner, you want to be creating the best possible experience for your customer, which means they should be delighted with their purchase the moment they open it,” she continued. “By creating that expectation and experience, your customers will be much less likely to ask for a refund, and much more likely to share their positive experiences with others.”
Taking steps to reduce the number of returns is good business for a variety of reasons.
“There are many benefits of reducing your business’s product returns,” offered Karina Shivdasani, founder and CEO of Common Assembly. “Returning can be a big issue in the world of e-commerce. It cuts your profit margins, has a negative environmental impact, and threatens your overall business.”
In addition, she noted, “it can cause you to have to hire more workers, increase your warehouse space or deal with wonky logistics. Bottom line: it damages your brand and profitability as a company.”
For that reason, having a clear return policy — and ensuring that policy is in a business’s best interest and ultimately minimizes returns — is a vital part of running an e-commerce enterprise.
“While offering a quality return policy and customer service processes is key for small businesses looking to build up loyalty in their consumer base, returns should be minimized as much as possible,” Jacqueline Snyder, co-founder with Minna Khounlo-Sithep, of The Product Boss, told the E-Commerce Times.
“The extremely high rate of returns is a serious plague on retailers at this point so there are financial costs and opportunity costs that should definitely be considered when establishing a policy,” she asserted.
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