It’s a great day in business, and you’re selling goods left and right. Later in the day, though, you get a phone call from several irate customers looking to return their purchase for a refund…
Returns are nothing new in the world of ecommerce, but recent statistics from the United States show an unfortunate increase in this trend. According to eMarketer’s Insider Intelligence, a survey from the National Retail Federation reports that American consumers are set to return over $761 billion worth of goods bought in 2021. This is a massive value, and it accounts for an average of 16.6% of total retail sales in the US.
Returns, understandably, are very costly, especially as a large proportion of the losses from returns are due to fraud. Meanwhile, deciding what to do with returns is a struggle on its own. This piece will discuss how businesses can turn this around, turning a famously high-hassle business process into something that can benefit the bottom line.
Here are some tips that you should consider if you want to convert returns into opportunities.
– Set a return period of at least one year. Customers are not inclined to rush their returns with an extended return period. You can take advantage of this to provide appropriate support whenever issues arise. If you can sort things out, your customer might not even need to return the product.
– Use returns to gather feedback. Benefits taken from returns don’t have to be tangible. Whenever buyers initiate the return process, don’t forget to ask for feedback — but only after giving a refund. This practice encourages honest opinions that you can use to improve your product or service.
– Recommend gifting unwanted products. Encourage your customers to give their purchase to a loved one. This reduces the chance of returns, and you help your customers feel good about themselves.
Profiting off of returns can be tricky so, most of the time, the best thing you can do is to limit your losses. The following tips should help you craft a good return management strategy:
– Know your customers. Understanding your audience is the first step to creating a good return policy. Knowing your buyers should help you determine the risks and probability of returns.
– Guarantee fast refunds. When your customers actually get refunds as soon as their purchase is returned, they become more confident in doing business with you, resulting in future purchases.
– Offer hassle-free returns. Simplify the return process, and it helps that you don’t bother asking questions. The less you hassle your customer, the more they are confident with your business.
– Have a reasonable return period. As discussed earlier, the length of the return period affects your customer’s decision to return their purchase. This is backed by a University of Texas-Dallas study published in Science Daily, showing that longer deadlines reduce returns.
Transforming returns into something more profitable all boils down to a good return policy. It helps to be proactive when dealing with returns so you do not have to worry about it in the future. Consider returns as opportunities to improve instead of unfortunate losses.