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Lesson 3: How to decrease the number of e-commerce returns

Best practices to decrease the number of eCommerce returns

Returns and complaints are an inherent part of eCommerce. Buying a product over the Internet is done at a distance and involves a higher risk than traditional shopping. Hence the need for buyer protection is considered a must. Without a doubt, if you run an online sales store, you want to generate as much profit as possible. To generate profit, you not only need to acquire as many customers as possible and keep them loyal but also handle one of the primary sources of operational costs in your business – the returns. Running a prolific, good prospering business is not only about preparing an attractive offer, an aesthetic website and a marketing plan. Every week there are more and more new online stores, not every one of which stays on the market successfully. A well-prepared online store will significantly reduce the risk of product returns because it is aware of a growing return rate in online businesses. What does the successful entrepreneur have to do to handle returns in a way that will help avoid unnecessary costs and, in some cases, be profitable to a shop? This article will try to provide six valuable strategies which can be used to swiftly handle the problem of returns.

Table of contents Contents:





Chapter 1: Be aware of the actual trends in eCommerce and in your branch of business

The shopping patterns of the new generations are also important. Representatives of generations Y and Z expect to return part or all of the order more often than other generations when shopping online - 46% of e-buyers aged 18-25 make such declarations (according to State of eCommerce delivery research, 2016). It is young customers who return the most online purchases. Consumers in the 14 to 29 age group send back 18% of their orders. Therefore, more and more online retailers, including the aforementioned Zalando, are asking themselves whether free returns are a business attribute or a growing cost that threatens profits. It's also worth remembering that the propensity to return varies by industry. We most often return clothes and shoes (even 60% of products bought online) and consumer electronics. Next are children's goods, home furnishings and cosmetics. Companies from these industries face the biggest challenges. All the more so as they increasingly have to deal with dishonest customers who return used products. The clothing industry is leading the way, with more and more cases of people buying clothes to take a picture for social media or just to go to a party, meeting, etc. These are only a few examples of returns one can encounter. There are many more. That is why Staying up to date is so important for anyone running an eCommerce store. Know the trends, especially those related to returns.

  • Keep up with the newest eCommerce trends

  • Try to be aware of who and why returns the goods to your shop

Chapter 2: Make sure that every product is clearly presented and described

It is obvious that customers want to see the product before they buy it. In many cases, it is enough to publish pictures showing the product from all sides, without any background or clever arrangement. Usually, a set of such photos is provided by the manufacturer. In such a situation, however, you have to reckon with the fact that each of your competitors will publish the same photos as you. You need to stand out from the crowd and be prepared to show something more attractive that will catch the customer's eye. Not only will he see the product clearly and not need to return it, but he will also be more eager to buy it. Moreover, there are industries, such as, among others, fashion, beauty, or design, where a simple, attractive picture is not enough. In their case, it is worth deciding on dedicated product sessions. You can do it yourself or in cooperation with a professional photo studio. It is important that the photos are of excellent quality and stylistically match the target group. Again, figure out what suits your business best and start to implement it. Product descriptions play the role of an abstract salesperson – thanks to them, a potential buyer makes contact, and they have to convince him to buy.

For this reason, it is worth considering how to formulate the message and what stylistic tricks will allow you to get closer to the customer. However, the most important thing is to define who this customer is. Product descriptions that speak the recipient's language are the essence of online sales, but on the condition that they are tailored to the profile of the target group. We address future mothers in a different way, young people dancing pogo at a Behemoth concert in a different way, while Slovak doughnut lovers will have their own language. At first glance, you can think that this is not related to the returns - but it clearly is. The more informative and audience-focused the description is, the fewer returns will occur.

  • Take good quality pictures that will present your product clearly

  • Make the description as informative and as attractive to the target audience as you can.

Chapter 3: Make your orders right at a first glance

To make a purchase from an online store, you must fill out an order form. This is usually a multi-step process. Before our order is processed, we have to go through successive tabs, first adding the product to the cart, then entering our data, choosing the shipping method and payment method, and finally confirming the purchase and the correctness of the data. Seems obvious, doesn’t it? Not in every case. Shop interfaces can be unintuitive and complicated. Sometimes, the selection of a wrong product or a size of a product is reported, and it

results in a return of a product. When we put it next to the correctly placed order, it becomes clear that the problem of clumsy site interface generates way too many unnecessary costs. When the interface is misleading, it is easy to make a mistake. Adding a summing up page or enforcing the order confirmation along with the obligation to pay is the way of preventing wrongly placed orders.

  • Make the ordering process simple and transparent

  • Add features like an order confirmation page or summing up page

Chapter 4: Take care of quality packaging

The importance of product packaging in mail orders is not only to protect the item from damage during shipping and transportation. It is, above all, effective marketing and building dialogue with the consumer. Even a basic placing of the logo on the box increases the uniqueness of your products. Packaging used properly will bond with customers' emotions and make it easier to attract new ones. Packaging changes its protective function, becoming a business card of the company. The way of securing the product will be a great indicator of the way the company treats the customers. The company's packaging standard often will tell the customer more than the brand itself.

It is a logistic challenge to handle the return. You will need to cover the costs of the returned product, the cost of selling or utilising the damaged product and the cost of both shipments. This is a lot of money, which can be easily avoided if the packaging is properly handled. Moreover, the alternative costs will be a lot more problematic. Labour, caring of complaints, shipping the product again – everything consumes a lot of time which needs to be paid for. To all of those costs, we need to add possible refunds to the clients. Refunds or compensation for damaged products, along with space to inspect, repack and store customer returned goods, is burdensome for the company and its finances.

Packaging is the first point of contact with a customer, so good packaging not only shows that you care but that you value the overall customer experience.

  • Provide good-quality packaging

  • Avoid the returns by providing secure packaging solutions

Chapter 5: Provide the easy returns and clear return policy

Store policy is one of the necessities when running an eCommerce store and preventing losses due to returns. When we visit an online store, a privacy policy is a thorn in our side, an unnecessary element that we have to accept as soon as possible, just like cookies, in order to move on to buy a product as soon as possible. What is a privacy policy, what should such a document contain, and whether you are obliged to place it on the website as the owner of an online store?

A store policy is generally not obligatory, but it is a necessary element so that as the owner of a prosperous store, you can sleep peacefully. It allows you to inform users in an easy way about issues related to the collection and processing of their personal data. We shall explain how our store operates and what data is collected from customers. If they have any doubts, they will intuitively look for the "store privacy policy" tab on the website. You can create the document yourself, but you need to remember a few basic things. The most important thing is that it should be written in a simple and accessible language so that each of your customers understands it and follows its principles. When creating a privacy policy for an online store, you have to include basic clauses on compliance with basic legal acts such as personal data protection and other important laws in your country. Generally, in addition to the privacy policy, you should also include a security policy so that customers know that they are buying from a safe store and that they are not giving their money to unknown fraudsters. I know you may not think this is important from the point of view of returns. I will talk about the return policy in the next chapter - but remember, by taking care of all kinds of policies, you let your customers know that you take them seriously, which increases their trust and decreases their willingness to return.

  • Make sure your privacy policy is friendly both to the customer and to you

  • Show your credibility, your brand, and your transparency so that the last thing your customers will think about is a return.

Chapter 6: Do not forget about having a great return policy

You have to handle returns effectively. There are two solutions that can help you decide what to do with them. You can either minimize the number of returns or make the returns the benefit of your company. If you have decided to avoid the returns, write the policy in a way that will benefit you. Formalise the reasons for returns in your policy so that the customer will be aware of the practices allowed. Doing this will avoid unfair returns, which are the fault of the unfair customers. At the same time, some mistakes can be made in the process of preparing the parcel, such as during labelling or addressing. Your policy should cover every probable user story – be customer-oriented. When considering and choosing the claims you want to put in your Return and Refund Policy, think that there are many benefits of ensuring that your policy is actually focused on the customers. Innovative businesses know that a well- tailored return program is an effective marketing tool. And the rate of return purchases is higher in places where refunds are free or the time where the refund time frame is longer. That is maybe counterintuitive, but it actually works. Many of the big fashion eCommerce stores have very customer-centric refund and return policies. Usually, eCommerce stores offer a 15 to 30-day return frame in which customers can return a product, and after that time passes, they ask for a refund. The biggest businesses extend that period up to 90 days. Decide what works for you and start to implement it!

  • Write a simple yet relevant return policy

  • Avoid the mistakes during order placements or packaging and describe a way to handle them in your policy


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