How to Handle eCommerce Returns | Guide to Managing eCommerce Returns

Retail returns have long been a thorn in the side of retailers and eCommerce stores are no exception. No matter how good your products or your business methods, you will always have someone who wants to return something for one reason or another. Like standard retail, eCommerce returns should follow standard protocols and give the customer the chance to get what they want. Of course, there’s also the shipping factor that complicates things for some. 

Let’s take a closer look at eCommerce returns; why they matter, and how you can get more out of your returns management with a 3PL partner like Print Bind Ship. 

Why eCommerce Returns Matter

Returns matter because customers matter. Many online stores have even higher return rates than brick-and-mortar stores. This can have a huge financial impact since their profit margins are already on a shoestring. Although returns are anticipated to cost the industry more than $550 billion in the next decade, merchants must understand why returns are made; as well as how they can create a good policy to offset this increase. 

What drives eCommerce Returns?

Several factors drive people to return items that they have purchased. Typically, that’s divided into four categories. Serial returns or returns by people who buy multiples of the same product without realizing it are common. However the lowest percentage of returns at about 20%. 

55% of people want a hassle-free return policy in choosing brands. In addition, 47% of those shoppers expect to be given a prepaid return shipping label if they are to return something. People return things because they changed their minds, or because a product arrived differently than anticipated. Clothing retailers are even starting to offer wardrobe trials and at-home try-on services to save the financial impact of returns. 

People return things because of:

  • Poor quality 
  • Damage or defect
  • Product arriving not as described
  • Delivery issues
  • Change of decision

More importantly, they expect to be able to complete eCommerce returns quickly and easily, regardless of the reason. 

Cost of eCommerce Returns

Speaking of the financial impact, eCommerce returns cost online retailers a small fortune. Not only is there the transaction loss and the return of the sale or profit, but then you have to factor in return shipping, restocking, and other fees. 

If you break it down, the cost of returns after overhead, return overhead, retail and wholesale costs, and other factors, the actual expense of a single return is about 14%. That means on a $15 profit that’s returned, you’ll end up with a $1 margin. Plus, then you’ll have to restock and resell the item, so that adds even more to the bill. 

How to Reduce the Cost of eCommerce Returns

When it comes to cutting down the cost of your returns, it’s all about streamlining and automating as much as you can. In addition to using services like USPS flat rate shipping, you can also improve your policies and partner with a 3PL provider to handle your returns for you, saving you time and money along the way. 

Streamline your process for returns

One of the best things that you can do is create a standard, streamlined return process for customers. Spell everything out in detail. Give people multiple easy options for returns, provide them with the tools that they need, and make sure that the process is easy to follow. You can even give people the choice to return things in person, drop them at the post office with prepaid shipping, and more. 

Automate the eCommerce return process

Another option is to automate your returns process. Part of this comes in partnering with a 3PL provider who can ensure that returns come in; as well as processed quickly and efficiently so that you’re not handling each one individually. You can automate by offering prepaid shipping labels and a dedicated process so that all customers have to do is decide to return the product and follow your instructions. When you automate, this can save a lot of money because you’re not paying for a lot of the labor involved. 

Clearly state your return policy

One way that you can reduce the cost of returns and the incidence of them is to have a clear, well-defined, and visible return policy for customers. That way, if there is a dispute, you can point to the policy and keep it fair for everyone. You do want to give the customers what they desire, but you also have to be able to make a profit. A clear return policy will save your profits and ensure everyone is on the same page. 

Review Your Product Packaging

Sometimes, returns can be thwarted by taking the time to update product packaging and make sure that items look as they are described. People often buy things and then want to return them because the packaging was misleading or didn’t deliver what they anticipated. Small changes can go a long way here. 

Solicit customer feedback (and Follow It)

Of course, the best way to reduce returns and improve your profits is to ask people what they think. Your customers will tell you exactly what they expect and how you can deliver better solutions with your return policy and your transactions. Take advantage of that feedback to help reduce your return costs. 

Returns Don’t Have to Be a Dreaded Task

It doesn’t take a lot to process returns when you have the right resources on your side. Working with a 3PL partner can take the headache out of returns and fulfillment and ensure that everything is done according to a standardized, automated process. Contact the team at Print Bind Ship for a free consultation and to discuss how we can help improve your returns and reduce their impact on your bottom line.