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How to Reduce Returns on E-books & Other Digital Products

If you’ve ever sold an e-book, there’s a good chance that you’ve had to deal with at least a few e-book returns. They’re unfortunate, but they do happen, and you need to be prepared for them when they arise. 

Fortunately, if you’re selling e-books the right way, you’ll be far less likely to run into issues with the return process in the first place. There are several reasons why people return digital products, and figuring out how to prevent the issues will make all the difference in your success. 

Check out our podcast interview with ClickBank and August Grebinski on how adding a physical product to your e-goods or e-book can drastically reduce your return rates.

Also available on: Apple Podcasts & Google Podcasts

Interview Q&A Highlights:

Mel Printing has been around for over 60 years, and I’ve been with the company serving as Vice President for 36 of those years!

What makes Mel Printing stand out from other printing companies is that we’ve been able to change with the times. We are continually improving our products and service offerings. Early on, we listened to our customers’ needs and found ways to grow to meet their niche requests. For example, when we started working with a few health and wellness brands, we became FDA compliant, and now health and wellness fulfillment is one of our specialities. 

Because we have always been customer centric, we’ve been able to pivot with changing technology and market demands. Now, we are far more than just a printer, we are also a manufacturing company and fulfillment center, thanks to Print Bind Ship.

Print Bind Ship was created to be the fulfillment aspect of Mel Printing. Particularly after Amazon “rose to power,” we saw the shift in consumer behavior and knew that we needed to jump on the fulfillment wagon as soon as possible. Print Bind Ship is our solution to the relatively recent changes in consumerism, and we want to share this solution with other SMEs around the country. We believe that small- and medium-sized businesses, e-commerce in particular, need a partner like Mel Printing and Print Bind Ship to stay alive in this age of “big business.”

Businesses rarely understand the breadth of our services, and they have nothing to lose by consulting with us. We’ve seen the printing and fulfillment industry completely change over the decades. We have a ton of knowledge and experience to help both small and large enterprises alike. 

If you’re selling a digital product, you only stand to gain by having a conversation with us about it. You are already successful, why not try capitalizing on it! 

On the other hand, if you’re just starting out, it makes the most sense to understand what your options are.

The great thing about Mel Printing and Print Bind Ship is that we work closely with our customers to find creative solutions. We don’t require large minimum order quantities. We want our customers to succeed; their success is our success. 

Not only are we a printer, but we’re a manufacturer and fulfillment company as well. We offer apparel fulfillment, DVD / multimedia fulfillment, and book printing, binding and shipping services. 

We have a customer that had an e-book and never printed one physical copy. And when they finally printed and distributed their book through us, they sold well over 1 million copies. Really, all thanks to our seamless printing and distribution services.

There are few reasons return rates are lower for physical products than they are for digital products. First, physical products can’t be pirated. Oftentimes with digital products, people will just download the video or PDF or whatever the product is, and then turn around 15 minutes later and return the product. Retailers are out of luck in situations like this because many bigger wholesalers, like Amazon, require that sellers accept returns on all products.

Another reason return rates are lower with physical products is that, for the most part, people value physical products more than purely digital products. Physical products have a higher perceived value. Anybody can put a PDF together, but having a physical product shows a certain amount of effort was put forth. Plus, there are generations of people who like tangible goods. It’s like having a book on your shelf versus a book on your kindle. 

Also, convenience is a factor. If someone makes a $15 purchase on a physical product and wants to return it, but has to go to the post office and pay for shipping, they probably won’t make the effort. Small purchases are often not returned because the customer doesn’t want to deal with it. Whereas, with digital products, returns are much easier. No going to the post office, no paying for shipping.

In short, there’s several reasons physical products have lower return rates, it depends on the circumstances. But I’d say, for the most part, it comes down to perceived value.

People just like stuff! At the end of the day, why do we all get bigger houses, more vehicles, newer phones? People like to have things, they always have. 

Corporations spend billions of dollars on product design. There’s a reason Packaging Design is a hot degree for students right now. Consumer behavior is driven by human psychology. Obviously, science is behind why people choose one product over another. 

However, I see this changing today with the amount of time and money consumers spend on apps and gaming. There is certainly a shift in the consumer’s perception of value. Nowadays, customers are placing more value on how much entertainment they receive and how much time an app can save them. 

The best way to appeal to today’s consumer is to do it both ways—by offering digital products in a physical form and physical products in a digital format.

Vendors can incorporate physical products into their digital offerings a few different ways. First, I’d start with a test run for a book. Books (whether it’s a workbook or a hardcover or an informational pamphlet) are a great way to test the market and price points. For example, not everyone can start off with 100,000 printed copies, so start off with 100 copies. Do a split test to see which sells better, the digital copy or the physical copy. This will also help you discover which price points work best. You’d be surprised, sometimes the same product sells better priced at $39.99 than at $29.99. 

Another way to incorporate physical products into digital offerings is to put the digital asset on a locked thumb drive, where it’s not downloadable and can only be accessed by the purchaser. This removes the threat of piracy or downloading the asset and then returning it. Sending digital products as a multimedia file through the mail might seem like a hindrance, or too costly at first, but it actually adds value to the product. 

One way I see brands build customer loyalty, especially in health and fitness, is by sending swag along with their customer orders. Including a branded sticker or t-shirt or wrist band along with a product order might subtly influence purchasing, but moreso, it’s free advertising! Swag builds brand loyalty especially for higher valued (more expensive) products.

One of our customers recently shared the following stats for their products:

  • Within their B2C company, they found that 73% of their customers prefer a physical product over the same digitized product. 
  • They offer customers the same product as either a physical copy that is printed and shipped, or as a digital download. Both products cost consumers $15, besides that those who choose the physical copy pay $5 more for shipping and handling. Ultimately, both versions of the product have the same profit margins; so, it’s a wash for the company whether they sell the digital version or the physical copy. However, it goes to show that customers will pay more to have a physical copy versus a digital version.
  • When it comes to returns on this product, the physical product has a low return rate of only 2.3% while the digital product return rate is 8.7 percent. 
  • The average order value (AOV) per customer differs as well for the physical and digital versions of the product. Customers who choose the physical copy have an average order of $39, while customers who choose the digital version place an order of only $25, on average. Basically what this tells us is that people who choose the physical product buy more—44 percent more.
  • On the lifetime value side (LTV) of the equation, customers who purchase the physical product end up spending 37% more than those who choose the digital version. The preference for physical products and the customer loyalty that it builds is pretty significant, considering how much value it adds to the bottom line long term.

What are e-goods & e-books?

E-goods refer to any digital goods, including books as well as other forms of digital media such as music, videos, internet radio, television, digital subscriptions, advertisements, coupons, tickets, and more. 

Newer forms of e-goods that people often buy include cloud-based online games and mobile apps. But other styles of e-goods—like worksheets, webinars, blogs, and tutorials—have been around for ages. 

Templates, patterns, and website themes are all considered e-goods as well. Essentially, if it can be made digital, it can become an e-good.

E-books are digitized versions of printed books, and they are usually offered on digital apps like Kindle and other e-reader devices. Think of it like this: not all e-goods are e-books, but all e-books are e-goods!

The pros of selling e-books

E-books offer a great solution for customers who are looking for books that are more affordable and accessible than physical copies. As an author, e-books can help you test a product before committing to the production costs associated with physical books. E-books also offer you the ability to increase the accessibility of your book by making it available online.  

Why e-book returns are high

Of course, for every pro, there is a con. The return rates on e-books are staggering, to say the least. The biggest reasons for these high return rates are that the books are easier to pirate and they don’t hold as much significance to the owner as physical books do. 

Easily pirated

E-books are so easily pirated that some people wonder why they would even pay for them in the first place. Of course, if you do it right, you can avoid piracy and get maximum value for your e-book. 

Return policies

The other big problem here is that retailers and e-book authors must honor the return policies of sites like Amazon, which often gives readers 60-90 days to return a digital product. As you can imagine, that’s more than enough time to read a book and still return it, which is causing issues for many.  

Unfortunately, most e-book authors are subject to retailer return policies, which may allow for more time to return a product than an author would permit on their own. With a longer return window, readers have more time to return their e-book, which increases the odds that they’ll return. 

E-goods often have a lower perceived value

Although this isn’t always the case, e-goods tend to be viewed as having a lower value than physical goods from the consumer’s perspective. E-books lack tangibility, which can accentuate outlook. In fact, according to an interview with Vice President August Grebinski, 73% of customers prefer a physical product over a digital product. 

Not only that, but e-good product returns have a return rate of about 8.7% while physical copies of the same book only see returns of 2.3%, according to Grebinski. This goes to show that people are more detached from electronic goods — e-books included — which is likely a large part of the high return rates. 

How to reduce e-good & e-book returns

When you have a good e-book and a good producer, there are several ways that you can help prevent returns or at least reduce the impact that they have on your business. Keep in mind the fact the lifetime value of a customer who purchases a physical book is 37% higher than customers who buy an e-book.

The solution to e-book returns

It’s human nature to like things. When we spend money, we expect to receive value in return. That’s why offering a physical copy of your book—or at least something tangible along with your e-book—can improve the value of your readers’ e-book purchase. 

Print a physical copy

Though it’s not necessary to print physical copies of your e-book, it’s wise. The best way to prevent e-book returns is to make sure people have the option to purchase a physical copy. 

It’s easy to self-publish a printed book these days, and with the help of a dedicated 3PL provider, it can be even simpler than you think. Having a printed product reduces the likelihood of returns, increases the value to the buyer, and minimizes the risk of pirating. 

E-good creators: here’s how to reduce product returns

E-goods are great because they are a lower-cost way of testing the market all while helping brands expand more rapidly than they do with the launch of physical products. However, e-goods also have a much higher return rate, making them more vulnerable to value losses due to the way they are perceived and valued less than physical books.  

Offer multimedia

People are willing to spend more on shipping and handling costs when products include multimedia. Consider putting your digital product on a flash drive. Then, you can offer both versions to the customer by handing out “lockable” USB drives that will prohibit people from sharing or pirating the download. 

Custom notebooks

You can often include a workbook or a custom notebook along with your e-book to improve their engagement with your book. This also adds value to your book which reduces the likelihood of your e-book being returned. 

Consider swag or apparel marketing

If you want to increase loyalty and brand awareness, consider swag and apparel marketing. Stickers and t-shirts are two great ways to engage with people. T-shirts are popular, but stickers are both a cheaper choice for the budget-minded shopper and more affordable for authors. 

Custom kits

Custom kits are a great way to increase engagement and build loyalty among customers. When you know your audience, you can create the perfect kit that will appeal to them. 

Imagine receiving a package in the mail as part of your e-book purchase instead of just downloading a digital copy and calling it a day! Custom kits are special, and people are far more likely to keep items that give them a personalized unboxing experience.

Consult with Print Bind Ship to reduce e-good returns

Self-publishers and digital creators can benefit from the services of a dedicated 3PL provider like Print Bind Ship. Contact us today for a free quote. 

We’ll help you create the perfect accompaniment for your digital goods. As professionals in the e-commerce industry, we know what it takes to keep returns low and loyalty high with digital goods!