Returns are part of reverse logistics and no e-shop can avoid them. Uncollected, damaged or returned new goods go back to the warehouse. According to surveys, the return rate from online purchases is 10%, in extreme cases it is close to 50%. Despite this, some e-shops still do not know how to work with reverse logistics.
Even returns can be predictable
To prevent returns from blowing a hole in your budget, review your sales to date and monitor:
- return rate (what percentage of all orders were returned by customers) ,
- returnability of specific goods (it may happen that some products are incorrectly described in the e-shop, for example) ,
- warehouse processes (returns can be caused by errors in goods removal or shipping) ,
- average costs per return (includes transportation, inspection of goods, any service or repair, and restocking).
Return rates vary across industries. While electronics stores have low returns (around 5%), the fashion industry is much more affected (around 30%). If you’re just starting out and don’t have your own statistics, find out what the standard is in your industry.
Once you have the data, you can estimate how many returns you will encounter and what costs to expect. Returns naturally also vary by season – for example, expect an increased number of returns after Christmas or seasonal sales. You can increase customer service or the number of warehouse workers on receiving goods during these hectic periods.
In many cases, you can prevent returns
In addition to the data mentioned, also focus on obtaining relevant feedback from customers. When they return undamaged goods, get their reasons. You can respond to some of them quite easily, for example by re-photographing product photos or clarifying descriptions on the e-shop so that the customer knows what they are ordering.
Communication with your customer is important at all points in the purchasing process. By regularly informing them about the status of their order, you can prevent them from forgetting about their order and not being able to pick it up.
A specialized warehouse management system (WMS) will also make your work easier. It will help you create return positions directly in the warehouse, which will greatly facilitate receiving. In the WMS, you can also set up a suitable storage strategy that will help keep the warehouse running smoothly. Thanks to barcode readers, warehouse workers are better oriented and make fewer mistakes.
When returns do occur, make them a pleasant experience
It is desirable that the customer processes the return as quickly as possible. The sooner the goods are returned to you, the sooner you can resell them – before the season ends or a new model is released. You can offer free shipping and include return instructions with the order – perhaps with a pre-printed shipping label.
Also, let the customer know that you are handling their request and when you will issue a refund (or send the repaired item back). Making the return process a pleasant experience increases the likelihood that they will purchase from you again.
A complicated process can discourage some customers from returning. This then distorts the statistics for e-shoppers and reduces the satisfaction of the customer, who is unlikely to buy from you again. Paradoxically, a successful return can lead to even higher satisfaction than in the case of a standard purchase, when everything is fine.
For complete instructions on handling returns , download our e-book .
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