High Return Rates Are Costing You Money

Written by Jon on 3rd June 2016

A clear and favourable returns policy on your website will normally mean a higher volume of sales and a healthy conversion rate, a tick in two big boxes.

This week, however, a report has shown some interesting stats with regards to how high returns rate are having an impact on business’s bottom line.

This is something that should be considered when implementing these changes into your business to ensure that higher conversion rate actually equates to profit rather than a burden on your business.

Highlights from the report

3 in 10 customers deliberately over order ….. with the intention of returning

60% of online retailers state serial returners has negatively impacted their business

30% stated that profits were affected

20% of online retailers have increased their prices to help cover the costs

Source:  Sky News & Barclaycard

So how can we minimise the return rate of your business and what should be included within your returns policy? Here’s a few tips:

Clear Product Descriptions

If your product description is misleading or does not identify key points then expect a high return rate of this product. A poor description may get you the sale, but it won’t keep it.

If you are selling clothing then it is a good idea to include as much information as possible including size comparison charts.

High Quality Images

I think I have mentioned the importance of this a couple of times before, the image should clearly portray the product i.e. colour, shape and multiple images can only be beneficial.

If the product received does not match the image on your site, a refund is quite likely….

Use clear language

Your Returns page should be informative, clear and explain your returns procedure so that there is no confusion when a customer attempts to return an order. This should make sure they are aware of what to expect i.e. cash or credit, and the time frame of which they can return an item.

Team Training

Knowledgeable staff can not also prevent the return by offering support and advice on the order (i.e. unplug from the wall for 30 secs……. ) but also guide the customer through the process in a simple and frictionless manner maintaining a positive experience at all times.

No Hidden Costs

If there are additional charges or postage fee’s these should be made clear to avoid any surprises.  It is also important to make it clear that if it is an error on behalf of the business, or faulty, then the customer should incur no cost.  (Amazon is awesome at this!)

Don’t hide it!

You should ensure that your returns policy is easily found on the website so customers are aware of what to expect and the process they need to follow when returning an item i.e. returns code, postal address.

Identifying the problem

If you do have a high return rate then the first steps would include identifying particular product trends and why returns are so high, customer feedback is helpful and can help identify the cause.

If there is a higher than usual number of returns due to error then a review of the order management process may be required to pinpoint the issue/s.

What is a healthy return rate?

Difficult to say as it will vary depending on the nature of your business and what you sell, fashion in particularly is generally higher however a study by University of Regensburg as summarised on this article does point to a few stats:

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Where do you fit in the above?