How to reduce returns for your ecommerce business
Returns are a fact for any retail business, especially if you’re an ecommerce business selling your products online. Without customers being able to pick up or try on their purchase before buying, it’s going to be almost impossible to avoid returns altogether and get that returns rate down to zero. But reducing returns is always good for your business and keeps it healthy. There are several ways you can do this, so let’s look a bit closer.
Why reducing your returns rate is a good thing.
The obvious answer is that fewer returns mean fewer refunds. And that means more profit!
That’s true, but there’s more to it. Reducing returns means your business spends less processing them – giving you more time for other things.
Fewer returns also mean happier customers and a stronger reputation.
And another HUGE plus is the environmental side. Every time someone sends something back to you, that’s extra transport miles adding carbon emissions to the world. It might mean extra packaging gets used, too. And if your customer is exchanging their item for something else, those environmental impacts from transport and packaging double again. It makes you think, right?
Knowing your returns rate for any particular product helps you compare product performance, regardless of how many of each item you’ve sold. It’s a great idea to work out your returns rates regularly (weekly or monthly) so you can address any issues.
Hang on, how do I calculate my returns rate?
An excellent question! You divide returns by sales. Simple.
Let’s use toothbrushes (why not) as an example:
Last week, you sold 20 yellow toothbrushes and had 2 returned.
You also sold 100 green toothbrushes and had 10 returned.
On first glance, you might assume that the green toothbrushes are performing worse than the yellow ones. After all, you’ve unpacked 10 of them in returns, and only 2 of the yellow ones.
But when you work out the returns rate, it’s easy to see that they’re actually on a level playing field. Here’s why (remember, divide returns by sales):
Yellow toothbrushes: 2/20 = 10% returns rate
Green toothbrushes: 10/100 = 10% return rate
And that is very useful to know for your planning and trading!
The good news is…
There are plenty of ways you can reduce your returns rate.
In fact, I’ve come up with eight reasons. Here they are.
Eight ways you can reduce your returns rate
1 · Include high-quality images for every product
Yes, you want to show your product off so it looks beautiful. But think about how you can tell your customer more about the item they’re looking at through your images.
Think different angles, zoom in on the details, snap the product with other props to show size and scale, and if it’s a garment show it both on a model and flat.
Don’t forget about video, either! Lots of us have video content these days thanks to social media, so reuse that on your product pages where you can, and you’ll give your customers an even better idea of what the product’s really like.
2 · Get your product descriptions right
A product description that promises the earth might drive sales, but it’ll also drive returns when the product doesn’t live up to expectations.
So, instead of making wild claims, make it an honest description that sells the benefits and paints a true picture of the product. Make it realistic, as well as attractive to the customer.
3 · Measurements matter
For clothing, this means really good quality, easy-to-use, accurate size guides and fitting tools that help your customer get the right size and fit first time, every time.
For other products, this means including things like dimensions and weights in your product listings. Factual details like this help remove doubt, confirm that a product is the right choice, and build your customer’s overall impression of what you’re selling.
4 · The power of reviews
Reviews give potential customers a balanced, unbiased opinion on a product, and that counts for a lot. It helps them make the right choice when they’re browsing.
Ask customers to leave reviews and, if you can, encourage them by rewarding them with a discount or similar.
5 · Avoid packing errors
Mistakes happen, we all make them. But if you send someone the wrong item, that adds to your returns. It’s also frustrating for them – not a good look.
Put a process in place to triple check any orders before they go out and you’ll save yourself headaches, paperwork, time and money in the long run.
6 · Combat serial returners
Annoying as it is, there will always be repeat-offenders who abuse the returns system, especially if you’re a clothing business.
They may be in the minority, but they can have a real impact on your business (and morale). Put a process in place now to identify and address any serial returners before they become a bigger problem.
7 · Invest in your packaging and delivery
It can be tempting to cut corners on packaging quality to keep costs down, but that turns into a false economy if it means your product arrives with your customer in anything other than tip-top condition.
The same might go for the delivery option or courier service you choose. If you’re getting a lot of reports of battered boxes or missing parcels, take a look at what alternatives might be available to you.
8 · Getting returns post-sale so they get the better price?
Encourage people to contact customer services to get the better price, rather than returning the item and buying it again at the lower price. It’s a slicker process and it’ll save you time and money.
That’s eight whole ways to reduce your returns rate – WOOHOO!
Want to get even smarter at tracking your returns?
Our Flourish Sales Tracker tracks returns (along with many other useful things), so you can easily see your net sales (sales minus returns) for any product.
This is really handy to keep an eye on. Total sales might make something like toothbrushes come out top, but once you take out the returns, toothbrushes might drop down the ranking so you can see that it’s really toothpaste that’s driving your business.
And it’s nuggets like that which let you focus your business so it’s as profitable as possible.
