5 best practices to reduce return costs
At our most recent webinar, “Conquer holiday returns during COVID-19,” we were privileged to be joined by Betabrand’s eCommerce Demand Planner, Manpreet Singh, as well as Happy Returns CFO Andrew Pease for a discussion on the industry’s escalating returns costs.
For those who were unable to join us, here are the key takeaways, in the form of five best practices for reducing the cost of your returns.
1. Promote return policies clearly
Did you know 68% of shoppers look at a return policy before making a purchase? Hiding your return policy in an effort to avoid returns will do little more than frustrate your shoppers. Instead, draft a clear and prominent return policy to increase conversion rates and decrease customer churn.
Betabrand’s policy is a perfect example of this. It’s in plain English (without unnecessary, confusing jargon), it’s simple to read and understand, and it has a large call-to-action guiding you to the first step in its return process.
2. Make exchanges easy
Over 50% of apparel and footwear returns are due to size, providing you with an opportunity to keep the sale by suggesting an easy exchange based on the shopper’s return reason. This allows merchants to retain more revenue that they’re not giving out in the form of refunds, and it ensures the shopper gets the item they want in a perfect fit.
Manpreet shared Betabrand’s experience with our one-click exchange feature, which intelligently suggests a new item to shoppers based on why they’re returning. If a shirt is too small, for example, our software suggests the next size up if it’s available in your inventory, and it makes it as easy as one click to complete.
3. Offer shoppers return choices
Shoppers want returns to be free, easy, and fast. Providing them an assortment of ways to make a return helps raise customer satisfaction, lifetime value, and retention. This is especially true if you provide an option that lets them bypass the hassle and long wait times that come with returning by mail.
In the webinar, we used Amazon as an example of a company providing multiple return methods successfully. They offer shoppers four different options for returning box and label-free before they promote mail returns, including drop offs at Whole Foods, Amazon stores, Kohl’s, and UPS.
4. Offer box-free returns in person
When it comes to providing multiple return methods, it’s the in-person return option that will actually help you reduce costs the most. Not only does this method make your first mile free, but it allows you to sidestep the high cost of individual shipments by aggregating multiple items in one container and shipping them back in bulk.
Amazon provides multiple different options to return box-free and in person -- at Whole Foods, Amazon stores, or via its partnership with Kohls. Amazon does this for two reasons -- to ensure its shoppers have friction free return options and because getting the shopper to drop items off allows Amazon to aggregate returns, making in-person returns cheaper than paying for returns through the mail. The same principle applies to items returned to your store, or to a third-party network that you partner with to accept returns on your behalf.
5. Use policy to drive desired behaviors
The last best practice we discussed is using your return policy to help steer customers toward desired behaviors. For example, all research suggests shoppers want free returns, but nothing says that the free option has to be the mail. It makes more sense to make your free option be the cheapest for you.
As noted above, the cheapest option is very likely in-person returns to your store or third-party network. More and more retailers are electing to make these options free and impose a charge for returning by mail, recognizing that there are no ways to achieve economies of scale with individual mail shipments. Retailers are using return fees for mail while making in-person options free to create an incentive for shoppers to select the least expensive option, while still giving them a free return method they crave.
Want to watch the entire webinar about conquering holiday returns during COVID-19? View the recording here.
