Expert Guide on Ecommerce Returns: Why They Happen & How to Reduce Them

Here is the bottom line: Ecommerce returns are inevitable. The good news is once you accept this fact, you can better prepare for them.

Originally shared at The Good.

An online store offers many advantages over a physical store.

Online stores allow people to shop anywhere, any time. Customers can read reviews about the product before making a purchase decision. And there are typically more payment options available. Yet, despite all these advantages, online stores see a higher return rate than physical stores.

According to Hubspot, ecommerce stores see an 18.1% return rate, while physical stores experience 8-10% product returns.

Now, it’s normal for most businesses to shudder when ecommerce returns are brought up. It’s a tedious process that takes a lot of time and effort. But it can’t be avoided.

If you do things right and the returns process is hassle-free, 92% of customers will buy something from you again.

Returns are a part of business, so we’re not only sharing strategies to reduce ecommerce returns, but we’re also covering strategies for keeping customers happy with an optimized returns process.

If you want to learn more about:

• Why customers return the products they purchase
• How to optimize the digital experience to reduce returns
• How to optimize ecommerce returns through digitalization
• Why it’s important to prepare for the inevitable

This article is for you.

What are the Common Reasons for Ecommerce Returns?

Before we dive into reducing ecommerce returns and optimizing the process, it’s important to understand what leads customers to return a product.

To pull a quote from our founder, Jon MacDonald’s, book: “Optimization isn’t a “one-and-done” guessing game.”

There are a lot of available tools and techniques to gather this data from customers–the easiest of them is to conduct a survey. You’d be surprised at how much insight this can give you into your customers’ preferences and expectations.

While your customers might have something else to say, survey data shows the top reason customers return products is due to damaged or broken items. If this is a constant problem for you, you might want to consider taking a look at improving your packaging or changing your shipping or logistics partner that handles delivery.

Other top reasons customers return items are:

1) The item doesn’t match the description

2) The customer doesn’t like the item

3) They feel the quality doesn’t match the value and

4) The item arrived late

Now that we have a better understanding of why customers return products, we can dive into how we can fix the problem.

Optimizing Your Digital Experience to Reduce Ecommerce Returns

While we have established that ecommerce returns are inevitable (and unavoidable), it doesn’t mean that you can’t take steps to reduce the number of returns that you receive. Here are seven tactics you can implement to reduce high return rates.

1. Focus on detail-rich product descriptions.

As mentioned, a whopping 64% of ecommerce returns occur because the product looked different in person than how it was described on the website. This is the second biggest reason why customers return products. It can be frustrating receiving a product that you may have waited weeks to get in the mail, only to open it up and realize it’s not what you wanted or needed.

The best way to eliminate customer disappointment is by bolstering your PDP descriptions. Make sure your customers know exactly what they’re ordering. This is the template structure to get you started:

1. Create a description headline that will hook your audience.
2. Use a description paragraph to expand on what makes the product unique. Focus on providing a solution rather than describing benefits.
3. Follow the description with a bulleted list of key product specifications and features.
4. Conclude with credibility, social proof, or urgency, and include a call-to-action to motivate the user to purchase.

A great source of research for writing more persuasive product descriptions is your customer reviews.

Identify what your customers appreciate about a specific product and amplify that in your product description.

For more on PDP, check out our video on PDP design elements below.

2. Focus on improving product imagery.

This is a fairly obvious recommendation, but you’d be surprised how often it’s overlooked when a brand is working to optimize the customer experience of its site.

Providing a variety of product images that show multiple angles and situations can not only improve conversion rates, but also reduce the chance of a customer being surprised by what they thought they ordered. Show the customer how the product could fit into their life rather than trying to guess how they’ll use it.

How you display product images can also impact the customer experience. A recent winning test found that exposing product images instead of hiding them in a carousel that customers have to click improves conversions. Ultimately, we hypothesize this would also reduce returns.

We’ve also tested the effectiveness of product videos on PDP. Product videos allowed customers to see the product in site, giving them more information and, ultimately, more confidence to make the purchase.

3. Implement a dynamic sizing chart.

Providing your customers with an accurate and detailed sizing chart is an essential part of reducing returns for your products. This is especially relevant if you’re in the apparel industry, as average return rates for online apparel brands hover around 33%.

ASOS has a great approach to helping customers pick the proper size with a short survey that utilizes aggregate data from past purchasers to help users select the right one for them. You can input your height, weight, body type, and personal fit preferences before the algorithm provides an accurate estimate of your perfect size.

It’s a helpful and efficient way of reducing returns to provide a more user-focused shopping experience.

4. Elevate the value of customer reviews.

Giving customers the option to leave detail-oriented product reviews is a great tactic for elevating social proof on a PDP and leveling expectations for shoppers.

Reviews unlock valuable insight into your products that your company can take into account to reduce returns. Reading fellow customer reviews also educates shoppers and gives them context before making a purchase.

One helpful tactic to use customer reviews to reduce returns is to have fields like height, weight, body type, and size ordered and then offer filters to those specifications. Everlane does this really well. You’re able to search for people who are your same height and weight and see if the size they ordered worked for them.

Another leader in leveraging product reviews is Nike. They provide customers with the option to evaluate products based on three criteria: size, comfort, and durability. If a particular item runs small, you can indicate that in your review so future customers don’t find themselves ordering the wrong size. This information is also collected and used by the company to help make improvements to product design.

5. Promote exchanges instead of returns.

A Statista survey found that almost 80% of shoppers won’t return to shop at a store that doesn’t provide a good returns experience. By making the return process easier, retailers can capture this revenue and keep customers coming back. One way to streamline the return process without losing money is to encourage exchanges.

Instead of having to give money back to your customers, an exchange will allow your customers to remain engaged with your business. You can offer additional incentives to encourage them to ask for an exchange instead of a refund. For example, you can offer a certain amount of store credit on top of the item that was exchanged. This also increases the likelihood that they will buy from you again.

6. Leverage Quality Tiles in Your Product or Category Pages

Customers often won’t grasp the quality or value of a product at first glance.

And 8% of customers return items when they feel that the quality does not match the amount they paid. But you can improve this by using quality tiles in your product or category pages.

Quality tiles allow your customers to learn more about the craft, quality, materials, or heritage that goes into each item that you sell.

Take a look at this winning test we ran for Beckett Simonon, where quality tiles replaced some product images. Not only did the customers see the values important to the brand, but it showed them what exactly they were paying for. In this case, language like “handcrafted work by artisans” helped align product quality with price.

7. Map out your digital customer journey and find points for customer education

When constructing a customer-centric digital journey, it’s important to consider where you can include education, information, and customer touch points. This is also extremely important if you want to minimize ecommerce returns.

Journey mapping and orchestration allow you to take the data you have available and apply that data to map out personalized experiences that will keep your customers engaged and informed.

For example, you can send a post-purchase email to your customers. Use the opportunity between order and delivery to educate customers about the product, reduce objections that lead to returns, and keep people excited about what they just purchased.

Regardless of the type of product you’re selling, sending a post-purchase email to educate customers about their purchase is an important part of decreasing returns and providing an optimal customer experience.

Bonus: Implement a liberal return policy

Promising customers an easy and expedited return process upfront will empower them to purchase a product with the confidence that if, for some reason, the product doesn’t end up working out, they can send it back worry-free.

There’s a reason why brands like Nordstrom and IKEA are known for their liberal return policies. Generosity builds trust, and trust leads potential customers further down the path to conversion.

One of the worst things you can do as an ecommerce business is restrict your return policy to save a buck. 79% of consumers won’t even purchase from a brand if they don’t offer to pay for return shipping.

An important point to note here is that we recommend you implement a fair return policy, not an excessively generous one. Companies like LL Bean and Glossier, well-known for their liberal return policies have had to revise them because of abuse.

Every ecommerce business has the choice to enact a generous return policy. If you choose to go to the trouble of implementing one for your customers, you’re likely to see positive results because of it.

Tips To Make the Ecommerce Returns Process Seamless

So, we’ve talked about why customers return items and how to reduce ecommerce returns through seven digital experience optimization strategies. Now, let’s talk about what to do when a customer wants to return an item. In short, this is what you do when the inevitable happens.

1. Keep customers informed about the status of their return

Just as you update customers about shipping their items when they make a purchase, it’s also highly important to set up a flow for any ecommerce returns. Don’t compound any negativity by keeping them in the dark. Inform customers where the product is, and if they request an exchange, update them on the status of that as well.

It will be an advantage to find a logistics partner or shipping company that provides tracking information. They have a system that creates tracking numbers for customers to be alerted when the product has been picked up, delivered, and received at the warehouse or destination.

Likewise, you shouldn’t forget to update customers regarding their refund requests. This brings us to our second point below.

2. Process refunds in a timely manner

Not all customers are going to want an exchange, and not all customers will settle for store credits. It happens, so what do you do next? You have to process their refund. I know; nobody ever gets excited about this. However, processing their request in a timely and efficient manner shows your customers that you care more about them than their money. This will still leave them with a positive impression about you and your brand and keep them coming back to your store. To help you process refunds faster, you can:

• Invest in software to process refunds
• Create an online refund portal to streamline the refund process for every customer

3. Take feedback from customers

Once the product has been returned and the refunds processed, ask your customers for more feedback. Again, this will show them that you are willing to learn from your mistakes and correct them to avoid future complications. This will assure customers that when they do decide to order from you again, they won’t have to deal with the same problems. This also gives you data to work with, which is essential for the final step.

4. Analyze returns data

Everything is a learning opportunity, even ecommerce returns. Optimization is an iterative process that involves applying and compounding new learnings constantly. There are several ways that you can use returns data to grow your business. Some of these include:

Improving your products. With the help of returns data, you can identify customer preferences and patterns in consumer behavior. You’ll know customers’ preferred sizes, colors, or materials. More likely than not, you’ll also encounter complaints that can help you improve product design, material quality, and product descriptions.

Enhance customer experience. Analyze your returns data to improve the customer experience during the returns process. Track the time it takes to process returns, test out different exchange offers or credits in place of refunds, and then streamline your processes accordingly.

Unlock new sales opportunities. When you understand why customers return your products, you identify opportunities to expand your product offerings and target untapped segments in the market.

Optimizing your returns process is not going to be an easy task, but it can be a rewarding endeavor. Not only do you get to learn more about your customers and your own business, but you also have the opportunity to build more trust with your customers and create long-lasting relationships. Trust is the foundation for any good customer relationship. By creating a seamless return experience, you leave customers with a positive impression of you and your brand.

Prepare for the Inevitable

Here is the bottom line: Ecommerce returns are inevitable.

The good news is once you accept this fact, you can better prepare for it. Utilize the data you have available to optimize your returns process. If you don’t have the data, find out how to gather it. By implementing the tactics mentioned above, you can help provide your customers with a clearer picture of your products, and ensure that a higher percentage of them are satisfied with their purchase.

Accept that returns are a part of the customer journey, and make it a seamless part of their digital experience so that customers don’t get frustrated or turn to a competitor.

If your business is struggling with a high return rate, you may consider looking into our Digital Experience Optimization Program™. Iterative optimization is the best approach to solving an issue like this, especially if you haven’t been able to identify the source of the problem properly.