Grappling with returns and balancing customer satisfaction: A delicate dance

Binging and purging: it’s not just a food-related problem. In fact, shoppers are far more likely to buy more than they intend to keep than people with eating disorders who eat more than they intend to hold down. It might seem to be a disturbing and/or unsettling analogy, but for eCommerce companies, serial returners are creating a problem that is both disturbing and unsettling to their profits.

Clear Returns, a U.K.-based company dealing in return intelligence platforms, has a constantly moving ticker on its website showing the estimated cost of returns, which in early April was already at £53 million ($77.9 million). The Wall Street Journal reported late last year that retailers that outsource their Web and fulfillment procedures, their costs related to returns, shipping and handling can go as high as 25 percent of sales.

To get a handle on the problem, some online retailers are looking into tracking shoppers to get more insights into the behaviors that lead to abusing a return policy. However, dealing with returns is a delicate dance that involves giving consumers incentive to make returns while also protecting the company’s bottom line.

The Economic Times published a piece recently about consumers in India returning goods worth up to $1 billion in the fiscal year ending March 31. eCommerce giants in that country, which includes Amazon, Snapdeal and Jabong, are more closely watching the behaviors of shoppers who average a return rate between six and eight percent of everything they purchase online. Some industries see an average of 25 percent, representing what most organizations would consider a problem. Some eCommerce companies in India have developed a ratings system to help track patterns of return abuse.

The problem with this type of monitoring is that it can scare off potentially good customers. The Economic Times’ article quoted one consumer as saying she wouldn’t be comfortable shopping through a website where the online business tracks her history and publishes her return-probability rating.

Shipping responsibility: Finding the sweet spot

For some consumers, returning goods is nothing short of an addiction, which compounds an already sticky issue with eCommerce companies. For instance, there exists a lively conversation/debate about who should shoulder the cost of shipping returns. Companies can pull in more business with a promise of free returns, but it is so costly that even some of the top eCommerce companies aren’t willing to offer totally free returns. Finding the sweet spot is a source of contention, which is why online retailers need to be as thorough as possible to avoid situations where consumers actually “need” to make a return.

Be honest and descriptive about products

Perhaps one of the greatest percentages of returns are related to clothing, which is natural given the nature of the product. However, retailers can reduce the odds of having a product returned by offering highly accurate product descriptions and sizing charts, which means you’d be better off avoiding the manufacturers’ product description on your site. Being crystal clear about fit, material etc. can reduce the odds of a return.

Tighten up your photo game

Accurate photographs are also a high priority among retailers with lower-than-average return rates. Don't edit the photos to make the product appear to be something it’s not because this defeats the purpose. Consider adding a 360-degree view of the product and offering representative photos of differing color options when appropriate. And be sure to scale your photographs so they’re all uniform across your entire product line.

Shopper reviews give your customers a voice and insight to product details

Allowing your customers to add their thoughts about your products brings an objective viewpoint that prospective customers appreciate. It also may offer insight that a retailer didn’t think of. For example, a product review could mention the fact that a piece of clothing “runs small.” This bit of insight can be a valuable piece of information for a customer who is on the fence with what size to purchase. The risk here is that a negative review from a customer with a grudge can tarnish an otherwise flawless product, which is why it’s essential to manage incoming reviews.

Include an FAQ

For any other questions that customers may have, retailers can either provide an FAQ link for shoppers to follow, or just include the answers to the most frequently asked questions in your product description. Every additional piece of product insight has the potential to reduce the probability for returns.

Monitor return rates per product

Every product has the potential for being returned. Best sellers could even turn into a frequently returned item. By tracking return rates as they arise, retailers can act fast to potentially curb additional returns. Retailers can then act accordingly, be it revamping the product description that may be erroneous or making improvements on the item itself to address the issues causing the returns.

At NetSphere Strategies, we help eCommerce companies manage the challenges they face on a daily basis. Our team of experts has extensive experience at offering technical assessments and designing eCommerce and user experience strategies that work. Contact us today to see how you can limit your rate of returns.

To learn more about creating an exemplary product page that can reduce the possibility for a return, download an infographic that includes five best practices.