E-commerce has quickly become customers' preferred shopping method. Although it has opened new opportunities for merchants as a service favored by customers for its convenience and speed, it also has a major drawback -- the high product return rate. In the United States, for example, the average return rate for online purchases was 30% in 2020, compared to 8.9% for physical stores. This is because the e-commerce sector faces higher costs, more complex logistics, and different customer demands.
However, the impact of this drawback can be mitigated through effective methods. There are various ways to reduce your online store's return rate and improve customer retention and loyalty. Here are five simple steps you can follow to control this phenomenon:
1. Pay Special Attention to Product Descriptions
Provide accurate and detailed product information. One of the main reasons customers return online purchases is that the products do not match their expectations. To avoid this, make sure you provide clear and precise product descriptions, specifications, features, and benefits. Use high-quality photographs and videos that showcase the product from different angles and in different configurations. Include customer reviews and ratings that highlight the pros and cons of the product. If you run a fashion online store, you can offer a virtual fitting room service. Based on AI, this feature allows customers to see how a product would look on them before placing an order.
2. Offer Returns at Reduced Cost
Another reason customers return online purchases is that they do not want to pay for shipping and returns. Although it may seem contradictory, many of them prefer to return products and buy from a merchant who offers these services for free. According to a report by GPeC, 70% of online shoppers want the return process to be free. At the same time, if you offer free or reduced-cost shipping and returns, customers will be encouraged to buy more.
3. Implement a Clear and Flexible Return Policy
According to the same GPeC report, 66% of respondents mentioned the ease of the product return process among the criteria for choosing online stores. A study conducted by UPS.com reveals that the same percentage of online shoppers check the return policy before making a purchase. To reduce your online store's return rate, make sure you have a clear and flexible return policy that outlines the terms and conditions, timeframe, methods, and fees for returning items. Communicate your return policy clearly on your website, in confirmation emails, and on packaging materials. Also, offer multiple ways for customers to initiate and complete a return, such as online forms, phone calls, emails, or chatbots.
4. Analyze Feedback (Even Negative Feedback)
To reduce your online store's return rate, you need to collect and analyze customer feedback. This is the only way to identify and address their issues or dissatisfactions. Fortunately, there are numerous channels from which you can collect data: surveys, reviews, ratings, comments posted on social media channels, or interactions with customer service colleagues. And a tool like Google Analytics will help you measure key indicators: conversion rate, bounce rate, cart abandonment rate, or repeat purchase rate. This way, you will constantly improve the quality perceived by your customers.
5. Reward Loyal Customers and Encourage Repeat Purchases
Nothing motivates customers to buy more and return less than a reward. This way, you reward loyal customers and incentivize occasional ones. You can use loyalty programs, referral programs, discounts, coupons, free gifts, or contests to show your appreciation and recognition toward your customers. By reducing the return rate, you can increase customer retention and loyalty for your online store.
Conclusion
The five methods mentioned above are just a few tips for controlling this unpleasant phenomenon that your online store may face. We all know that returns are inevitable in the e-commerce sector, but they should not overwhelm your business from a logistical and financial standpoint. That is why it is important to respond to your customers' needs, especially since this rate, correlated with analytics about customer interactions, can provide insights into how profitable your business is and what you can do to grow it.