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5 ways: Transform your returns policy for business success

Here’s how to develop an effective, customer-friendly process.

Returns options and convenience matter greatly to consumers, a study shows.

There's no question that poorly handled returns can drain sales revenue. But a lenient and easy-to-understand process is increasingly important to winning the battle for online retail consumers, says a March 2012 comScore Online Customer Experience Study commissioned by UPS.

In the study, 48 percent of consumers surveyed said they would revisit a retailer that had a clear, easy and upfront returns policy. "This new study shows that a good returns experience leads to repeat customers and improved recommendations," says David Sisco, UPS retail marketing director. "That can certainly set you apart from the competition."

Here's how to use returns to win more business:

1. Address customer pain points. "Understand what your customers want and respond to that," says Melanie Alavi, a UPS retail marketing manager. "For example, just over 60 percent of shoppers want a return label in the box, or alternatively, a label that's easy to print from the retailer's website." According to the comScore study, 63 percent of online shoppers said they looked at the returns policy before making a purchase. And what's more, 35 percent would drop a retailer with a returns policy that's restrictive or difficult to figure out.

The study revealed that having to pay for return shipping, restocking fees and waiting too long for a credit or a refund ranked No. 1, 2 and 3 in terms of painful online experiences. Notably, 27 percent said they could not reach a customer service representative for help with these issues.

So, to sum it up:

  • Include a returns label in the shipment or offer an easy way to print one from your website.
  • Refund or credit promptly when items arrive back to you.
  • Consider whether or not the customer should pay for return shipping and a restocking fee.

UPS Returns® can help you ship items with preprinted labels, integrate returns processing into your website and automate certain parts of your returns process.

2. See how your returns policy stacks up. You know what your customers want. Now see how your returns process compares with that of your competitors.

"Go to competitors' websites to see how easy it is to find their return policy, what it contains and how they promote it," Sisco says. Then take steps to make your returns as easy and hassle-free as possible."

3. Offer multiple return channels. "Retail shoppers seem to want what marketers call an 'omni-channel experience,' which translates to buying something online and returning it to a local store if that's more convenient for them," Alavi says. In the comScore study, 38 percent of shoppers said returning items to a nearby brick-and-mortar store amounted to a positive returns experience, and 30 percent valued flexibility in the method of shipping returns back to the retailer.

4. Identify upfront why something is being returned so you can process it quickly and get it back on the market. "Know whether the product is damaged or defective, or just something that was the wrong color or size that can be resold," Sisco says. With UPS Returns, a code identifying the reason can be added to the label customers print from your website.

5. Outline clear business rules for the way returns are handled. "It's best for a cross-functional team to address returns issues," Alavi says. If your brand has both online shopping and physical stores, decide what happens when a shopper buys something online but returns it to a store. Will the store restock it or send it to a distribution center? "Store operations need to be a part of that conversation," Alavi says. "If your business doesn't have a brick-and-mortar store, you still need to figure out if everything will go back to one distribution center or to different back-end routing for different products."

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