Business Owner

Online retailers: Rethink your returns strategy


A customer-friendly approach can give your business a competitive edge.

In retail, returns come with the territory. Everything from ill-fitting clothing to unwanted gifts to glitch-laden gadgets are potential reasons for customers to reject what they've bought. For online retailers, however, these problems are typically magnified. Their return rates tend to run three times higher than brick-and-mortar retailers, according to a 2013 Kurt Salmon report.

"It's essential to get returns right, and make the process as easy as possible for consumers." – Jim Brill, UPS reverse logistics marketing manager.

What's more, these returns can put a substantial dent in a business's bottom line if the policy isn't developed with customers in mind. According to Jim Brill, UPS reverse logistics marketing manager, studies have shown that the expense of returns processing ranges from 20 to 65 percent of the cost of goods sold. 

"It's essential to get returns right, and make the process as easy as possible for consumers," he says.

Does your website measure up?

Building on the 2015 UPS Pulse of the Online ShopperTM study, Brill and his reverse logistics team recently analyzed the Top 500 U.S. retailers' websites to see how they measure up to customer preferences. See "Rethinking Online Returns."

"We looked at both the policy and the mechanics of making a return. Some of the sites match up well with what the customers are asking for, while others show wide gaps between what customers want and retailers provide," he says.

For example, the Pulse study found that 88 percent of online shoppers reviewed a retailer's returns policy, and 67 percent did so before purchasing anything. Just over 15 percent said they abandoned their shopping cart if a return policy was not clear to them.

"Our analysis shows that 66 percent of retailers provide clear and understandable return policies," Brill says. But that means one-third of retailers have return policies that are difficult to comprehend – and could be cutting into sales.

"You go to some sites and there's literally nothing there, or a short little paragraph, with no details at all," he says. "In other cases, we found some that go way overboard, with five pages of information, multiple links within the pages, and you get lost in a lot of verbiage."

Brill's recommendation: Keep your returns policy simple, short and to the point. Put it in a customer-friendly tone, minus the legalese.

"We also found some policies that were very shipper-centric, meaning 'we will only do this' or 'we will only cover that,'" he says. Brill believes customers having a purchase experience that requires a return already casts businesses in an unfavorable light, so aggressively positioning your policy defensively can make an already tense and unpleasant experience even worse.

When it comes to access and support, most online retailers provide return-specific links on the home page that make the returns policy easy to find, but a best-practice recommendation from the study is to place links in the shopping cart, shipping or customer service sections as well.

"You want to make the returns policy as accessible as possible, so people don't have to back out to find it," Brill says.

Make returning a better customer experience

"A lot of retailers we looked at claim they have a 'hassle-free' returns process, but when you get into it, they're not walking the walk," Brill says. "But these days, the online shopper is in control and it is so easy for them to toggle back and forth between competitors. An online seller needs to streamline the process to keep the customer happy and coming back."

Here's where some online retailers fall short of customer expectations: 52 percent of customers in the Pulse survey said including a return label in the box was a key element of a good returns experience. Yet, the "Rethinking Online Returns" study showed that only 14 percent provided a prepaid label in the box.

"Some shippers provide the ability to print a return label on their website, to save a step in the shipping process," Brill says. "It's an automated approach that saves time in the shipping department and enables better data collection about return merchandise, but one that requires the consumer to take a couple more steps, and may affect the customer experience."

The Pulse study found that 82 percent of online shoppers said they would complete a purchase online if they could return the product for free in-store or with a prepaid label. Yet only 32 percent of the Top 500 retailers offer some form of omnichannel or store-based return.

"Most omnichannel retailers are missing an opportunity to drive customer satisfaction and additional sales by not suggesting a return-to-store option," Brill says.

The simplest fix that nearly any online retailer can implement is to start printing return labels and putting them in the outbound shipment, Brill says.

"You just click the return label box in the UPS system and it reverses the ship-to, ship-from. A lot of companies don't do that, they make you call in, which adds to the hassle factor," he says.

Another way online retailers can boost their returns policy? Provide a link to® so customers can track their return shipment's progress.

"That can be very important, especially with high-value returns," Brill says. "You can also provide customers with a link to Global Locator on so they can find the nearest The UPS Access PointTM or drop box."

Some of the more progressive sites go even further, issuing credit as soon as they see the package is moving through the UPS system.

"They use the tracking detail to issue the consumer a credit right away, and send an e-mail or text message to the customer when the return is processed or the credit is applied."

Learn more about UPS Returns® solutions.


Reader Comments

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Jacquelyn C. Moore
Providing the return label is wonderful, economic and timesaving. I do online shopping because I have a problem with walking too far. I have everything delivered that I can, and I am one that returns very little of what I buy. I even have all my food delivered from different stores. But families need return labels because sometimes things just don't fit right.
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