Return Strategy

How to reduce returns in ecommerce: 10 rules

Wondering how to reduce returns in ecommerce? Here are 10 rules that will help you reduce customer returns & retain revenue for your brand - all at once!

Want to know how to reduce customer returns? Follow the rules.

Hi, we're Loop. We make returns automation software for Shopify brands. Part of that includes a fair amount of consulting where our teams advise online retail stores on reducing returns directly.

So naturally, we have some go-to rules that we encourage all our merchants to follow. Even if you don't use our returns automation solution, your brand can still get immediate results by following these tips.

In our minds, returns are a huge part of the post-purchase customer journey. Of course, it's always nice to lead with proof. So I went looking and I stumbled upon the most amazing quote from marketing expert Bryan Eisenberg:

“For you to achieve your goals, visitors must first achieve theirs”

If we're thinking about returns, that's pretty much a direct hit 🎯 Without fail, all of our advice filters back to the above axiom. So without further ado, here are 10 rules to answer the question: how to reduce return rate?

  1. Set your returns benchmark

  2. Use a returns management solution

  3. Create a winning return policy

  4. Nudge customers toward exchanges

  5. Focus on packaging & unboxing experiences

  6. Nail your post-purchase emails

  7. Accurate sizing always wins

  8. Customer support & customer service

  9. Quality Control for lower returns

  10. Accurate product descriptions

If you are running an ecommerce business, you must have touched on the above items before. Even if you are one of those brick and mortar hold-outs, you'll be familiar with most of the above as well.

Mastering these rules is bound to reduce the number of returns you receive. Not only that, but it will help you convert returned items into product exchanges - helping to keep revenue in your ecommerce store while solving a problem for the customer.

All set? Let's learn how to reduce sales returns & retain customers all at once.

1. Set your returns benchmark numbers

First, let's get realistic about setting a target return rate that makes sense for your vertical. Everybody wants to reduce returns as much as possible. But if you're a clothing brand, your target will look very different than a home goods brand, for example.

How different? I'm glad you asked! The average return rate for apparel brands is around 20%:

And the average return rate for home goods brands? That's around 10%:

And of course, brand size matters too:

How does your brand stack up? Is the problem worse (or better) than you thought? For a deep dive on returns stats, check out our Ecommerce Benchmark Report.

We pulled data from 300+ brands using our returns solution Loop. By looking at their performance based on 2 million+ returns, we came up with some very solid reference data to help you set realistic targets.

One more thing: seasonality. If you happen to measure your returns during the holiday season, you'd probably get much higher numbers. That's because returns increase an average of 31% during what we're calling Ecommerce Returns Season.

Guess what? We wrote a report on returns season too. Click below to learn more.

Returns Season is coming... Is your brand ready for 31% more returns?

2. Use a returns management solution

Software is used to run the entire ecommerce experience. It definitely doesn't stop at returns. If you've been involved in the online shopping business at all, you'll probably know how much of a hassle it is to handle the returns process.

So if processing returns is a pain, why not automate it like everything else. Shyeah - we agree!

With post-purchase software like Loop, you can make Shopify returns happen automatically. We've created a piece of software that plugs into Shopify directly. Not only that, it plugs into your 3PL & marketing stack too.

With Loop, you'll get an always-on returns portal where customers can return items without the added fun of 3 - 6 emails sent back and forth with a customer service team. The portal can be set up to follow your return policy automatically.

The only thing for brands to do is to follow returns best practices when they write their policy. All the emails and customer communication is on autopilot. With millions of returns processed, Loop is in a confident spot.

Learn More: How Loop Works

3. Create a winning return policy

We've said it before, we'll say it again: your return policy is a marketing asset. But it's also a key tool to reduce returns.

Why? Because you can clearly set expectations here. A well-written return policy can attract the right customers, and discourage the ones who might return more often. The net result of a winning return policy can easily be: reduce product returns & increase sales.

We've got data that suggests over 60% of first-time customers check return policies before buying. Here's a thought, that 60%? They're the kind of people who do research and make sure they are buying something they don't need to return.

This kind of flies in the face of what might seem like conventional wisdom: if you want to reduce returns, tell customers what they can't do. But in reality, that will only discourage people from buying.

Don't believe us? Check out one of the biggest brands on Shopify: Baseballism.

With a completely open return window, Baseballism has built a strategy to promotes customer happiness & product exchanges. The result is a big win for everyone.

Listen to our founder Jonatan Poma dig deep into returns strategy in this epic pod:

4. Nudge customers toward exchanges

If you want to keep your online shoppers happy, give them options. Here's a big one that will bring smiles and go miles for your brand: exchanges.

Now, if you're a loop user, you'll already know that we have a special place in our hearts for product exchanges. The first and most obvious reason: an exchange is not a return.

But another big reason exchanges will help is that they retain revenue for your brand. They also keep your customers engaged with your brand for a longer time - at least until they receive their new items after an exchange.

That vital period gives your brand more time to win customers over during the post-purchase evaluation period. Keep customer satisfaction high at this stage, and you'll likely have repeat business with them.

Loop: The Exchange-First Platform for Returns

5. Focus on packaging & unboxing experiences

Nothing says "meh" like receiving something in a see-through plastic bag. And maybe that unenthusiastic feeling will carry over to the product... and then? Maybe increased returns.

Just listen to our friend & unboxing mystic Phillip Akhzar from ARKA as he talks about the many ways packaging and unboxing experiences can impact returns.

A properly executed & dazzling unboxing experience can act as a bridge between the customer's anticipation and the experience of using their new product. It's a way to keep customers engaged and happy with your brand. And maybe a little less prone to returning products as a result.

Also, remember that packaging is another way to communicate with customers. For example, you could include a piece of cardstock with a QR code on it that says, "Not happy? Let's exchange it for something different".

Then the customer can scan the QR code, and go to your returns website. If you use Loop, that would be your exchange-first optimized returns portal. No big deal. 🤓

Read More: What makes a great unboxing experience?

6. Nail your post-purchase emails

Want to reduce returns with email? That's a great idea.

Chances are you are already sending customers transactional emails with shipping info & delivery estimates. But what else could you be sending to help reduce returns?

Here are some ideas:

  • Tell customers how to they can use your product

  • Let customers know about your easy exchange policy

  • Get customers in the repeat-purchases frame of mind

All of the above emails focus on getting customers into a positive headspace when thinking about their purchases. Not only will you prevent post-purchase dissonance, but you'll also push people towards buying from you again.

Just be careful not to upsell too much during this time. Wait until customers have your product in hand for a while, then ask them for a review via email. After that, see how they respond to something more sales-inclined.

Read More: Post-Purchase Emails for Returns

7. Accurate sizing always wins

Fit is the biggest reason why products are returned. That's why more and more fashion brands are publishing sizing charts with detailed breakdowns of all the measurements customers need to know.

This one really is a no-brainer. When customers return their product due to sizing, it's also critical to ask for more info. With that kind of data, you could further dial in product issues and maybe make informed adjustments.

Read More: How to Prevent the Most Common Return Reasons

8. Customer support & customer service

Sometimes people return things for the wrong reasons... and they might not even know it. That's why an engaged customer support team could help reduce returns in real-time.

This could be as simple as setting up a live chat where customers can ask quick questions before engaging in a return. Depending on your products, this could end up saving a lot of headaches for everyone involved.

If there are commonly returned items, arm your team with the knowledge to re-convert customers before they get to the returns stage. It's all about creating a positive experience for the customer. Positive/happy customers return fewer products (and exchange more often).

Read More: Ecommerce returns best practices: Shipping Fees + More

9. Quality Control for lower returns

If you are paying attention to the margins of your ecommerce business, you know you can't skimp on quality control. This is a huge factor to consider for reducing returns as well.

Ask and you shall receive. Of course, that's made easier with the right software. You may have a returns survey sent via email. Or you may use Loop and ask customers painlessly on the spot.

With Loop, you can ask one question...

Then drill deeper with another question:

This data can be collected and analyzed over time to tell you exactly where your products are failing. Improve your products, reduce returns.

Read More: How Returns Data Improves Customer Experience

10. Accurate product descriptions

Unless you are running a French restaurant, vagueries are very much out of fashion. Today, clear, concise & fun product descriptions will win the hearts of customers.

And they'll also help reduce returns. Show & tell customers exactly what they are getting:

  • Use realistic models

  • Link to sizing charts

  • Talk about your return policy

  • Include multiple photos

  • Show product reviews

The perfect product description is always out of reach if you are constantly improving. Embrace this mindset and your efforts will be rewarded with reduced returns.

Wrapping up

Each other the above, while simple in concept, can take a long time to fully master. Make no mistake, now is the time to get started. Post-purchase is fast becoming the key differentiator that brands can use to set themselves apart.

Remember though, return rate is just one of a few key returns metrics brands should be tracking. That said, if you focus on improving the above, you'll be reducing returns in no time.

If you're a Shopify brand deadset on returns domination, we can help with that. Get in touch with us to book a demo - any time, any place (...on the internet). Despite all the Loop drops in this article, there are so many more mind-blowing features awaiting.

Grab a demo and get ready for this: 🤯

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