As your business grows, you’ve probably started considering ways to automate it to increase your staff productivity and improve your customer experience.

If you run your business on Shopify, the good news is that there are tons of apps at your disposal that can easily integrate with your ecommerce store, helping you with any business function you can think of – from product sourcing, to marketing, to SEO, to shipping, to analytics.

One function that’s a no-brainer for automation is your returns management. Depending on your industry, up to 40% of ecommerce sales may end in a return, and Shopify doesn’t offer a seamless native solution for processing returns. 

By using an app integration, you’ll be able to automate your entire returns process from end-to-end, providing a hassle-free customer experience – but, as with any new technology integration, you’re probably worried about how it will impact your bottom line.

Here are some guidelines for choosing a solution that will help you streamline your returns management while increasing revenue instead of losing money on complicated pricing formulas.

Watch out for add-on costs
Some returns solutions only offer a limited set of features within their standard pricing model, and you’ll need to pay extra every time you want to customize a return policy or add a new return shipping destination, for example.

Ensure your solution plays well with others
When you’re using an automated solution to manage your returns, it’s important that all of the returns data easily integrates with your other tools, including your Shopify ecommerce dashboard and your third-party accounting tools.

When using Loop, for example, you’ll be able to see all of your returns data within your Shopify dashboard, although if you’re processing an exchange or offering a gift card, you may need to complete reconciliation within your Shopify dashboard to ensure that all data is accurate. This article in our Help Center shows you how to do that easily. 

However, if you use a third-party accounting software that integrates with your Shopify data, you’ll likely be able to avoid reconciliation, as your finance tool should offer consistent reporting based on the type of transaction.

Next, let’s look at the financial benefits of using a returns management solution. 

Generate extra revenue through exchanges
Customer returns typically result in a loss of revenue – but with Loop’s proprietary platform, you’ll be able to increase your profit margins with optimized returns management.

Loop makes it a seamless process to encourage customers to transform a refund into an exchange.

When a customer requests a refund through Loop’s self-service platform, they’ll receive a questionnaire asking them to provide the reason they’re returning the item: Was it too big, too small, the wrong color?

Based on their response, Loop can automatically select relevant alternatives from your real-time inventory. If a customer said a dress was too large, for instance, the platform will recommend the same product in the next size down, enabling an instant product swap without requiring the customer to return to their shopping cart.

Loop can even incentivize exchanges by offering “bonus credit” for customers who choose to make an exchange or select store credit rather than requesting a refund. Doing so helps you maintain customer relationships that might otherwise terminate with a return, helping you extend your customer lifetime value.

In fact, these initiatives are so successful that Loop customers are able to retain an average of 40% of revenue on returns – providing a substantial ROI over the cost of the app’s monthly subscription.

Lower your labor costs
A streamlined returns management solution like Loop can also automate manual functions that reduce the amount of time your customer support team is spending on handling returns – enabling you to handle more tickets and more returns without growing your headcount.

Because customers can complete the entire returns process through a self-service portal, they won’t need to engage with a customer support rep except in special circumstances – helping you handle more tickets, and enabling customers to resolve their return or exchange requests efficiently.

When you consider the net benefits of investing in a returns management solution, you’ll see that choosing an app like Loop will pay for itself many times over in retained revenue and ongoing customer satisfaction. 

Want to learn more? Try out a demo.