Returns may not be the goal, but they also don’t automatically mean a negative customer experience. Shoppers are frequently choosing their online merchant based on their returns policy. They know they may need to make a return, and that’s fine with them, as long as the experience is a smooth one.
You may have been handling your returns manually, but as your sales grow so will the number of returns. It’s unlikely your manual process can scale effectively. Learning how to streamline your returns process is not just an opportunity to cut down on resource expenditure. It’s also a chance to upgrade the shopper experience, improve your shopper relationships, and generate more customer lifetime value.
Learn more about why returns matter to your shoppers in The Future of Shopper Experience.
Why is streamlining the returns journey so important?
Returns can quickly become a drain on your business if you don’t have a well-organized system in place. Processing refunds and re-merchandising items can use up hours of valuable employee time. Then there’s the physical cost. Damaged items may require repairs before they can be sold, if they can be sold at all. When a product is returned after it has already been removed from the shelves, then you just have to take that loss. The National Retail Federation estimates that returns accounted for over $400 billion in lost sales for U.S. retailers in 2020.
Of course it’s not only the merchant experience that can suffer from a poor returns system. When the burden is placed on the shopper to repackage the item, coordinate shipping and follow up about a refund or exchange, they inevitably get turned off from the brand itself. In fact, a recent Loop survey found that 45% of shoppers would rather eat the cost of an unwanted item under $50 than engage with a “confusing or time-intensive returns process.”
These bad experiences can have a more substantial impact than just feeling bad in the moment. Shoppers are vocal about the long-term effects of a bad returns experience. That same Loop research found that over half of shoppers (57%) would abandon a brand after a single poor post-purchase experience. Repeat shoppers can be a business’s most valuable audience over time, so reducing the risk of churn should be a priority for all merchants.
Building a streamlined returns process
You may have had a manual system that worked for years, but now that your business is growing, you find yourself overwhelmed by higher volumes of returns. Or maybe your returns process is functioning just fine, but you recognize that there’s an opportunity to improve the customer experience and benefit your bottom line at the same time.
Whichever angle you’re coming from, building a streamlined returns process involves a few simple—but critical—steps.
Step 1: Reduce the volume of returns you’re processing
Your first task should be to try and reduce the volume of returns in the first place, by making small tweaks to your online storefront.
Some returns are unavoidable, but others can be stopped at the source by better educating the shopper on the product they’re considering. Clear sizing guides, honest reviews, and a variety of well-lit photos can all help your shoppers make more informed decisions. An accurate description is also more important than you may think. Power Reviews research found that 49% of shoppers returned an item for not matching the product description, second only to an item not fitting (70%) or being defective (65%).
Identify which product pages most need editing by analyzing trends in your returns data. Ask your shoppers why they’re returning an item and periodically review which products keep coming up. That way, you can target the most critical descriptions and maximize your impact.
The next level would be to use the latest technology for more detailed sizing information, such as fit comparisons to other brands or even augmented reality tools, so that customers can see what an item might look like “on.”
Step 2: Leverage AI for easy, fast customer service
Sometimes, shoppers will still have questions before they click through to checkout, whether that’s about the product, the returns policy or any number of things. Navigating away from the product page can be risky, as shoppers may not end up converting once they’ve left.
This is when a chatbot can play a really useful role, sharing key information with your store’s visitors without them needing to exit their shopping screen. Shoppers can just type in a question and get an instant answer, with no need for a human agent! If the query is a bit more complex, the chatbot can share a direct link to the relevant page of information, ensuring that the shopper doesn’t get frustrated searching across your website.
And don’t stop there. Chatbots aren’t just a database of your store’s information. They can also help capture important shopper details that you can use to improve the experience. Set up an automated series of questions to gauge their style and offer product recommendations. Then, have your chatbot ask the shopper for their contact information, so that you can keep in touch and follow up about items they browsed but didn’t buy.
A more informed shopper is less likely to return an item, but you can also leverage chatbots for the returns conversation, too. Equip your chatbot to detail the steps of your returns policy and even ask for the reason for the return, which you can use to help inform Step 1.
Step 3: Make sure shipping is easy and accessible
One of the most important components of a streamlined returns process is the shipping itself. Shoppers regularly report that free shipping is a priority, but not all merchants are delivering. Invesp reports that 79% of shoppers want free returns shipping, but only 49% of retailers offer it. While the upfront costs may be intimidating, this service can pay dividends in the future by making the shopper’s experience easier and making them more likely to return to your store. Including a free returns label in every shipment may not be feasible for your brand, in which case it’s important to make sure labels are easily generated and printed at home. Convenience and accessibility are key!
Another element of shipping is the method of return. Do you allow your shoppers to drop off their items in-store or at a convenient pick-up location? Must the shopper take the item to their local post office or can they schedule a home pick-up? Providing a variety of channels allows each shopper to choose the right option for them, which endears them to your brand because you’re demonstrating that you care about their preferences. It’s also convenient for you as they are more likely to return their item promptly, enabling you to get it back on the shelves quickly.
Step 4: Embrace communication through automation
Keeping track of the status of the return can be a pain for both merchant and customer, particularly when the package is being shipped or handled by an external carrier and you don’t have eyes on the product.
Instead, embrace returns management solutions like Loop and their automated messaging systems. Eliminate the uncertainty of the returns process—has the shopper mailed the item yet? Do they know they only have 5 days left in the returns window?—by setting up automated notifications that are triggered at key points in the returns journey.
Shoppers will appreciate being informed how long their return label is valid for, or being updated when their refund has been processed. And your team will enjoy being freed up from the manual task of sending out emails or texts, so that they can focus on more complex tasks. These automations can also be customized to be sent at particular moments, depending on the nature of your business or your specific returns protocol.
This form of tracking and communicating is also really valuable should something go wrong. If a product is misplaced during the return shipment, a well-documented journey can help support any shopper claims and verify important activity. This is critical for shoppers to feel heard and supported during a customer service interaction.
Bonus: Consider a third-party solution for added services
If you’ve followed Steps 1 through 4, you likely have a well-oiled returns machine on your hands. But there’s always room to optimize a little bit more. Once you have the basics down pat, it’s time to consider how to upgrade the returns process and offer value-added services to your shoppers.
Partnering with an experienced returns management solution will give you several features you can integrate seamlessly into your ecommerce storefront. For instance, Loop’s RMS builds in the option to exchange an item within the standard workflow, rather than after a return has been received. This allows the shopper to get their replacement quickly and minimizes the negative impact of a return.
You could also offer a refund in the form of immediate store credit, if the shopper makes an exchange right away. This reduces the revenue loss of a standard return. It can even lead to the shopper choosing a higher value item, a technique known as upselling. The shopper feels like they upgraded, while you sell a more expensive product. It’s a win-win!
Ready to optimize your returns management process? Get in touch for a Loop demo.