As we approach peak holiday shopping season—the window of time between Black Friday and Christmas—retailers know that a high sales volume will soon be followed with a high return volume.

Many of the returns are likely to be gifts that the recipient doesn’t want or doesn’t need. And while a high return rate can be frustrating, retailers can also take the opportunity to leverage gift returns as a way to grow their connection with the customer and help them find other alternatives from their shop.

In this article, we’ll discuss:

  • How to build a custom return policy for holiday gifts
  • Optimizing your return process
  • How to convert customers who return gifts into loyal advocates

How to build a custom return policy for holiday gifts

As a retailer, you most likely already have a return policy with a set of common guidelines. It should cover elements such as the length of your return window, whether the item must be in its original condition, and whether proof of purchase is required.

For holiday purchases, however, it may be worth bending the rules. If the customer displays a gift receipt along with their unwanted gift, you might consider offering an extended window for returns—after all, if their gift giver purchased the item on Black Friday and the gift recipient didn’t open it until Christmas, they’re likely already out of a standard 30-day returns window by the time they’ve even unwrapped the gift.

You might open up a longer return window (say 45 days) only to gift recipients who have a gift receipt, but you may also want to consider offering the extended window to every customer who had purchased products within the holiday shopping window, whether or not they can demonstrate that the product was a gift—after all, customers can easily request a gift receipt even if they intend to keep the item for themselves.

It’s also worth thinking about what to do if a customer doesn’t have a gift receipt or any proof of purchase at all. In this case, if you can tell that the item is authentic and in its original condition, you might consider offering a gift card that the customer can use towards another item from your store, rather than offering a full refund. This strategy can help you counteract potential fraud, with the added benefit of encouraging customers to explore your other product offerings to build long-term loyalty.

Optimizing your return process

The post-holiday season is a busy period for returns, so it’s important to streamline your return process as much as possible to minimize its drain on your resources and improve the customer experience.

To that end, leverage best-in-class returns management technology to help you create a fast, self-service return process for your customers. Using a platform like Loop, you can set up seamless workflows that walk customers through the process of returning items, including special conditions that may be unique to holiday gifts. You can give customers the option to either bring the item to a drop-off center without repackaging (which can be helpful, as they may no longer have the original packaging), or to use a printable return label to mail the package back themselves, depending on their preferences.

It’s also important to calculate whether it’s worth accepting an unwanted gift as a return to your warehouse—after all, over 9.5 billion pounds of returns end up in landfills each year. Before requesting that the shopper return the product, set up conditions to automatically calculate whether the return can be resold for a profit, based on factors such as shipping cost and whether it’s a seasonal product. If the item is not likely to be resold from your store, you can offer alternatives, such as shipping the product to a reseller or a donation center, or allowing the shopper to keep the item while receiving a full refund for its purchase price.

How to convert shoppers who return gifts into loyal advocates

Using a return management solution like Loop also gives you the tools to incentivize shoppers to choose product exchanges over requesting a full refund. Encouraging shoppers to exchange an unwanted gift for a product that they want will give them a second chance to fall in love with your brand, and may lead to a new long-term customer relationship. Particularly if a shopper has never purchased any of your products in the past, it’s critical to guide them toward gift cards or store credit rather than requesting a refund. By offering them a small amount of “bonus credit” that they can put towards the purchase of a different item, customers will be more likely to choose an exchange or credit over a refund. Additionally, the bonus credit offer can lead to upsells, helping you generate extra revenue from purchases that would have otherwise turned into a net zero refund.

The value of converting returns into exchanges goes beyond the individual transaction—by optimizing for exchanges, you’ll be able to recapture interest in your products from shoppers who would have otherwise churned, leading to lower acquisition costs, higher retention, and more referrals from happy customers.

When it’s the season of returning gifts, make sure you’re turning unhappy gift recipients into excited shoppers. Learn how Loop can help you convert returns into additional revenue and long-term customers—get a demo today.