When you have an ecommerce shop, it’s a strong competitive advantage to have a generous return policy in place. But that doesn’t mean you should ignore return abuse and fraudulent returns.
In this blog, we’ll cover:
- What is return abuse?
- Setting a clear ecommerce return policy
- Designing a strong return policy to discourage return abuse
- When to process returns for fraud prevention
- Using automated returns management to fight return abuse
What is return abuse?
In a nutshell, return abuse can describe any kind of fraudulent returns that your shoppers make. This term can apply to shoppers who package up a rock in a box with your return label and send it back for a refund, or to folks who buy clothing to wear it once with the tags on and then return it, and more.
Essentially, anybody who tries to use your returns process to make a quick buck or to deceitfully take advantage of your products is guilty of return abuse. The good news is that return abuse is less common than you think, and stopping fraudulent returns is easier than you think. All you need is a good return policy.
Setting a clear ecommerce return policy
The key to ensuring that shoppers respect your store’s refund policy is setting clear guidelines for what can and can’t be returned, and under what conditions. Of course, you also need to design your return policy for the betterment of
Shoppers say that free shipping (96%) and free returns are important factors when deciding which online retailer to buy an item from.
See how building a clear, generous return policy is part of The Future of Shopper Experience.
A lengthy return period is important too. Retailers found that while offering a more generous returns window was associated with more returns—but importantly, it was even more strongly associated with an increase in future purchases. By ensuring that shoppers can feel confident in your refund policy, you’ll be able to win their confidence and brand loyalty.
Designing a strong return policy to discourage return abuse
It’s true, a small amount of shoppers do abuse return policies. While return abuse does happen, it’s less common than you probably think. Only about 5% of all returns are fraudulent.
You may not be able to prevent it entirely, but you can ensure that your return policy only allows for clothing items that still have their original tags and are in new condition—enabling you to resell the returned merchandise. And make sure that you have clear limitations on items that can’t be returned, such as final sale items.
If you sell large and expensive-to-ship items like furniture, your return conditions may include restocking fees, ensuring that shoppers can return the item if they don’t like it, but that they need to choose carefully before making a purchase.
And, if certain customers are serial returners, you may consider banning them from returning future purchases, though you might enable them to make an exchange instead.
So don’t try to come up with a strict ecommerce return policy to thwart return abuse—it will only serve to alienate your loyal customers and lead them towards your competitors. Instead, focus on building a generous and flexible return process with set conditions to monitor whether an item is eligible for a return or refund. By automating this process with Loop, you’ll be able to easily guide your shoppers through a seamless workflow that makes it easy to confirm whether their items are eligible for a refund, so that they don’t unintentionally abuse your policies.
When to process returns for fraud prevention
While it might be in the shopper’s interest to see the refund come in as soon as they’ve made the request, they may forget to ever send the item back, or simply decide to keep it or resell it independently. Or, if the item does come back, it may not be in the condition that the shopper represented it as.
To make sure your returned items meet your conditions for a full refund, consider waiting to process the refund request until the items are returned to your warehouse and inspected. If the items don’t meet the required conditions, you can opt to offer the shopper store credit rather than processing a refund.
Using automated returns management to fight return abuse
Rather than wasting your customer support agents’ time on trying to determine whether a shopper is entitled to a refund or not, you can easily automate the process using a returns management solution like Loop, which integrates directly with your Shopify store.
With Loop, shoppers can access a self-service returns portal that pulls up the items they’ve purchased and allows them to choose which return-eligible item they’d like a refund on. If an item is not eligible for a refund, whether it’s past the refund eligibility window or it’s in a category in which refunds aren’t allowed, the item will be blocked from the system.
Read more: A guide to optimizing your returns costs
If the item they want to return is within the eligibility window, you can set up a workflow that asks shoppers a series of questions about the item. For example, if the shopper is returning a swimsuit, “Is the item in new, unworn condition with the hygiene strip intact?” If the shopper has already worn the item in public, it will be disqualified for a return.
By using conditional logic rules to set conditions for returns and refunds, you can ensure that shoppers are aware of limitations before you issue them a return label. By the time they send the item back, you should have received verification that the item is in return-eligible condition—and if it’s not, you aren’t obligated to honor the request.
Automating your return process with clear workflows enables your brand to reduce the number of returns that don’t meet your conditions and filter out potential return abuse. It can also help you transform many of your returns into exchanges, through incentivizing exchanges with real-time inventory suggestions and store credit offers.
Want to build an ecommerce return policy that cuts return abuse and boosts retention?