Refunds can cost retailers billions in lost revenue every year, which is why many online stores are trying to maximize the conversion of returns into exchanges. Many customers would prefer to exchange their purchase, but won’t bother if the process is too much hassle. Learn more about how a simple return process is key to your business in the Future of Shopper Experience Luckily, Shopify stores can take advantage of the ecommerce platform’s services and integrations, to make exchanges a pain-free experience for their customers. In this blog, we’ll cover: Why exchanges are better for the bottom line The basics of initiating an exchange on Shopify How to upgrade the exchange process with Loop Let’s start by understanding why ecommerce websites may want to consider investing in exchange support. Why exchanges are better for the bottom line Ecommerce businesses experience a much higher return rate than their in-store counterparts, which isn’t surprising: customers are less likely to know exactly what they’re getting from a Shopify business, if they’ve only seen a picture of the product online. Potential buyers are aware that there might be an issue with their ecommerce purchase, which is why a flexible returns policy is so important to give them the confidence to check out. Entrepreneurs entering the retail space should be aware of this and adjust their strategy accordingly. Yet even when the returns experience is smooth, a refund will still cut into the retailer’s profit margin—especially when this happens again and again. By converting a straight return into an exchange, store owners can protect their sale and keep their customers happy. Some shoppers will even be convinced to spend more on an upgraded product, which is known as an upsell. By offering a replacement item at the point of return, online businesses can avoid processing a refund and the customer can avoid having to manually make a second purchase. This impact isn’t limited to the individual sale. If they aren’t given the opportunity to make an exchange, there is the risk of the shopper buying a replacement from a competitor and sticking with that other vendor long-term. Meanwhile, a customer who has been treated well by the ecommerce store and its support team is more likely to return to that store in the future, significantly increasing their customer lifetime value. This is why it’s so critical for Shopify business owners to take advantage of the platform’s features and plugins. How to initiate an exchange on Shopify The exchange function is readily available for Shopify websites, within the POS app. Under the order management section, retailers can select the order they’re working on and then choose the “Exchange” option. This will prompt the merchant to identify the specific item or items that are being returned. At this stage, it will be possible to select a replacement item from the online business’ product list, so that all inventory management is up to date. Shopify supports the function to select various quantities of items or mark the product as “unfulfilled,” if an item is out of stock. This will trigger a separate order and allow the replacement(s) to be shipped at a later date, when available. If a replacement item is a different price than the original order, the online store can then either refund the remaining amount or collect the additional amount, seamlessly within the Shopify ecommerce platform. This is the most basic form of Shopify exchange functionality, as it still requires the merchant to manually organize the inventory through the POS system. In order to input this request, the customer must have already submitted the request either digitally or by hand; they then have to wait for the return to process. In many cases, this return may have been submitted on a paper form enclosed in the return shipment, which can take days to be received and processed. Delays like this can cut into the profit margin as it makes re-merchandising more difficult, especially if a retailer does their due diligence to first inspect the return on its quality and eligibility for resale. This is when a merchant may want to upgrade their returns experience and partner with a support team or service provider like returns management solution Loop. Upgrading the exchange process with Loop Many customers may not be sure if they want to return the product or exchange it for a new one in the right size, color or style that they wanted. Giant retailers like Amazon may be able to eat the cost of an unnecessary refund, but most smaller Shopify stores will want to optimize their returns process for exchanges. This is where Loop can have a highly valuable impact for retailers of any business type. Integrating with Loop allows merchants to launch an easily accessible returns portal, with a customizable workflow that only asks the questions that the retailer wants answered. Customers can quickly navigate through this journey and select either an automatic exchange, upsell or store credit—all of which avoid the dreaded refund process. Because they are doing everything digitally, exchanges can be triggered right then and there. They don’t need to wait for the retailer to receive their return package. Adding Loop to the Shopify exchange process lightly nudges shoppers away from a straight refund and towards the exchange option. By suggesting relevant product recommendations and making the process as streamlined as possible, retailers can make the exchange work for them and protect their bottom line. Loop is readily available as an integration in the Shopify app store. Get a demo to learn how to streamline your exchange process and retain more revenue.
