A common hurdle to building a more profitable eCommerce business is damaged, broken, or unwanted goods that get returned to your warehouse by your customers.
For most brick-and-mortar businesses, this is not a major issue:
When a customer wants to return a product, they can go back to the store with the product, packaging and receipt in hand and get their money back.
But it’s more complicated with online retailers, as they have to figure out how to handle return shipping, exchanges, inventory tracking, unhappy or impatient customers, and so on.
Handling returns can also be straining financially. This is why you need to identify a commercially viable returns solution that allows you to stay in business and continue to offer an excellent service experience for your shoppers.
Here are several more reasons why you need to find an elegant solution for returns:
Impatient or Unhappy Customers
When you don’t have a pre-established system for handling returns and exchanges, you’re going to create impatient customers.
They expect you to have your processes sorted out, because although they decided to buy through your store, for whatever reason, they’re unhappy with their purchase, and want you to handle it.
Getting return business is going to prove to be an uphill battle–once your customers don’t see you as being reliable and trustworthy. You have to take some time to determine the lifetime value of your customers, because when you can keep them coming back, the expense you incur if products are returned will often pale in comparison.
You’re going to get some returns – it’s not a matter of if but when. If your solution isn’t commercially viable, your profit is definitely going to suffer.
A Blanket “No-Returns” Policy Won’t Scalable
Do you have plans of expanding your business – perhaps even into international markets?
Building your brand and reputation is hard enough as it is.
A no-returns policy could be effective while your business is still small, but as you grow, your customers are going to expect more from you.
One of the major reasons people shop online is because of convenience. They don’t have to leave home to place an order, and a greater selection of products is right at their fingertips in contrast to the local mall.
Although you may not be able to accept all returns, blanket policies that raise red flags with customers should be avoided. A good intermediary solution is to offer an “exchange-only” policy.
Returns can affect your bottom line:
Although it’s hard to know whether you or your customer should pay for the return shipping – this has been an area of contention for online retailers for a long time – in the long run you can’t expect your customers to shoulder all the costs.
A good returns policy falls under the heading of “good customer service” in the mind of your shoppers. No more, no less.
This would suggest that your policy needs to use simple language and be clearly marked, so your website visitors don’t have to hunt around for it.
Regardless, if your returns solution is predictable, you can factor it into your budget and not have to worry about overextending yourself financially. But if you don’t have a plan, or if your solution costs you every time you use it, you’ll have a harder time nailing down your expenses related to returns from one month to the next.
First, create a returns policy that makes the most sense for your business. Also keep in mind that you may have to change it down the line depending on customer demands.
Then, identify a system, tool, app, or service that helps you streamline returns and exchanges. Look for a solution that’s predictable and consistent to avoid unexpected costs and poor service.
Give your customers a reason to keep coming back. Their loyalty can be earned by going above and beyond the call of duty.