Online shopping is at an all-time high. Unfortunately, so is the rate of returned items.
In 2021, online shoppers returned over 20.8% of all merchandise ordered, according to the National Retail Foundation. Added up across all ecommerce businesses, this means $761 billion of merchandise gets sold but doesn’t actually become revenue.
We’ll cover some of the top reasons for customer returns below but most of the reasons boil down to one thing: a poor customer experience. If customers feel misled, duped, or unsupported, they’ll quickly send back an item and take their business elsewhere.
In this post, we’ll share 10 actionable strategies (including tools and examples) to help you develop a return-proof customer experience.
The top reasons that customers return products
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No brand can completely eliminate returns, and that’s because customers return items for a wide variety of reasons — some of them outside of your control. The top reasons that customers choose to return products purchased via online shopping include:
- Item didn't match its product description and/or customer expectations
- Item arrived late and the customer no longer needs it
- "Wardrobing," defined as items returned by serial returners who never have any intention of actually keeping the products that they purchase
- Merchant shipped the wrong product
- Item was damaged or defective
When exploring how to reduce returns, examining these common reasons for online store returns and how they apply to your own business is an important place to start.
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Why reducing returns matters for most ecommerce stores
According to data from the National Retail Federation, U.S. consumers returned an estimated total of $761 billion in merchandise in 2021 alone. Thanks in part to supply chain challenges and rising prices, processing the return of a $50 product is now expected to cost ecommerce stores an average of $33 according to Axios.
The cost of having a high return rate goes far beyond lost profits. In addition to losing out on a sale, processing a returned product also means that you have to pay return shipping costs as well as any labor costs associated with your returns process, like assisting customers with returns and restocking returned products. When you consider the fact that ecommerce return rates can climb as high as 30% or higher, these expenses can quickly add up. This makes reducing your number of returns an essential goal for your ecommerce brand.
10 proven ways to minimize returns from your ecommerce customers
- Encourage product exchanges over product returns
- Provide in-depth and accurate product descriptions
- Display multiple high-quality product photos that offer context
- Leverage reviews of your product that assist other customers (especially as it relates to size and color)
- Optimize the accuracy and speed of fulfillment
- Don't skimp on packaging that protects your customer's product
- Develop a clear, proactive post-purchase experience
- Identify customers who abuse your return policy
- Expand the length of your return policy
- Use gift cards and loyalty points
Offering high-quality products is the first step to reducing your return rate, but great products are just the beginning. Below, read more about the 10 additional ways to boost your customer experience and reduce returns.
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1) Encourage product exchanges over product returns
Encouraging customers to exchange products rather than return them for a refund won't eliminate all of the expenses associated with processing a return. Even with exchanges, you still pay for return shipping and any labor costs associated with your returns process.
However, exchanging a product rather than refunding it does mean that you get to keep whatever profit margins you earn from the sale, which can sometimes be a big boost to your company's bottom line. Plus, you still have a chance to delight the customer with a product and hopefully build up loyalty from there.
How you go about encouraging exchanges is ultimately up to you. Some online stores only offer store credit for returns, and state in their return policy that they will not provide cash refunds. However, refusing to offer refunds altogether may yield a returns experience that leads to a lot of unhappy customers. Another option is to encourage product exchanges with carefully-crafted messaging or incentives, like an additional store credit.
Example of exchanges over returns
If you look at Jaxxon's FAQ page, you'll see the brand has a standard 14-day returns and exchange policy that allows customers to get a refund or new product for any reason. But Jaxxon uses Loop Returns as a self-service return portal, which has two major benefits:
- The portal is self-service, meaning customers can return or exchange an item without creating a ticket and waiting for an agent
- The portal gently guides users to request an exchange over a refund by giving bonus credit for exchanges and simplifying exchange shopping
Bonus credit is exactly what it sounds like: Customers can have more in-store credit than they would get as a refund in the original form of payment. This strategy is effective: Shopify stores that use Loop issue 15% fewer refunds than brands that don’t. As a result, Jaxxon rescues a sale and keeps the opportunity to delight the customer for greater customer retention.
Learn how the Gorgias + Loop integration unites your helpdesk and returns management software.
Jaxxon also uses live chat support on their returns portal page, which is yet another line of real-time defense against an avoidable return. If customers are considering a return, they may instead reach out to customer support to resolve whatever issues drove them to the page.
The customer service agent on the other end of the live chat might be able to fix the issue, especially if it came down to user error, and lead the customer to keep the item. Or, the live chat agent gives recommendations for products that won’t have the same issue to steer toward an exchange instead of a return.
Adding live chat to your returns portal is one of the revenue-generating tactics from our CX-Driven Growth Playbook, which is based on research of over 10,000+ top ecommerce brands. Check out the playbook for 17 more actionable tips to drive revenue by improving your CX.
2) Provide in-depth and accurate product descriptions
One of the biggest reasons why online purchases have a higher return rate than products purchased from brick-and-mortar stores is the fact that customers cannot examine products in person. This makes it much more likely for a customer who purchases a product online to end up returning their purchase due to it not meeting their expectations.
The best way to combat this is to make your product descriptions as in-depth and accurate as possible. When customers know exactly what to expect from the product they are purchasing, the odds of them being dissatisfied when it arrives are much lower.
This is especially true for apparel: size charts, size guides, and any other information to help the customer avoid buying the wrong size. Likewise, any sort of furniture must include clear dimensions, and any sort of technology must include detailed specifications.
Example of in-depth product descriptions
Marine Layer is one example of an online store that has in-depth product descriptions to minimize returns. To help customers choose the right clothing and accessories, Marine Layer offers details information in their product descriptions such as the exact dimensions of the item, the size of the model who is wearing it in the product images, and helpful size charts.
The brand uses tabs to include more information without making the page too long. Here’s the description for a pair of pants:
3) Display multiple high-quality product photos that offer context
Keeping with the theme of letting customers know exactly what they are getting, there is no element of your product description more important than your product images.
Along with using high-quality product images that display your products in the most appealing way possible, it is also a good idea to use product images that provide context about the product. For example, you may wish to display photos of your product in action to show its intended use. Or, you can show your product next to household items to give customers a better idea of the size and dimensions. Even better, you can include product videos to show the product in action.
By displaying multiple high-quality photos that offer context, you can ensure that there are no unwelcome surprises when your customer uses your product for the first time.
Example of contextual product photography
Native Union’s online store sells tech accessories such as charging cables and phone cases. They make use of multiple photos on each product description, including photos that display how the product is meant to be used. For example, the charging pad shown above clearly shows compatibility with iPhones, AirPods, and Apple Watches.
4) Leverage reviews of your product that assist other customers (especially as it relates to size and color)
Customer reviews are one of the most powerful sales tools that ecommerce stores have, since they provide customers with social proof and an unbiased source of information to guide their purchase decision.
Along with helping online retailers boost their conversion rates, customer reviews can also be leveraged to reduce return rates. Displaying reviews that provide greater details and context regarding a product — such as how an article of clothing fits certain body types or how the color of a product in-person compares to its photos — can go a long way toward helping your customers make informed purchases that they are much less likely to return.
Example of helpful product reviews
Steve Madden is one company that makes excellent use of product reviews. Each product page features searchable, filterable product reviews to set customer expectations. Steve Madden is an apparel brand, so they let you sort reviews by sizing, whether they contain images and videos, the age of the reviewer, the pros of the product (like “cute,” “comfortable,” or “value,”) and whether the reviewer recommends the product.
They also have a section where shoppers can ask questions that people who previously purchased the product can answer (e.g., “Can you exercise in these shoes?”) as well as an overall sizing scale, which shows whether reviewers tend to think the product is true to size:
5) Optimize the accuracy and speed of fulfillment
One common reason why a customer may choose to return a product is that the product showed up late and they no longer need it. To keep your customers as satisfied as possible post-purchase, optimize the accuracy and speed of fulfillment to make sure that every customer receives the exact products they purchase within the promised timeframe.
Tips to improve your shipping accuracy and speed
There's no better example of an ecommerce platform that has optimized its fulfillment process than Amazon. Offering two-day shipping on the vast majority of its products is just one way that Amazon can prioritize customer satisfaction and limit returns.
However, most brands can’t match Amazon’s speed of delivery, at least in-house — that appealing offer is only possible for massive-scale, high-GMV companies. One strategy to reduce shipping-related returns is to provide accurate shipping estimates for all customer orders: clear expectations are better than nothing at all.
Another strategy is to work with a fulfillment partner like the Shopify Fulfillment Network or ShipBob to achieve Amazon-like shipping. Both of these fulfillment partners help DTC brand offer expedient shipping that can both drive sales and reduce returns.
6) Don't skimp on packaging that protects your customer's product
Receiving a damaged product is another common reason why online shoppers make returns. While good quality control can ensure that a damaged product doesn't leave your warehouse, there's only so much you can do to prevent a product from becoming damaged en route to the customer. What you can do is protect your product as much as possible by using high-quality packaging. For some products, this might not be much of a concern. However, if your products are fragile or prone to damage, put some extra padding or structural protection into the packaging to protect them in transit. Reducing the risk of damage during transit can go a long way toward lowering your return rate.
Example of protective product packaging
Apple’s packaging is renowned for its minimalist, yet immediately recognizable design. While it looks simple from the outside, Apple’s product packaging features multiple layers of sturdy cardboard and styrofoam padding to thoroughly protect Apple devices en route to the customer.
7) Develop a clear, proactive post-purchase experience
An amazing pre-purchase experience is essential for optimizing your store's conversion rate. But the buck doesn’t stop when a customer completes the purchase. A clear post-purchase experience can drive repeat business and proactively minimize your return rate.
There are several ways to offer a positive post-purchase experience for your ecommerce customers. You use self-service automation flows that let customers know about the status of their order, create and share help center articles that explain how to use the product, schedule a call to walk customers through the ins and outs of their new product or offer discounts — just to name a few.
Example of a great post-purchase experience
Warby Parker lets any customer try on a pair of glasses before confirming the purchase. In the post-checkout email, they include tips for the home try-on kit.
While this is a little different than most use cases, since it’s a try-on shipment instead of a purchase, the step-by-step tips provide a strong example of the type of guidance that can set customer expectations, reduce avoidable issues when the customer receives the product, and directions for where to find support if an issue does arise.
8) Identify customers who abuse your return policy
The majority who return products have a legitimate reason for doing so. However, there are those known as “serial returners” who abuse ecommerce return policies. These dishonest customers purchase products with no intention of keeping them, essentially renting products for free at the expense of the store they purchased them from. If you can identify customers who are abusing your return policy in this manner, the best thing you can do is ban them from making further purchases from your store.
Resource for reducing return policy abuse
Most companies choose not to publicize their policies for dealing with serial returners. However, here is an excellent resource from Shopify on how online store owners can address this common problem.
9) Expand the length of your return policy
It may sound counterintuitive, but giving customers a longer window to return products can actually reduce the return rate for your ecommerce site. If you only give customers a short period of time to decide whether they want to keep or return a product, they often feel rushed to make a decision. Giving your customers more time to become comfortable with your product before they are forced to decide whether they want to keep or return it increases the likelihood that they will choose to keep it.
Example
New mattresses tend to take a little getting used to. To prevent customers from returning mattresses before they have the chance to break them in and become used to them, Mattress Firm allows customers to return their mattresses up to 120 days after the date of purchase.
10) Use gift cards and loyalty points
At the end of the day, returns will always happen. One strategy is to mitigate losses from returns by doubling down on a customer loyalty effort like gift cards and loyalty points.
In addition to driving long-term loyalty and repeat purchasers, loyalty points and gift cards can also be offered in place of a cash refund for returned products. This enables you to offset some of the expenses you incur when a product is returned, because it encourages customers to exchange their product rather than return it for a refund.
Example of gift cards and loyalty points
There are plenty of examples of companies that leverage gift cards and loyalty programs in a variety of different ways. The North Face's loyalty program, however, stands out because customers can earn points for many reasons — not just making a purchase — and the brand’s rewards are custom-tailored to each individual customer.
Easily manage ecommerce returns from one central customer support hub
Product returns can be a massive expense for ecommerce stores due to the high rate at which ecommerce products are returned and the high cost of processing online purchase returns. By following the 10 tips outlined above, you should be well on your way to reducing this frustrating expense.
As you read, improving your customer experience helps you lower your return rate and process returns more efficiently. Gorgias’ customer service platform helps you do just that. With Gorgias, you can limit product returns and boost customer satisfaction by offering fast, omnichannel, and self-service customer support.
Learn more about how Gorgias can integrate with returns management software and help you reduce your ecommerce store’s return rates with outstanding customer service — contact us today.
