So, you’ve successfully launched an online shopping platform and done everything to differentiate yourself from the competition? You have everything like amazing quality products, top notch customer service, appealing images on website, and unbeatable prices. But, do you have a clear, 11 Best Practices of Return and Refund Policy?
If not, it may be working against you, rather than for you.
Return and refund policy serves as the most important factor when it comes to choose an online shopping platform and numbers prove it. 95% shoppers prefer buying again from the same platform they had a better and convenient exchange or return experience.
And they’re likely to spread positive words about you if they have experienced your return or exchange with you. Furthermore, online websites with 40% repeat customers generate 50% more than similar online sellers.
When you are running a successful online shopping business, mistakes are likely to take place like wrong size, wrong product, faulty product, etc., but the best way to ensure the customer buys from your store is to make product return and refund process as easy as possible for consumers.
But, I know returns can be expensive and leave a damage to your profits: returns cost 2 to 3 percent points of total online sales. However, there are ways you can leverage returns in both yours’ and customers’ best interest.
Regardless of how your returns work, multiple steps can be taken to reduce the stress. Just keep in mind the most common reasons that customers return products:
1. Package arrived damaged
With the massive number of packages moving around the world through delivery services, it is no surprise that many products get damaged during transit.
As a business owner, you can ensure dealing with a reliable and experienced shipper who would ensure that products are properly packaged to protect products from hazards.
Adding additional protection to the products is never going to harm your profits. Learn more about protecting your shipments. Here are some tips to follow to deliver undamaged products:
- Securely packaging your parcel for transit is absolutely vital.
- Make sure that your shipping labels are securely fastened on to the item.
- Book with a reputable courier.
- Provides total coverage with bubble wraps for products that require impact protection.
- Use air cushions to provide protection for objects rolling around.
Three things to note when choosing the packaging are:
- Know your ECT: The ‘Edge Crush Test’ rating tells you about the capacity of the box. Single -walled boxes may be good for small and medium sized products, while bigger products should only be shipped in double-walled corrugated boxes.
- Degree of fragile as the fragile products need a little more protection during the product delivery process.
- Isolating Liquids: If shipping liquids such as perfumes, aerosols, they must be separated using padded poly bags. When possible, ship these types of items separately.
2. Wrong product shipped
Ecommerce is the biggest industry these days with millions of products being ordered every hour globally. If you are running a successful online business which receives an impressive number of orders every day, mistakes are likely to happen.
But, if it accounts for a large percentage of your returns, then it is good to review your warehouse practices. Have a check on the inventory management and shipping processes tips:
- Always have SKU numbers, barcodes and product specifications. This ensures no mistakes are made when delivering products as thousands of orders can be made for the same product. With different SKU numbers, it’s easier to deliver the right product to the right shopper.
- Use multiple vendors as inventory management also means vendor management. Having highly-in-demand products can be difficult, especially if you don’t have enough storage for them. Hence, it often makes sense to commission a second vendor for the product as a back-up plan.
- Forecast inventory demands as it helps forms the base of predicting your inventory requirements and the storage space you need.
- Bin location is a smart way to access most accurate information about the product location. Having bin location leads to quicker product finding. It is useful for warehouse inventory management process to be clutter free.
Avoid mixing up SKUs as it may lead to great disaster. Mixing up different SKUs into a bin location increases the time in locating and picking up the desired item.
3. Malfunctioned product delivered
Although it counts a very small percentage of the return reasons, but it is still a concern among the global eCommerce industry.
Make sure to train your team to troubleshoot issues with the products you sell so timely solutions can be provided for the malfunctioned products.
Ensuring timely solution to the product operation issues can save your time and money. Here are a few tips to ensure no malfunctioned products are delivered:
- Check the products before sending them to customers.
- Use the appropriate packaging for product safety during shipping process.
- Install safety equipment at warehouse to prevent cartons from falling off palletized loads and breaking open.
Hire knowledge staff at the warehouse who are aware of the entire shipping and delivery process.
4. Product doesn’t meet buyer expectations
The biggest problem with online shopping is that there is no way to available to closely inspect the item before making a decision.
This, usually leads to misunderstanding and shoppers finding themselves with something that is unable to meet their expectations. In-depth and clear documentation can be the solution for it. Keep in mind these tips:
- Take multiple images from different angle and provide the option to zoom in to view finer details.
- Visible customer reviews are great support for buyers when placing orders. It lets them stay prepared for the quality of product they’re going to receive.
- Sizing chart is another great way to ensure proper product delivery. When selling a variety of sizes, make available an easy to use sizing chart on your site. It helps buyers to make sure your customer receives the right size the first time.
- Description should be clear, better and well-written using an easy-to-understand language. Include a written summary as well as tabular technical specs for each item you sell.
11 Best Practices of Return and Refund Policy
It is a fact that a large number of online retailers are not doing a bang-up job of managing online returns. Figures have shown that having a strong and positive return & refund policy can be helpful for having on repeat purchases and customer lifetime value. 67% online shoppers prefer reviewing ‘Returns & Refund Policy’ before buying.
Followings are some best practices to help you with online retail operations and reduce the rate of returns as well.
1. Make it so simple, a kid can understand
Before you make your services live and the products available to be sold, it is pertinent to keep in mind that the refund and return policies should be clear and easy to understand. Avoid using technical and professional language, instead make is so simple a kindergarten can understand.
Compare the given website return pages and see how beautifully the second one has defined the return and refund policy:
And here comes the LoveHoney, making things easier
Make sure to mention the following information in the return and refund policy:
- How do customers get the return label?
- Do customers need to return product in its original packaging?
- Is it required to be in original condition?
- If wear and tear are acceptable, make sure to mention.
- How will they get refund? In their PayPal account (or other gateway)?
Here is an example from “Modanvati” on how all customers’ queries can be answered through Return & Refund page
2. Improve Order Fulfilment Accuracy
We all know that the main cause of online returns is shipping the wrong (wrong color/variant/size) or faulty item. Make sure to invest in an order fulfillment platform that helps you with the right data from your online store that is transmitted onwards correctly to your fulfillment centers or drop ship partners.
Utilizing an automated platform or software helps eliminate the possibility of errors due to miscommunications and manual intervention.
Here are a few strategies to help you speed up order fulfillment process:
- Classify your inventory to ensure faster and accurate handling.
- Use systems for better visibility into all aspects of order fulfillment
- Automate the process to avoid mistakes during while handling manually.
3. Ensure Product Data Accuracy
As mentioned earlier, the biggest reason for online returns is the dissonance between what customers want and what is actually delivered to them. For example, if a buyer orders a pair of shoes, with size of UK 6. But is delivered US 6 size, it’s going to be sure that it will be returned to you.
Bridging this gap can be the right step to ensure reduced returns and to do justice to your customers. Keep a check on the product details listed on website like product titles, descriptions, size guides, and also match your product’s attributes to those of the channel you’re listing it.
Check below an example of a perfect product description page:
4. Set up Online Returns Management Portal
Most online shopping websites are following the trend to not include a return shipping label in the box, but use a portal that manages the returns instead.
This seems to be a great choice for retailers as a centralized portal ensures a convenient, consistent user experience for buyers. This gives more control to buyers over the return process along with a variety of return options such as FedEx, UPS, USPS, etc.
With a centralized online return system, it’s possible to eliminate the possibility of drop ship suppliers packing the wrong products when delivering or returning a product with a particular SKU.
An online portal with automated live inventory feeds is a better choice when you want to allow users to exchange an item for another one in the catalog.
Another perk of using an online return management portal is the flexibility to modify returns policy without informing suppliers or updating them on packing slips each time. Using this system, you can also direct the returns to be shipped to a different store.
5. Decide Where to Ship a Returned Product
Customers appreciate if refunds are processed within a week or two at the maximum. The best way to ensure timely refund is to accept returns to your warehouse directly. Whether the item was fulfilled by a drop ship vendor or by you directly, this process helps speed up the returns and refunds process.
But, make sure not to use this process for all your products as the products with bigger sizes can be managed better by having them delivered directly to the drop ship partner or the supplier.
6. Provide Multi-channel Returns
If you’re a multichannel retailer, allowing shoppers to purchase from different suppliers and platforms, it makes sense to provide multichannel returns facility.
For example, if you have both physical store and online stores, give shoppers the freedom to exchange or return products from either the website or brick-and-mortar store.
Allowing shoppers to go through only a single return method (e.g. phone) can be tiresome for buyers.
I find it a mistake!
Consumers appreciate the flexibility and the convenience offered by the online stores for refund and they will be more likely to shop with a store that has something additional for them.
7. Keep Customers Informed
Just the way online shoppers appreciate progress of their order, they like to get informed about the return and refund request. Let them know when their product will be received for return and when the refund is being processed.
It will let them stay stress free about their refund process request and they won’t bother to chase this information through your customer service team. It will save a lot of time of your buyers and the sales team as well.
This will save customers from chasing this information through your customer services team, and they will appreciate the effort.
If not possible, at least let them know about the minimum time you’d take to refund:
8. Offer Free Returns… and they’d love it!
Of course, it won’t be free for you. You may need to pay for product delivery and also when the product is picked for return, but the investment is a worthy one. A leading online footwear platform, Zappos.com, disclosed that people buying the most expensive shoes from them have a 50% return rate.
If the number scares you. Let’s hear another shocking news. Zappos.com disclosed that customers started spending up to 457% more than they did before it offered free returns. Also, the repeat purchase spending dropped by 75% for customers who were asked to pay for return shipping.
And if you have it… Shout about it!
Offering free returns is great, but no one will know about it unless you shout about it or get buyers informed of it. Mention the information on product listing page so that customers know about this when they buy, just like displayed in the image below:
In order to make shopping experience better for your online buyers, don’t make your policies difficult to find. If you have it, displaying it on the frontend influences purchase decisions especially if shoppers aren’t 100% sure at the checkout.
9. Give Them Enough Time
Be as liberal as possible with your refund and return policy. For online buyers, return windows are becoming more important, and they have an increasingly large choice of places to buy. So make sure you don’t try to be smart with a tricky return policy.
Of course, customers will make mistakes and since I’ve already mentioned that nearly 50% of orders are likely to be returned, it is good to provide enough time to shoppers for return.
For example, if someone is buying a gift and having a busy time, 14 days might not be enough to time to make a decision on a return.
Let’s take an example of a mattress, which is an extremely personal thing. Your buyers may not know if the purchased mattress is a good choice or not. And with a default 14 days return policy, your shoppers may end up being disappointed with your services.
Let them have the product for around 30 days before reaching their decision to return and they’d be more than happy to deal with you always.
Check the example how smartly the mattress manufacturing company has ensured a better return policy where they’re providing 100 nights’ sleep guaranteed time.
10. Make return Process Easy to Initiate
We all make sure providing a simple and one-page checkout process to make buying easy and fun for the shoppers, similarly it is also important to make returns a positive experience for them.
Let me tell you a story. A sales professional from NY City purchased a cool t-shirt from an online platform that she thought would look great on her. She went through the checkout process and was fascinated so much with the product that she didn’t bother to read the return policy, which was the biggest mistake.
The platform offered 10 days return policy that too through an email request only. Sally tore the packing and threw the slips she got with the product, and unfortunately didn’t even have time to try her new t-shirt.
After a few days, when she checked the apparel she found it a bit loose. Now she didn’t have the product ID number and even the return duration was gone.
The return policies should be easy to understand, and if possible, make sure to display the information at product listing page. Also, make sure to display a graphical step-by-step description how to return the items just like shown by Amazon below:
11. Initiate Refund or Replacement ASAP
In nearly 65% cases, customer returns are for genuine reasons. It is better to have a speedy resolution to a return, refund or replacement. It will ensure that your customers don’t worry about purchasing from you in future.
Remember, if they have a good time buying from you, they’d keep coming back to you for more.
Amazon takes its customers seriously and ensures building great relationships with their buyers. As a reason, it has put in place a well-though and strategically designed:
Take a look at the detailed information provided to reduce panic when something has to be returned. For example, if consumer has purchased something with Cash on Delivery option, they’d need to wait for at least 10 days before they enter the panic mode. However, Amazon doesn’t let them worry as refunds are made much before the time.
When you own an online shopping business, you’re likely to deal with product returns and refunds quite often. But if returns are a pain point in your organization, make sure to implement the above-mentioned 11 Best Practices of Return and Refund Policy.