Narvar's 2024 State of Returns report is here—get your copy now!
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Narvar's 2024 State of Returns report is here—get your copy now!
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Retail returns are expected to grow 2.2% to $627.34 billion this year, accounting for 8.5% of total retail sales. While returns will always be a part of the retail landscape, closing the divide between expectation and real-world experience can help retailers decrease their rate of returns, and lower their operational costs in the process. From enhanced product detail pages (PDP) to post-purchase education, here’s how to lower ecommerce returns in 13 steps.
Most actions a retailer can take to minimize returns involve conveying information about the product so the customer makes the right choice to begin with. This includes packing more details and better imagery into PDPs, and maintaining current reviews, and Q&A sections on each PDP.
The goal of PDPs should be to proactively address any detail that could prompt the customer to make a return:
If the product photography depicts more items than are actually sold as part of the unit, that information should be clear. For example, if a dress is styled with a belt that is not part of the product SKU, there should be a “belt sold separately” bullet point in the item details.
For electronics, it’s important to anticipate compatibility needs within systems—especially when it comes to connected home items. Will the item work as intended directly out of the box, or will the customer need supplemental hardware, apps, or systems to use the item? Hardware and software requirements should be reflected on the PDP.
If the product doesn’t fit, it’s going back, whether it’s a jacket, a water bottle, a blender, or a piece of furniture. Measurements are one of the most useful details a retailer can share on the PDP.
Most apparel retailers address product measurements through the manufacturer’s size charts, though reviews prove how unreliable those size charts can be. In resale, it's common to list the chest, waist, hip, and length measurements for a garment—a practice that could be easily replicated in retail.
For furniture and home goods, include dimensions and weight, including those for removable parts. Restoration Hardware, for example, lists both the overall and interior dimensions on storage furniture such as armoires, and separate exterior dimensions for pieces that have removable parts (e.g. feet or embellishments). Anticipating that many of their customers will want to store a television in an armoire, their armoire PDPs also include the maximum size and weight of TV that a piece can accommodate.
Apparel returns account for 10.01% of all ecommerce returns—the highest amount of any product category, and 93% of shoppers consider product photos to be “important” or “very important.” Showing apparel on models of different sizes can help shoppers visualize how an item will look on their own bodies (and minimize bracketing in the process).
Instead of photographing only one model per item, shoot apparel on two to three models of different sizes for each item. Include each model’s height and measurements (chest/bust, waist, and hips), as well as the size they’re wearing in the photo.
Shoppers want to know what an item looks like in real life: 72% of ecommerce shoppers want to see real customers’ images and more sizing and fit information.
Studio photography for PDPs captures the perfect version of the item. While that can increase sales, it also leads to a sharp increase in returns if the real product doesn’t look like the studio image (49% of fashion returns happen because an item looks different in person than online). For items like clothing and home goods, past customer photos can add context to an idealized version of a product, right-sizing a shopper’s expectations.
Customers return over 20% of their ecommerce purchases, compared to only 9% of their brick-and-mortar purchases. For categories like apparel, footwear, and cosmetics, brick-and-mortar has an advantage because a shopper can try an item before buying it. Augmented reality (AR) creates a comparable experience for ecommerce shoppers, and even extends to the category of home furnishings. Beauty brands like Sephora and Ulta Beauty use this type of technology, as do home furnishings retailers like Ikea and Revival.
Shoppers want to read reviews before making a purchase and 86% will not make a purchase without reading reviews. Offering past customers a future discount to review their recent purchases drives repeat sales and increases first-time conversions.
PDP copywriting is the highlight reel for a product and—similar to product photography—can create unrealistic expectations. Customer reviews offer a more accurate perspective, including real-life experience with product performance, which lowers ecommerce return rates.
Even the best marketer won’t anticipate all the questions customers might have about an item. Research shows that 91% of answers to questions on product pages were not addressed in the original marketing copy. Adding a Q&A section to PDPs gives customers a channel to discover if an item will meet their needs before they make a purchase.
When retailers handle those inquiries on an individual basis through customer service, they incur duplicative costs by answering the same question multiple times. Publishing the answers creates a more robust PDP and minimizes customer service costs.
Convincing the shopper to click the buy button is only the first step. Retailers must set customers up to succeed with potentially-complicated items, (like electronics or small appliances), offer meaningful customer service support for complications, and present attractive alternatives to returns for refunds.
Retailers should use post-purchase communication to increase the likelihood of customer satisfaction. For purchases like furniture (which may require assembly) or electronics (which may require set-up), retailers can use the shipping and processing period to remind customers about any additional tools or software needed to use their item upon arrival.
For example, audio company Sonos uses branded tracking pages and emails to explain how to create an account, download the app, and custom-tune their devices with Trueplay. By educating the customer before their order arrives, Sonos increases excitement around the unboxing moment, and reduces customer service queries.
Seventy-four percent of customers reported experiencing a product or service problem in the past year, and 63% feel “rage” about the experience. A retailer’s customer support channels are the first line of defense in diffusing that rage and fixing the problem.
“Although many customers are looking for repairs or refunds, they’re also hoping for a sincere apology and acknowledgment of their complaints,” said Thomas Hollmann, executive director of the Center for Services Leadership at ASU’s W. P. Carey School of Business. “A sincere, ‘I’m sorry this happened,’ can turn a potential blowup into a lifelong customer.”
Every post-purchase communication with a customer should equip the customer with the information they need to contact customer service should a problem arise. Making customer service contact easy can save the transaction.
For retailers selling items that require assembly or set-up, consider including a physical postcard in the product packaging to direct the customer to a call-center for help with assembly issues or missing parts. If a part is damaged or missing, customer service can offer to fastrack shipping a replacement.
If set-up and assembly are more than the customer can handle—or the customer feels too lazy to deal with it—they will return the item. Offering a white-glove service to eliminate the customer’s pain points can help retailers increase sales and cut down on returns. Best of all, the retailer doesn’t have to absorb the extra cost—the customer is typically responsible for white-glove add-ons.
Ikea is a prime example of a company that offers white-glove add-ons to reduce returns. By offering customers the option to book a TaskRabbit to assemble their purchases during check-out, Ikea minimizes the number of customers who take advantage of their generous 365-day return policy.
Natural white glove add-ons in ecommerce can include:
Returns should be easy, but they don’t have to conclude with a refund. Exchanges and store credit allow retailers to recapture the revenue from the return.
Lululemon, for example, offers a Fast Track refund option, permitting shoppers returning three or fewer new items to receive a refund via e-gift card within two hours of dropping their items off at a FedEx or USPS location (rather than waiting days or weeks for the return to be received, processed, and approved at the warehouse).
Adidas offers alternate sizes and styles during the online return process to attempt to save the sale. If a customer chooses to exchange the item instead of requesting a refund, the new item is shipped immediately and the customer gets seven days to place their original item in the mail.
Some retailers will further sweeten the deal by offering a bonus amount in store credit. If a swimsuit, for example, cost $100, the retailer might offer a 20% credit to the customer to return the unwanted swimsuit for a $120 store credit, instead of a $100 credit card refund.
Sometimes the most cost-effective, customer-friendly strategy is to issue the refund and let the customer keep the item: 65% of shoppers appreciate that retailers are saving the shoppers’ time and effort by letting them keep the return.
Rules around keep-the-item returns should be dynamic, responding to seasonality, shipping costs, fulfillment staffing shortages, and demand for the product. Narvar research found that almost 60% of keep-the-item returns were for products with a retail value under $20, while about 20% were for purchases over $50 or even over $100.
Customer reviews and photos aren’t solely for the benefit of prospective shoppers; retailers should be evaluating that feedback, and using it to make real-time decisions about PDP copy and photos, as well as product marketing.
Strategies will vary by product category. By leveraging data points like existing reviews or reasons for returns, retailers can bridge the gap between expectation and experience to reduce returns.
Consider the likely outcomes from these common reviews:
Painless returns are critical for customer loyalty: More than 60% of online shoppers decide which retailer they’re going to buy from by reviewing their policies. But customers still dread returns. A 2022 survey of 2,000 U.S. adults found that 58% of shoppers would be willing to do “nearly anything” to avoid returning the items they bought. While retailers have to approach returns as a service, they should also consider how better product information and customer support can eliminate the need for returns.
