The Growing Normalization of Returns in Ecommerce

It's Official: Smooth Returns Are Critical To Customer Satisfaction

More than a fifth of all retail purchases are projected to occur online in 2023, driving the global ecommerce market up to $6.3 trillion. That number is expected to surge to more than 24% by 2026. But the flip side of a robust ecommerce sector is the need for returns. While return rates remained relatively flat from 2021 to 2022—16.6% and 16.5%, respectively—many retailers still struggle with the cost and logistical burden of managing returns. In 2022, it cost $33 for retailers to process a return.

Easy returns have become table stakes in ecommerce, thanks to hassle-free policies popularized by companies like Amazon. When retailers are able to meet those expectations, they're not only in a better position to improve the overall customer experience, they can also foster customer loyalty. In this article, we’ll look at the causes for returns—and how to minimize them—along with the key elements of a smooth return.

(Want more returns insights? Ready our latest research here.)

Primary causes for returns

Retailers need to understand their customers' evolving returns habits and expectations, and adapt accordingly. Once a retailer knows the trends driving their returns, they can create a plan to decrease their return rate.

Key elements of smooth returns

The smoothest return is one that allows the customer to decide when, where, and how they complete their returns. That can include:

The most important thing a retailer can do before and during the return process is communicate

According to the National Retail Federation, 86% of shoppers check the return policy before making a purchase: Before the customer ever clicks the “Buy” button, they should know whether an item is returnable, the duration of the return window, return shipping costs, and anticipated refund time. Most of that information should appear in the PDP or shopping cart, as well as the order confirmation.

Much as customers are glued to tracking emails while waiting for their orders to arrive, they are similarly invested in tracking their refunds after returning items. Retailers looking to delight customers through post-purchase communication can leverage return tracking emails to solidify the relationship.That means reaching out to customers when:

  • A courier receives an item for return
  • When the item arrives at the retailer’s warehouse
  • When the return is approved
  • When the refund or credit has been issued.

Each communication should outline the remaining steps and timeline for the refund, and link back to a branded tracking page where the customer can follow the return journey.

It’s in a retailers best interest to make returns easy, but that doesn’t mean they have to be free. A staggering number of customers—87%—say free returns factor into a purchase decision. Nevertheless, Narvar research finds that 25% of shoppers would pay for returns in exchange for convenience. 

Instead of trying to recoup the cost of return shipping with return fees, consider using return fees to incentivize certain customer behaviors. For example, offer a 30-day return window, but free return shipping on returns initiated within 10 days of the delivery. Accept ecommerce returns for free in-store (BORIS), but charge $10 for a return shipping label on returns made by mail. Even Amazon has started charging a nominal fee for returns made to a UPS Store when a Kohl's, Whole Foods, or Amazon Fresh store is closer to the delivery address. 

Building a better customer experience

The post-purchase experience—particularly around returns—remains critical to customer satisfaction. Today's consumers are savvy and demanding. They want more information and transparency—not only around what or how they choose to buy, but also around what they can expect with returns. 

Return policies can make or break a retailer’s CSAT scores, and customer loyalty ultimately determines a retailer’s financial health. Do you need help turning returns into a competitive advantage? Schedule a demo today, and learn how Narvar’s post-purchase platform can turn a one-time customer into a lifetime customer.

(Want more returns insights? Read our latest research here.)

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