4 Models for Effectively Handling E-commerce Returns

Returns are a fact of life in eCommerce. While most people keep the products they receive, others will send them back. There are myriad reasons for doing so. Perhaps a product looks different in real life than it appeared on your website. Or maybe a buyer accidentally ordered the wrong size or model, meaning a product is incompatible with their needs. Someone else may have found a better deal. Or, perhaps the product sustained damage in transit and the customer wants a replacement.

Consider these four models for effectively handling eCommerce returns. Then make sure whatever return policy your store chooses is optimal for both your customers and your bottom line. Given more than 60 percent of shoppers will read your return policy before buying, a solid one can serve as a make-or-break factor in your sales figures.

Free Returns, Free Shipping

The most appealing return policy for customers is a free one. Furthermore, they prefer the retailer shoulder the burden of paying for return shipping. Adopting this policy can drive sales if customers are aware of the incentive while shopping. This can also drum up repeat business because customers typically have a more positive experience with buying and returns. Offering free returns and free return shipping goes a long way toward cementing your reputation as a customer-centric online store.

However, critics of this approach argue it’s simply unsustainable for many retailers. With margins in eCommerce already tight, it can be a burden on the retailer to pay for return shipping plus eat the cost of the returned merchandise.

To figure out if this system is truly reasonable for your store, you’ll have to crunch the numbers. It ultimately depends on what you sell. Returning a pair of socks is much simpler than returning a floor lamp, stereo or couch.

Free Returns, Buyer Pays Shipping

If you aren’t in a financial position to offer free returns with free shipping, you may choose to offer free returns while still requiring buyers to pay for return shipping. The good news is certain enterprise ecommerce platforms integrate with plug-ins and apps specifically designed to help handle returns. This way, regardless of how you configure your returns policy, you will have a centralized portal for executing the details such as return shipping labels, customer inquiries, refunds and exchanges.

Free Returns, In-Store Credit or Exchanges

Handing out full refunds for returns can get pricey, fast. Instead, some brands offer in-store credit or product exchanges instead. This means stores get to keep the revenue from the original purchase, but the customer still has the opportunity to choose something more suitable at an equal value. This also helps your store avoid hefty credit card transaction fees, as the buyer receives value from your store rather than “cash back.”

No Returns Allowed

Full disclosure: In this day and age, it’s very risky to refuse to accept returns. As Business News Daily writes, “A ‘no returns, period’ policy isn’t going to fly with customers who expect top-notch service and convenience.”

A better approach is to create clear-cut boundaries and spell them out in your return policy’s terms and conditions. For example, you may accept returns on unopened products only. Make sure customers then know ripping open the packaging or removing the tags will void their right to return the product. Or, perhaps you’ll only accept returns on products damaged in transit or incorrectly boxed—mishaps clearly outside a customer’s control.

These four models for effectively handling eCommerce returns demonstrate how there’s no one-size-fits-all solution; it depends on the nature of your store. However, always aim to impress the customer whenever it’s a financial possibility.
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