How well your business handles those returns may have a big effect on your bottom line.
“The customer's default mindset is that a return in any form is already an inconvenience, so a failed attempt can inflate the annoyance to the point where the shopper will seriously consider no longer shopping at a particular store," said Dennis Armbruster, a consulting managing partner at LoyaltyOne, a provider of loyalty marketing and programs.
Don't Irritate the Customer
A recent Google consumer survey by LoyaltyOne shows a bad return experience can affect a company's bottom line. About 60 percent 1,207 respondents vowed to stop shopping at a particular store if they find making a return an irritating experience. That's bad news for businesses that know the value of return customers. In addition:
- 50.9 percent said making returns stressed them out
- 39 percent said they give things away just to avoid making returns
- 86.9 percent said they would tell family and friends about bad return experiences — and everyone knows word of a bad experience can travel fast in the age of social media,
The survey also showed the value of a positive return experience. Nearly 80 percent of LoyaltyOne respondents said they would shop more regularly at a store that offered a positive return experience. And some 83 percent said they would recommend that store to family and friends.
So how do you get it right when it comes to returns? Experts say it’s about having the right systems in place, clear policies and procedures and a commitment to doing returns right.
Focus on Problem Spots
One way to ensure a smooth returns process is focus in on what are historically the biggest problem areas, said Tom Caporaso, CEO of Clarus Marketing Group.
“The biggest complaint consumers have about online returns is being charged for return shipping, which is understandable. Having to pay to send back an unsatisfactory purchase is kind of absurd,” he said. “A SmartHub study, though, found that more than 90 percent of online retailers make their customers pay the return shipping charges.”
Other common gripes, are
- Problems returning online orders to stores,
- Overly complex return policies and procedures
- Return policies that are hard to locate
“According to SmartHub, over 30 percent of retailers don’t offer full details about their returns on their websites,” said Caporaso.
Anything but hassle-free usually causes a negative experience. Complaints stem from unclear return policies and policies that are inconsistent across all channels. Importantly, consumers become unhappy quickly when their loyalty to a store is not taken into account. The most severe problems directly tie to restrictions, such as packaging or receipt requirements, time frame and even location, that complicate the process and can result in a failed attempt at a return. “
Further complicating the returns process is the expectation of seamless experiences between online and physical shopping. Many retailers are still struggling to develop the inventory and analytic databases they need to make sure cross-channel processes are smooth and efficient, said Caporaso.
“With so many channels, promotions and other factors to test, creating a comprehensive return policy can be a tricky needle to thread,” he said. “Given these other demands, it may not be a priority for some retailers either, which can be a shortsighted approach. The returns process is often the last chance a retailer has to save its relationship with a shopper, so getting it right needs to be a high priority.”
Often distribution centers for growing retailers have trouble keeping up with the increasing number of returns, which are ironically triggered in part by easier return policies.
“Returning online purchases is becoming significantly easier for consumers due to retailers’ willingness to pick up returns directly from households and their willingness to cover the cost of returns,” said Armbruster. “These trends are contributing to a rise in returns. In fact, retailers such as prescription eyewear supplier Warby Parker are even encouraging consumers to over-order with the intention of receiving several returned items.”
In an attempt to handle this challenge many retailers with a large number of brick and mortar stores have started using them as small distribution centers. “The stores need to function as more efficient return destinations — not only for return shipments but also for walk-in customers who want to return their online orders,” said Armbruster.
Getting Returns Right
When looking at your returns process it's important to identify objectives that help make the process as easy as possible for customers, said Caporaso.
- Letting customers return online orders in stores
- Offering free return shipping via prepaid return labels, along with detailed information about returns, with every shipment
- Including easy-to-find links to easy-to-understand returns policies on every product page and on order confirmation pages
- Making sure their customer service reps provide customers quick, easy-to-understand information on the returns process, both online and over the phone
Easy returns can reward retailers as well as customers. A four-year Washington & Lee study of two leading online retailers found that shoppers who received free return shipping increased their purchases with those retailers by 58 to 357 percent, while customers who had to pay for return shipping reduced their purchases by 74 to 100 percent, Caporaso said.
“What’s more, information from Endicia showed that after enjoying an easy return process with a certain retailer, 64 percent of customers will refer their friends to the retailer, and 95 percent will make additional purchases there," he added.
Armbruster said it also pays to get to know your loyal customers and how they view your returns process, explaining:
I’d encourage retailers to review the profiles of customers who've made returns, pre-return and post-return. Assess their spend behavior before and after, paying special attention to high-value shoppers and shoppers who have reported negative experiences through proprietary customer service channels and social media."
It’s important to look at complaint-free returns to track how they positively affect your business — and to also assess how much negative experiences are dragging down the bottom line.
“It's safe to assume that negative experiences are affecting more than just the shopper making the return, so be sure to take that into account in any cost-benefit analysis aimed at fixing the most egregious return issues,” said Armbruster.