Just as Black Friday is known as the busiest shopping day of the year, the day after Christmas is known as the busiest return day of the year. The high rate of returns tends to continue for the next few weeks as people seek to return or exchange gifts because the items were the wrong size or color — or the recipient just wanted something else.

While the return of gifts can be anywhere from an inconvenience to a big hassle for customers, enterprising companies can use these occasions as opportunities to improve CX.

Streamline the Return Process for Better CX

Retailers have an obvious incentive to reduce returns as US customer returns accounted for 16.6% of US retail sales in 2021, according to a National Retail Federation report, said Alyx Kaczuwka, head of product marketing at XY Retail. But holiday returns are inevitable, so it is essential for retailers to offer personalized customer experiences that can turn as many of these returns into exchanges as possible.

Exchanges are better for the retailer’s bottom line, Kaczuwka pointed out. With 360-degree visibility into warehouse and in-store inventory, retailers can easily facilitate exchanges rather than returns when the holiday gift wasn’t in the customer’s preferred size or color and ship the item directly to the customer from anywhere — or find them something that better suits their style.

Customers want holiday merchandise returns to be as convenient and hassle-free as possible, Kaczuwka added. “Retailers that have identified the pain points that customers have experienced in the past with returns should streamline their processes to remove any friction from the return process. Easy-to-understand return policies, extended return times and convenient options like the ability to return goods purchased online in-store help deliver a seamless customer experience.”

When removing common pain points, one place to look is discounting, which can often be confusing to a gift recipient returning the item — as well as to retailers’ systems, Kaczuwka said. “Ensure that when a gift receipt is provided, a full record of any discounting the purchaser received is retained in the system so that the refund can be processed accurately and clearly communicated and the customer understands any discrepancy between the purchase price and current retail price.”

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Offer Swift Refunds on Returns to Avoid Customer Distress

Though many times a customer will accept an exchange, other times, particularly when money is tight, the customer wants a refund. And with holiday bills pending (most credit card charges need to be paid in three-to-six weeks, depending on the billing cycle), customers want their money back as quickly as possible, said Brian David Crane, Spread Great Ideas CEO. 

“Delayed refunds create discomfort, which is why companies should have a policy where it is easy to check products for any possible issues before providing full refunds,” he said. “A good refund policy always means a 100% money-back guarantee. Provide extended return or exchange timelines (30-to-90 days) so customers aren’t pressured to make quick decisions. Ensure that the link to the return policy is prominently visible on the website, so there is no difficulty in finding it.”

Learning Opportunities

Defuse Negative CX with Real-Time Insights

Sixty percent of retailers adjusted their return policies this year, adding to the potential for confusion and frustration among customers, said Dan O'Connell, Dialpad chief strategy officer. “With poor customer service estimated to cost American businesses billions of dollars each year, it’s clear that call center agents need more than a headset and notepad to tackle customer concerns.”

Today’s digitized businesses require real-time insights to defuse situations and fuel long-term satisfaction and business growth, O’Connell added. So contact center agents that have access to full customer intelligence and call sentiment analysis can offer customers more satisfying answers to questions regarding returns. 

Related Article: The State of Digital Customer Experience: Where We're Headed

Offer Free Return Shipping to Keep Customers Happy

Needing to ship back an item is frustrating enough. The customer has to ensure it is repacked properly, get it to the post office, UPS or FedEX (depending on the merchant’s rules) and ensure all addresses are clear and correct. Requiring payment for the shipment would further alienate the customer, Crane said.

“Businesses can provide a minimum order limit for free return shipping so that both stakeholders are happy,” he recommended. “Provide a clear return deadline, so they know when to return the product. Avoid lengthy and complex terms and conditions that may baffle the customer. Provide extra seasonal deals during the holiday season to ensure that a product return experience does not change their decision to shop on your platform in the future.”

Final Thoughts on Holiday Returns and Better CX

While customers and sellers would prefer that holiday gift returns weren’t necessary, since they are inevitable, companies should consider the suggestions above as ways to make returns opportunities to improve the brand’s CX, which can increase customer loyalty and lead to future purchases that will more than pay for the cost of any return or exchange.