Reasons Behind High Return Rates And Ways To Help Reduce Loss
Returns happen. It’s part of the retail world for e-commerce and in-store transactions. Sometimes it’s the customer who is at fault, sometimes it’s the merchant or shipping company. However, too many returns can rack up operational costs and negatively affect customer experience, leading to an overall loss of revenue. Not to worry, though, as there are ways to reduce vendor losses from returns while improving margins. Here is a look at the typical reasons behind returns and a few ways to address them.
Start optimizing website conversion by improving the product page. One of the top reasons a customer returns an item is that the product doesn’t match the description or image. Receiving an item that does not live up to what was indicated by the merchant is a major let-down for consumers, so who could blame them for returning it? You can combat this by including an honest description with plenty of pictures on the product page. Avoid using over-photoshopped images, photos provided by the manufacturer and other potentially misleading visuals. Additionally, its highly recommended to include accurate sizing information for items — especially clothing. According to one analysis, 52% of returns were due to issues with sizing.
Another way to improve sales is to offer what customers want most nowadays: free shipping and free returns. A 2021 survey reported that an astounding 96% of shoppers consider free shipping to be a necessity, with free returns in second at 79%. You may be thinking these policies could be taken advantage of, and you would be right. However, having the option to make a necessary return boosts customer satisfaction and, in turn, sales.
Over the last few years, the rate of returns has increased, with industry claiming a 70% year-over-year increase in 2020. Shoppers utilizing abusive practices, such as “wardrobing” and “bracketing,” are a part of this increase. While the means to address these abusive practices are not as clean-cut, there are methods and limitations that companies can put in place.
Lastly, there’s addressing fraudulent purchases. From using returns to launder money from stolen credit cards to deceitful statements, there are many devices used to scam businesses. It’s advised to employ anti-fraud tools that are designed to block transactions from stolen cards or to offer refunds only to the original card or in the form of store credit. You can also use unique payment solutions to help reduce the costs of returns. These are techniques specifically designed with easy integration in mind, working to provide protection against fraud and abuse. Professional services are available to make sure these solutions fit your payment system and way of business.
Implementing new methods to drive sales and improve customer experience is a never-ending responsibility. By gaining a better understanding of customer needs and consumer trends, companies can more easily instigate these changes. For more information and statistics on retail return rates, please see the accompanying resource; courtesy of Signature Payments.
