Ecommerce has a growing returns problem. With average customer return rates of 20.8% for online purchase and growing, reverse logistics can quickly consume profits. Between transportation costs, restocking expenses, lost sales revenue, and reprocessing labor, high return rates diminish margins for online businesses.
While consumers increasingly expect lenient and even free return shipping policies, brands need balanced strategies to reduce returns where possible while maintaining a positive customer experience.
The good news is making targeted improvements throughout the online shopping journey can align purchases with desire and minimize buyer’s remorse and incorrect selections.
What's driving the rise of Ecommerce returns?
Ecommerce return rates vary substantially depending on the product category, price point, target demographic, competition, and other factors. Research from Retail Economics found that on average, return rates for online apparel purchases can be as high as 27%. The inherent challenges of conveying the nuances of fit, sizing, drape, and color for clothing and shoes online makes it difficult for customers to select the best size and style accurately.
Generous return policies can also be abused by some serial returners who frequently buy and return items. Even brands with the best intentions get taken advantage of by a minority of customers who order items with the intent to wear or use briefly then return them.
There are four core drivers behind most ecommerce returns:
- Poor fit and size: This is especially a problem for apparel bought as gifts or without properly measuring or selecting the best fit.
- Products failing to match expectations: people return products that don’t match their descriptions or photographs.
- Buyer's remorse and changed minds: People might regret their choices and choose to return their items, or decide they no longer like or want that item.
- Defective, expired or damaged items: People return items that arrive broken, worn, stained or near expiration. Quality control failures can lead to condition issues.
14 Ways To Reduce Return Rates
Reverse logistics processes can be expensive and time-consuming, which is why it is important for businesses to reduce the amount of returns they receive.
This can be done by optimizing the digital experience for your customers and optimising the returns process itself.
We have outlined 14 top tips and best practices that can help reduce ecommerce return rates and improve reverse logistics processes below:
How To Reduce Return Rates By Optimising Your Digital Experience
Optimizing the digital experience for your customers can help build trust, set realistic expectations about the product they are ordering, and lower the risk of customers regretting their purchase.
1. Provide Accurate Product Information
The first priority in any returns reduction initiative should be to convey highly accurate product details on category and product pages. This establishes trust and aligns expectations with the actual item's attributes once it arrives.
For apparel, listings should include specific garment measurements, material composition details, care instructions, and origin information. Pages should incorporate lifestyle images of items worn on models of all sizes to showcase drape, movement, and versatile fit.
Offering high-resolution zoom capability allows users to inspect an item’s fabric patterns and colors more closely. Similarly, fabric swatches can help demonstrate textures, sheens, and dye hues accurately on screen.
Augmented reality can also be used to overlay apparel on virtual models of diverse sizes. Showcasing items on models with diverse sizes and body types can help customers more accurately determine how the item might look or fit their own bodies.
High-value items like jewellery, electronics, and luxury goods should incorporate 360-degree spins, video demos, 3D models and other tools to provide full pre-purchase visibility. The goal is to mimic an in-store viewing experience digitally.
Product images should have color balance, brightness, and lighting consistency to avoid misrepresenting colors, materials, silhouettes and other attributes. Photoshop manipulation should only be used minimally.
2. Simplify Product Offerings
Enabling customers to easily determine the right size and style is crucial for minimising fit-related returns. Effective strategies include:
-
Offering detailed size charts with actual garment measurements for easy reference to current items. Go beyond generic size tables.
-
Fit finder quizzes asking for height, weight, body shape, fit preferences and other attributes to recommend the right sizes.
-
Displaying user reviews and detailed sizing guidance based on aggregated customer feedback about items running large, small, or true to size.
-
Showcasing products on models with diverse body types to give a realistic range of how items fit different figures.
-
Allowing customer Q&As before purchase to get personalized guidance from customer service on sizing and style questions.
-
Virtual try-on tools that enable uploading images or creating 3D model avatars to see virtual fit.
3. Improve The Online Experience
Beyond product pages, brands should optimise the entire online experience, from marketing to purchase to delivery, to establish confidence in buying, reinforce quality expectations, and prepare customers for the reality of the items ordered.
Ways you can improve the online experience for your customers include:
-
Intuitive site navigation, filtering, and voice/mobile search makes locating products easy. This means users of your website or app won’t have to worry about any No dead ends or complex workflows.
-
Clear messaging on shipping, refunds, exchanges and return policies at checkout and throughout the site, especially on mobile.
-
Proactive pre-purchase communication via chat, text or email to answer individual questions about sizing, materials, fit and style recommendations.
-
Post-purchase confirmation emails with order details, anticipated delivery timeframe, easy self-service returns instructions, and ongoing contact options.
-
Shipping notifications with carrier tracking updates at dispatch and through final delivery. Proactively notify of any delays.
4. Offer Product Ratings and Reviews
Customer reviews and ratings are great to feature on ecommerce websites as they provide customers with a dedicated space to provide feedback on a product’s quality and features. They can be key to helping prospective customers decide to buy your product.
Potential customers being able to read impartial, honest feedback about a product or item can prevent them from regretting their purchase later down the line by setting more realistic expectations about the product they will receive.
Adding a filter functionality to your customer reviews section can add extra value, as it allows potential customers to read reviews about specific elements of a product, such as fit, size, and body type.
Reviews and ratings can also be helpful for collecting data and insights into any common issues with a product. For example, if multiple reviews mention a clothing item being a poor fit or poor quality, you can use this information to improve the sizing or material used. Addressing common issues with a product will ultimately reduce the likelihood of returns.
5. Promote Exchanges Rather Than Returns
Encouraging customers to exchange products they are unhappy with rather than return them will help your business retain revenue while keeping buyers engaged with your business.
Exchanging a product for something else gives your business a second chance to impress the customer and prove to them why they should continue to order from you. If a customer simply returns a product they were dissatisfied with for a refund, they might be left with a more negative opinion of your ecommerce store and be reluctant to place an order again.
6. Implement Reasonable Returns Policies
Implementing a reasonable, clear returns policy that customers understand can build trust in your brand and give customers confidence in purchasing products from you. Although you ideally want to reduce return rates, not having a returns policy at all can discourage potential customers from placing an order at all.
Being honest and transparent is important in building a positive reputation for your brand and setting realistic expectations so customers won’t be left disappointed by anything unexpected.
7. Invest In Premium Packaging
Packaging plays an important role in reinforcing product and brand quality from the unboxing moment forward. Companies should invest in premium branded boxes, sleeves, wraps, and custom printed inserts.
Surprising and delighting customers with free product samples, coupons or other creative promotional items nested inside the packaging can encourage additional purchases.
Ensuring packaging opens easily without sharp edges or excessive tape improves customer satisfaction. Inserting accessible prepaid return shipping labels and printable paperwork makes product returns simple for the customer and builds goodwill.
Easy-to-read guides previewing product care, features and usage instructions set correct expectations about item attributes and function out of the box, which can help reduce the risk of the item being returned.
How To Reduce Return Rates By Optimising The Returns Process
Despite best efforts, returns will still occur. Making the return process quick and painless preserves customer loyalty and satisfaction for the long term. Having an optimised returns process can indirectly help reduce return rates by diagnosing and addressing the root causes of products being returned.
8. Be Flexible and Prioritize Convenience
Having a flexible and convenient returns process will give customers more confidence to purchase from you, knowing that they can easily return any items that might not be as they had hoped.
Informing customers about your straightforward returns process can build trust and encourage them to make more thoughtful purchases. Smarter purchasing decisions can contribute to fewer products being returned.
Brands should offer free, prepaid return shipping with multiple convenient drop-off options - from home pickup to retail locations to kiosks. Automating refund issuance immediately after receiving and inspecting returns reduces frustration.
9. Offer Returns Tracking and Keep Customers Informed
A transparent returns process is also important in building trust in your brand and improving customer satisfaction. Offering tracking on returned orders and keeping customers informed about the state of their returns is one way you can improve the transparency of your returns process.
Not only does this keep customers happy, but it can also be beneficial for your business by improving inventory forecasting and helping you analyse why the item was returned.
10. Process Returns Quickly and Efficiently
Rapidly processing returned merchandise back to a saleable condition is also important. Issuing refunds quickly can show that you have your customers’ best interests at heart and leave them with a positive impression of your ecommerce store. This can encourage them to order again with you in the future.
Processing returns quickly also allows you to identify and address the reasons for returns sooner. For example, damaged items can be repaired more quickly and put back in inventory for resale. Addressing the issue causing the item to be returned before recirculating it can help reduce future returns of that product.
For faster turnover categories like apparel, specialized third-party processors can efficiently handle inspection, restocking and recovery.
11. Ask For Customer Feedback
When a customer initiates a return online, it can be extremely beneficial to ask for some feedback on the product being returned. The customer could be asked to fill in a short form that gives insight into why they are returning the product.
Finding out the reasons for a return can help you improve the products for future buyers. Being committed to continuously improving products for your customers will ultimately reduce future return rates.
12. Analyze Returns Data
Analyzing return data identifies product-level trends, sizing issues, damaged items and other actionable insights to refine policies, sizes and product selections over time. The goal is continuous improvement.
Collecting data-driven insights that can be shared between sales and marketing teams can help you make improvements to a product’s quality, as well as improve the way in which a product is being promoted online. This can help set reasonable customer expectations and reduce the likelihood of a product not arriving as expected.
13. Invest In and Utilize Technology
Reverse logistics processes can be complex and time-consuming to deal with manually. Investing in and utilizing technologies, such as warehouse management systems, can help you handle the different components of the returns journey more easily.
From keeping customers updated about the progress of their return, handling refunds, and collecting and analysing returns data, technology can streamline your returns process and make it more efficient. This leaves you with more time to identify, address, and improve issues with products that are frequently causing products to be returned.
14. Consider Outsourcing Reverse Logistics
Third-party logistics (3PL) companies can help you optimise your reverse logistics processes as they already have the infrastructure and necessary software in place that is required to streamline your returns processes.
Outsourcing to a 3PL means you don’t need to worry about the complexities of reverse logistics and you can focus your attention elsewhere, such as planning improvements for products that are frequently being returned by customers.
SEKO Logistics: Your Reverse Logistics Partner
In today's digital commerce environment, taking a balanced and strategic approach to returns is essential. Implementing tailored solutions across the customer journey - from detailed product pages to simplified sizing guides to premium packaging - enables ecommerce businesses to reduce returns, please shoppers, and protect profits.
SEKO Logistics has deep expertise in streamlining ecommerce logistics processes, including implementing returns and recommerce solutions, by utilizing specialist technologies. For example, our MySEKO technology allows us to get a comprehensive understanding of your returns process and maximize the potential value we can provide our clients.
Contact us to evaluate your reverse logistics operations and implement customized solutions designed to reduce your return rates.
