If you’re doing business in the e-commerce space, returns may be your biggest nightmare.
Returns can be detrimental to your company’s profitability but not offering them is a sure way to lose potential customers. Making the process difficult is another sure way to lose future business and return customers. And then there’s the especially challenging issue of exchanges.
Fortunately, you can minimize the negative effects of returns by implementing effective returns management strategies.
How Returns Are Killing e-Commerce
Shopify, the popular online shop hosting platform, called e-commerce returns a disease that are “aggressively attacking profit margins, gutting conversion rates, and ultimately threatening [online] business.”
The reported return rate for brick-and-mortar purchases clocks in somewhere around 10% or below. E-commerce return rates on an overall average are at least 20% but those numbers skyrocket for high-priced products (50%) and during the holidays (30%).
Return shipping costs alone are projected to hit $550 billion annually by 2020. Now consider the costs related to processing returns, restocking inventory
Why e-Commerce Businesses Must Facilitate Returns
Unfortunately, businesses selling via e-commerce platforms have no choice but to make the return process free and easy for prospects, otherwise they’ll rarely choose to make a purchase.
In fact, approximately 70% of consumers report being hesitant to purchase from an online seller that makes them pay for return shipping. Imagine how many fewer sales you might make if you assess a restocking charge or, worse, don’t accept returns at all.
Almost one-third of consumers admitted to not buying from an online seller because it was difficult to locate the company’s return policy.
What About e-Commerce Exchanges?
Another common problem with online sales – and one that seems to plague a large segment of the industry – is exchanges. Many online sellers will accept returns but refuse to allow exchanges. Instead, they refund the original purchase and tell the customer they must make a new purchase.
Almost 60% of consumers reported that they replaced the last item they returned. If you’re not offering easy exchanges for your customers, how likely do you think they are to make that replacement purchase from another source?
Using Reverse Logistics to Improve Your Returns Business
If you can tame the returns nightmare through comprehensive management and cost-controlling measures, you accomplish three key goals.
First, you reduce the drain on the bottom line and improve profitability. When you have tracking and controls in place, you can leverage the data you derive to improve the quality of your products, fine-tune pricing, maximize asset recovery and improve the efficiency of your operation.
Second, armed with the knowledge that you have the processes and costs under control, you can offer prospects the type of return policies they need to purchase with confidence. You’ll increase sales and establish your brand as being trustworthy and transparent.
Finally, you can use your returns management program to facilitate the process for your customer. It’s fine to have a customer-friendly returns policy but, if they have to jump through hoops to accomplish their goal, it won’t sit well. When they have a simple, straightforward way to return a purchase, they will remember the great experience they had with you – and reward you accordingly.
The ReverseLogix returns management platform helps you achieve all these objectives in one intuitive SaaS application. This full-service reverse logistics solution helps you improve the customer experience and garner loyalty – not to mention great ratings.
Contact us today to see this powerful solution for yourself. We look forward to helping you solve your e-commerce returns problems.