Is your business suffering because of its returns policy?

Published on 09 February 2018 in  
Returns policy

Is your returns policy hurting your retail business?


With so much being bought online it is typical that users will occasionally want to return products for any number of reasons. This means as a retailer you must be ready to accept these returns. This doesn’t mean have enough cash flow to be able to refund the customer, or even to give them store credit (more on this later). You must have a plan to deal with the return as quickly as possible, providing a seamless returns experience.

The potential impact of not having a smooth returns process could be astronomical. 40% of users stated that they would not buy from that retailer again. This can be disastrous as we all know it is 5 to 25 times more expensive to acquire a new customer than it is to retain an existing one.

cash refund

It is the short-sighted retailer who refuses customers a cash refund.

The demands of today’s consumer are such that a refund of store credit may lead them to feel cheated. This could make them think twice before returning to shop with you again. Short term thinking suggests that giving store credit keeps the customer buying with you. This is not true as 95% of customers would shop again with a retailer if their returns experience was a good one.

As a retailer, especially when operating online where customers don’t have the option of talking to a person. It is especially important to show your returns policy as clearly as possible before someone decides to purchase. As many as 49% of shoppers will actively check the returns policy of a retailer prior to making a purchase. In the same way requiring customers to create an account before buying can put them off, offering a convoluted or restrictive returns policy, also creates a barrier to purchase.

A great example of this in the UK is that I recently bought some business cards for Zenkraft, there were two websites I could have bought them from, one didn’t have a returns policy listed, and the second gave a no quibble returns guarantee, so whether it was misprinted, or just wasn’t what I was expecting, even though the other website was cheaper, I bought from the second site simply because if anything went wrong I’d be able to send them back. This is so important, especially in this case for the retailer as I will definitely use them again.

Manage expectations and keep total transparency

According to e-commerce management platform Navar, the most important part of the returns process is transparency.

“Consumers are satisfied largely due to strong communication about package and refund status,” says Narvar about Amazon.

Enabling your customers to see the status of their return online, and keeping in touch via email is so important. Even though Amazon has more hoops to jump through before your return can be processed. Customers are more satisfied when kept in the loop by the retailer.

streamlined returns

So how can you streamline your returns process?

The demand for transparency, lack of restriction and speed of return/refund mean that the use of technology is a must.

You must be able to first allow your customer a simple and easy way to book a return with you. This means that the customer doesn’t have to call be on hold for 10 minutes. They want to be able to book the return on their computer, (or increasingly their mobile phone). Here are some things to think about:

  • Do you have a dedicated returns portal where customers can log in, or even just enter their order number?
  • How do you send your customers their return shipment label?
  • How do you let your customers know when their return will be processed/picked up and refund issued?

All of this can be done with the use of technology, have a look at this video we put together.

In the video, the customer is able to visit a returns portal. They can enter their order number and choose which product they want to return. The most important part for the retailer is being able to give a reason why they are returning it. This last feature allows the retailer the visibility over the reasons for returns. If the product is consistent of insufficient quality. The wrong size or color, the retailer will be able to make adjustments further up the chain.Once the return is booked automatically with the carrier company, the customer can print the return label or have it emailed to them.

Call centre returns

The Solution

Another way you could do this, especially if you have call centre facilities, or a customer service team, is to have customers call up to book a return with you. This way you can book the return over the phone and email them the label. This can only be done using technology and having customer data as well as shipping data available inside your CRM system.

The next stage will be to keep the customer informed as to when they will receive their refund. This will require you to email them, or SMS them, or even allow them access to the portal which will show them the status of the return. This is perhaps the most important part of the returns process. This is where the customer is in limbo between sending the parcel and receiving their refund. 29% of customers interviewed by Narvar were worried their return would get lost in the mail. This extra level of communication will be hugely important.

Finally processing the refund and restocking the product. This could perhaps be the most complicated of all of the processes as it involves so many moving parts. You may be using your CRM and accounting software to process the refund. Your ERP and inventory/warehouse management system will be used to restock the item ready for resale. Remember you also need to keep your customer notified of when their refund will be with them. Joining all of these dots again can only be done with Technology and applications such as Zenkraft and Salesforce.

At Zenkraft, we have developed a system which keeps all of your shipping data and customer data side by side. This means that not only can you generate shipments without needing to copy and paste data to your carrier company, completely eliminating any potential human error.

Are you a retailer? What is your returns policy? What have your experiences with other online and offline retailers been? Let me know below in the comments.