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Free Returns, Return Shipping Paid

Introduction

Product returns are inevitable for an e-commerce business. Trying to avoid costly returns with a clunky returns policy will result in greater losses. So, a simple and transparent return policy is beneficial for an e-commerce business.

PiP iT Global Blog - Free Returns Pay, Paid Returns Cost

High return rate in e-commerce

Research shows that at least 30% of all e-commerce orders end up being returned, compared to just 8.89% of physical store sales. Factors contributing to this higher figure include:

  • Inaccurate / unclear product information
  • Incorrect products sent
  • Products damaged or not suitable for use
  • Unwanted gifts
  • Retours frauduleux


UPS data suggest that the cost of handling returns may vary from 20% to 65% of the total cost of goods sold. But a simpler return policy can reduce that figure.

 

Value in better returns

A study published in the Journal of Marketing showed that stores that offer free returns see customers spending up to 457% more than before the return. The reverse was also true, with repeat purchase expenses falling from 75% to 100% for customers who were asked to pay return shipping costs. A simple and free return policy clearly pays off by improving future sales.

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Best practices for better returns

Here are some best practices to reduce both the need for returns and any negative impact when they are needed.

  1. Create descriptive product data
  2. Allow and encourage customers to leave product reviews
  3. Invest in an order processing platform
  4. Authorize and encourage returns to warehouse or physical stores
  5. Create a centralized online returns portal
  6. Offer competitive return times
  7. Clearly communicate return policies
  8. Offer product exchanges when possible
  9. Gently handle the issue of fraudulent returns

 

Conclusion

Customers who are happy with a clear and convenient return policy are more likely to come back - and their business.

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Sources:

http://journals.ama.org/doi/abs/10.1509/jm.10.0419?code=amma-site

https://www.business2community.com/infographics/e-commerce-product-return-statistics-trends-infographic-01505394#hUm45j2iCV31tvsl.97

https://www.entrepreneur.com/article/279986

https://www.linkedin.com/pulse/e-commerce-returns-refunds-best-practice-guide-priya-nair?articleId=819835713720382615

https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/

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