How Poor Returns Policy Affects Your Bottom Line

24 October, 2018


For any E-commerce business, the idea that someone might want to return your goods is probably the last thing you want to think about. However, returns are a reality for those in the E-commerce world and rates can be high, especially in categories such as clothing. If you don’t have a clear and concise returns policy that makes it easy for customers to send items back then your bottom line could suffer as a result.



The importance of your returns policy

If you’re in the E-commerce business then returns are something that you can’t escape – returns are three times more likely for online retailers in the USA. Giving customers a fast and hassle free way to make returns can help to build brand loyalty and set you apart from competitors who don’t make it so easy. In 2016, only 65% of shoppers were satisfied with their experience of an online return/exchange so most retailers have a long way to go. Not only that but a bad returns policy can do serious damage to your E-commerce business - 62% of consumers would be unlikely to shop with a brand again if they have had a difficult returns experience.


Improving your returns policy

Given the importance of your returns policy to your customer relationships, it’s worth taking the time to ensure yours is clear, concise and effective.

  • Make it easy to find. Many shoppers will want to check the returns policy before making a purchase. If they can’t find it then you could lose the sale. Hiding a returns policy won’t make customers less likely to make a return, it will just frustrate them and create a negative experience of your brand.
  • Don’t use legal speak. Technically, the returns policy is where you’re setting out your legal terms of exchange and return. However, if you use a lot of baffling language and legal terms then you’re only going to confuse your consumer. Instead, make the language simple and keep it short. You should make it easy to find the most important information, such as what the return period is, how returns are handled and whether they are free or not.
  • Consider your returns period. One clothing company found that lengthening the returns period in the returns policy from 14 to 90 days actually caused the number of returns to drop while the number of purchases rose.
  • Get feedback on your returns. Customers who have experienced your returns process are the best people to ask about whether it works and what improvements could be made.


Benefits to a good returns policy

Investing in a high quality returns policy is a smart move that will help your business to meet customer expectations and grow its audience. Customers are now much more aware of their returns rights and keen to enforce them - 89% of customers review a return policy before making a purchase. So, you can save a lot of issues in the long run with a solid returns policy that sets everything out up front. Returns also have a crucial role to play in customer engagement which is, ultimately, what will dictate whether or not your brand is successful online. The better the engagement, the more positive impression customers will have of your brand and the more likely they are to return to shop with you – and to recommend that others do the same.

If your returns policy is lacking, or absent, then this can have a very negative impact on the potential success of your E-commerce business. However, if you take the time to create something clear that makes life easy for the customer then it could play a role in improving sales and increasing all important brand loyalty.

Source: Nchannel/RoyalMail/UPS


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