Inventory Management

Reduce Customer Returns with These Simple Measures

February 18, 2022 Comments Off on Reduce Customer Returns with These Simple Measures
reduce customer returns

All merchants want to reduce customer returns.

A certain proportion of product returns – or refund requests in the case of digital downloads – is for most merchants just one more cost of doing business.

But the cost of such returns – particularly for online sellers – is growing dramatically. In fact, 2020 saw the cost nearly doubling to more than $100 bn over the preceding year.

So for more and more merchants it’s no longer an option simply to accept the losses caused by returns.

Fortunately, there are some simple measures you can take to address the problem. And the first thing is to understand the most common sources of refund requests:

1. Honest Customer Error

Particularly when buying from an online store where they are confronted with a bewildering variety of options, customers may make a genuine mistake as to the nature of the product they are buying.

This issue is particularly prevalent in niches such as clothes and shoes, where customers will regard getting the right size and color as an essential element in the transaction.

It’s true that some customers will indulge in the dubious practice of “bracketing” – that’s to say ordering the same product in multiple sizes and colors, with the intention of returning those that do not fit perfectly or exactly match the colors shown in the online store. 

But your refund rate can nevertheless be drastically reduced by ensuring that your product descriptions are accurate to the finest detail. And that they are supported by high-quality photographs.

Poorly lit and fuzzy images obtained with your cellphone just won’t cut it in today’s highly competitive marketplace.

2. Product Arrived Damaged

This claim is one of the most common reasons for which a refund may be requested. It’s true that many of these claims will be examples of intentional “friendly fraud”, which normally results in an immediate chargeback filing.

But it’s also true that you can reduce the number of honest returns by putting in place some simple safeguards –  

  • All packaging should be double-checked before products leave your premises;
  • You should use only reputable and trusted shipping companies; and
  • Consider taking out shipping insurance. It may be worth the expense, depending on how much returns are currently costing you. 

Have an Open and Clear Returns Policy

Unfortunately, friendly fraud is very difficult to prevent, and the resulting chargebacks are tough to contest.

But a clear, generous, and detailed returns policy can go a long way towards preventing honest customers filing chargebacks.

As a minimum, your policy should set out –

  • The maximum time customers will have to request a refund;
  • The circumstance in which a refund will be granted, and the evidence, if any, that the customer will need to provide;
  • Who will be responsible for any costs – return shipping for example – associated with the process; and
  • What the process involves and what the customer needs to do by when.

Maintain Excellent Customer Service

It goes without saying that this policy should be clearly displayed and easy to find on your website, and highlighted in all communications.

But for best results you also need to ensure that you have your phone lines available during normal working hours, and that any voicemails are responded to as a matter of urgency.

Establishing and maintaining a human, personal relationship with dissatisfied customers, rather than relying on chatbots or other automated systems, is a key to building and retaining customer loyalty.     

Contact Us

Many of these principles may seem no more than common sense. But getting the best possible returns policy for your business requires considerable attention to detail.

So for expert assistance in the drafting, display, and implementation of your policy please contact us here.

We’ll be happy to help.