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E-commerce returns: Give the customers what they want

Solving the reverse logistics problem is a key part of growing digital sales

With e-commerce returns growing, retailers have plenty of opportunity to make shoppers loyal customers. (Photo: Pexels/Rodnae Productions)

With 60% of consumers willing to break up with a brand over a bad customer experience, the ability of brands to manage the e-commerce customer’s journey has never been more important.

Shippo, an e-commerce technology company that brings together technology, fulfillment and carrier partners, surveyed 1,000 e-commerce customers to find out what is most important to them when it comes to returns. Retail returns from U.S. online sales jumped to 20.8% in 2021, according to data from the National Retail Federation, and with e-commerce expected to  pass $5 trillion globally in 2022, there is plenty of opportunity for brands and shippers to succeed — or fail.

“Retailers simply can’t afford to stick their heads in the sand when faced with the complexities of consumer e-commerce returns,” Shippo wrote in the 2022 Returns Survey report.

According to respondents, more than 85% of online customers returned at least one item in the past six months, with 75% returning between two and nine items.

Rules matter

For many consumers, Shippo found that the return rules put in place by the brand actually impact the initial sale. An overwhelming number of respondents — 84% — said they will read the return policy before making a purchase, and 44% of those people will look for an alternate product or retailer if they do not like what they see. 

“Your return experience begins and ends with your policy — including how and where you communicate it — and while there is no one-size-fits-all, our survey findings do show that a consumer-friendly policy can really make a difference,” Shippo said.

The post-purchase experience is equally important — and a potential revenue opportunity for retailers. Preprinted return labels are important to 30% of consumers, but one-third of U.S. consumers don’t have a printer at home to do so. To combat this, including a preprinted return label could ease the experience, yet just 3.5% of merchants do so.

“Nearly all consumers we surveyed said they would be more likely to purchase from an online retailer or brand that offers free returns. Free returns have become table stakes — or, at the very least, one of the most attractive competitive advantages — and we predict this will only become more true as e-commerce sales grow,” Shippo said.

Return to store

Many merchants attempt to bring consumers into their physical stores for the return, and when they are successful in that approach, 83% of customers will end up shopping in the brick-and-mortar. A little more than 25% actually spend more in the store than they did in the initial e-commerce order. Consumers, though, generally do not want to make returns in store, with just 14% saying that is their preferred method. Most want the preprinted label, but a QR code or no label at all (22%) for leaving at a drop-off location is also considered a convenient option.

When it comes to initiating the return, 39% prefer to start the process online and use a preprinted return label sent with the initial shipment. Contacting a customer support representative is the least preferred method (41%) to initiate a return.

The increasing number of returns is being driven by not only the overall growth in e-commerce but a trend called “bracket buying.” Bracket buying is when consumers purchase multiples of an item, usually clothing, in various sizes or colors with the intention of returning the items they don’t want. Fifty percent of consumers said they engage in bracket buying, with 42% of those making a return doing so because an item didn’t fit.

To combat this, Shippo advised retailers to make efforts to answer questions on items — including sizing — beforehand.

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“You might also consider including photos of what different colors and sizes look like on a variety of models, or source and surface UGC (user-generated content) to complement text-based product reviews, offering more visual examples of products to your customers,” the company noted.

Conversely, since consumers increasingly expect a smooth e-commerce experience from order to return, Shippo suggested some retailers may find success in automatically including or offering to include multiple sizes in each order.

“While this may not be the right avenue for every e-commerce merchant, it can help retailers seeing more frequent returns preempt some of the associated challenges by building them directly into the customer’s journey,” Shippo said.

As with many things in life, Shippo found that communication is a key to happy customers. The survey found that 96% of consumers were more likely to purchase from an online retailer if it offered free returns. Additionally, 91% of consumers said the ease of returns impacts their decision to shop with that retailer again. Shippo said “communicating a consumer-friendly policy can open a new door towards building a stronger customer base, generating more revenue and accelerating business growth.”

The report advised that ignoring the returns experience is a negative for retailers.

“It’s clear that, as with other touch points across the full e-commerce journey, consumers are looking for flexibility, choice and — most importantly — simplicity when it comes to returns and exchanges. Long story short: By offering an easy and seamless end-to-end experience that meets your customers’ needs and expectations, you’ll be well-equipped to drive more long-term e-commerce business success and growth,” Shippo said.

Click for more articles by Brian Straight.

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Brian Straight

Brian Straight leads FreightWaves' Modern Shipper brand as Managing Editor. A journalism graduate of the University of Rhode Island, he has covered everything from a presidential election, to professional sports and Little League baseball, and for more than 10 years has covered trucking and logistics. Before joining FreightWaves, he was previously responsible for the editorial quality and production of Fleet Owner magazine and Brian lives in Connecticut with his wife and two kids and spends his time coaching his son’s baseball team, golfing with his daughter, and pursuing his never-ending quest to become a professional bowler. You can reach him at [email protected]