Turning Losses Into Profits: Tackling Online Product Returns With Innovation
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There are constants in life – absolute powers – and there are not. In regard to the operation of your ecommerce store, one constant is that it will take work. Another absolute power is that it will have its ups and downs, tribulations and setbacks.
Whether you’re a neophyte to ecommerce or a seasoned guru and veteran, it’s never too late to review an aspect of running your store that could be denigrating your profit flow. In this case, we’re talking about the unavoidable absolute power of customers returning products that they’ve ordered from your business.
While there may be nothing that you can do to prevent people from making returns, even if you can encourage a reduction in them, there are ways that you can better manage them. Modern online product returns software has actually crossed a bridge into new territory, making it possible to envision what were previously pegged as losses (from the returns you absorb) into realized profits that you instead earmark.
Keep reading, we’ll explain why and how.
Why You Should Stop Frowning Over Returns
Most e-retailers don’t smile when they check their orders in the morning over that cup of coffee and notice that several customers are displeased with their order for one reason or another and wish to make a return. But your smile shouldn’t be all upside-down, and here are a few candid reasons why.
Most customers are hesitant to return an online product. Still, about 30% of all products ordered online end up being returned by the consumer after the fact, according to one study on ecommerce returns management. Knowing this fact, you can look at other studies that show that customers who return items more frequently also make more purchases (thus netting you more profits).
Another factor to consider is that returns can be viewed as good advertising. Why? Because they attract a customer back to your store, even if to return a product, and they give you a chance to reconnect.
For instance, a customer that returned a product may choose to take store credit as opposed to a formal refund, which assures that they will still place a future order. In addition, a positive experience returning a product can convert a customer into a long time loyal shopper, one who tells their friends about how easy it is to shop at your ecommerce store.
These are but a few examples of how a generous and hassle-free returns policy can actually help increase your profit margins in the long run. That’s the key train of thought and mindset that you want to have here: long term profits and revenue goals.
What Your Customers Want
So what do your customers want from your online store? A few key statistics come right to mind. One, customers want a hassle-free returns policy (about 80% have said this in recent studies). Two, customers want few or no return processing or shipping fees. And, three, customers want returns to be fast and convenient.
If you can offer them all this, you actually have a good chance to increase your long term profits. But is this feasible to your bottom line and can you afford to offer hassle-free returns day in and day out without it chomping into your profit margins all that much?
No-Questions-Asked Returns Policies Generate Sales
An interesting article that was published on CNBC found some surprising results from a related study on returns management. The study followed two different ecommerce stores over two years. Both offered returns with varying degrees of fees and ease of use. The results found that the store that made returns easy and hassle-free actually increased customer spending substantially over just two years. The increase was shocking, estimated at over 300% per customer.
Tips on Integrating a Customer-Facing Returns Policy
If you are exploring your options with integrating a hassle-free returns policy into your ecommerce store, you will assuredly want to take a look around at what solutions are available to you for managing, projecting, processing and tracking the returns that come into your system.
A quick look around the internet shows us that many ecommerce shopping carts and online marketplaces offer some form of basic returns management. But to really get a full feature set you will want to have a look at a standalone online returns software solution as well.
Be sure that you compare the features, functions and price before you buy any software for your online store. Read online reviews and see what other users have to say. Ensure that the solution is fully compatible with your ecommerce store and shipper accounts to avoid any potential setbacks with integration.
Next, breathe easier knowing that you’ve made a smart move for your ecommerce business and its future retention and growth.
