How to Create an Effective Returns Solution

Your customers aren’t going to be happy 100% of the time. That’s why an effective returns solution is essential – particularly for e-commerce providers. Acting as a trust-marker, returns policies have been shown to make or break a sale, and increase customer retention.

Allegro Logistics work with a range of UK SMEs and online retailers, delivering products domestically and across the world. We have years of experience handling the journey in reverse for e-commerce stores, taking the headache out of product returns management.

In this blog, we discuss product returns and explain how to create an effective returns solution for your e-commerce store.

Impact of Product Returns on E-Commerce Businesses

High levels of product returns can threaten the bottom line of SMEs and larger businesses alike. In the UK, it is estimated that online returns cost UK retailers £5.2 billion a year, and that a quarter of online shippers return 5-15% of what they buy.

In a survey, 58% of consumers admitted to bracketing – a practice of ordering multiple units of the same product in different sizes or colours with the intention of returning them. There is also the practice of wardrobing. In this instance, a customer will buy a product and use it once with the intention of returning it. This is particularly common when e-commerce stores offer free shipping and returns as it lowers the risk.

Whilst this information might tempt a retailer to offer an extremely strict returns policy, it is widely believed that lenient returns are essential for maximising purchases. In fact, 92% of customers buy again if they have a positive returns experience. Clearly, an effective returns policy is crucial for converting and retaining customers.

How to Reduce Product Returns

Of course, sometimes product returns are entirely the retailers’ fault – and these returns are the ones you can work to control and limit. For example, assessing and improving your manufacturing quality control process can help ensure products consistently meet the right standards. You could also look at your digital shopfront and make sure the product photography you have is accurately representing the item in question. It is important to make your products look desirable, but if the images are not representative of what the customer will actually receive, disappointment and a return request are inevitable. Finally, make sure you are working with a reliable courier or third-party logistics (3PL) provider to ensure your products are arriving with customers in once piece.

When it comes to the actual returns policy you implement, opinions are divided on what works best to reduce returns. Some say a shorter returns window works well to limit the volume. Others contend that a long returns window produces what is known as the ‘endowment effect’. This behavioural theory suggests that customers may have a harder time returning a product they have had for a long time because they imbue it with value.

What Makes an Effective Returns Solution?

An effective returns solution will provide security for your customer without threatening to undermine your business model. A key element of this solution is the returns policy. This policy will contain straightforward information setting out your returns process and should be easy to find on your website. This acts as a guarantee for the consumer that what they are buying is what they will receive, or they will get their money back. Under UK law, you don’t have to offer a refund if there is nothing wrong with the product, but the consumer no longer wants it. However, doing so anyway can boost loyalty and create a positive customer experience of your brand. Whatever you decide, be clear, be concise, and be consistent.

Another key part of an effective returns solution is your courier or 3PL. Working with a trusted partner ensures returns safely and quickly make their way back to you and enables you to deliver high standards of customer service. A 3PL will even be able to assess and manage returns on your behalf, taking the strain out of the whole process.

What is the Role of Third-Party Logistics in Supply Chain Management? >

How to Create an Effective Returns Solution

Set Defined Window

A survey found that more than half of online consumers expected at least a 14-day return timeframe. Decide what window you are realistically able to offer and shape your returns process around this.

Define Condition of Returns

Your policy needs to set out the expected and accepted condition of products sent back for a refund. This ensures your customers take care when sending products back and are more likely to reach you in a suitable condition for resale, minimising the financial impact.

Decide Type of Return

Will you offer a full refund, in-store credit, or both depending on the circumstances? Outline what you are prepared and able to offer in a range of different situations, ensuring this is fair for all involved.

Create Clear Returns Policy to Explain & Promote This

Once you have ironed-out all these details, you need to write it all down in a returns policy, so your customers are aware. As mentioned, this should be clear and concise, with nothing confusing or open to interpretation. This done, you should promote the policy and make it easily to access on your website. Not only will this be a potential selling point for customers, but it will cover you in the event of a misunderstanding.

Need help working it all out? Learn more about our returns service.

Track Returns Data

Data equals good decisions, so make sure you’re tracking yours. Warehouse management software (WMS) can provide you with accurate insights into the rate of your returns and the reasons behind them. As a result, you’ll be able to identify if there is a problem that needs to be addressed. For example, if products are regularly being returned for being poor quality, it may be a sign you need to overhaul your manufacturing process. If products are regularly being returned because they are not as expected, perhaps it is your product photography and descriptions that need finetuning.

Consider Outsourcing

Enlisting the help of a leading e-commerce fulfilment provider can help safeguard the effectiveness of your returns solution. They’ll be able to handle every aspect of the reverse logistics on your behalf, making sure it is efficient and reliable. Once the item is back in the warehouse, your 3PL can even act as gatekeeper – evaluating and inspecting the products to ensure they meet your criteria.

See more: Benefits of Outsourcing Logistics >

Returns Management & E-Commerce Fulfilment with Allegro Logistics

Allegro Logistics is a leading UK e-commerce fulfilment provider. We work with businesses in a range of retail sectors to take complete guardianship of their supply chain and oversee their returns process. If you’re looking to upgrade your fulfilment, we can work with you to define the right solution.

Get in touch to find out more!

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Read next: Should Your Business Outsource its Order Fulfilment?

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