Free and Flexible Returns Retain More Customers for Retailers

Updated on :October 16, 2023
By :Lisa Brian

Returns are a necessary evil, and retailers must accept that returns are unavoidable. The best way for retailers to satisfy their customers and retain them is to create a flawless returns management system, ensuring smooth, flexible, and free returns. This News Story Blog article highlights various strategies and tips retailers can adopt for customer retention through better returns management. It also discusses how inventory management software offering returns management tools can simplify returns management and benefit retailers.

The News:

  • In 2022, returns will emerge as the hot point of differentiation in retail.
  • 72% of shoppers said that they return products purchased online at about the same rate as they did before the pandemic.
  • Rebound Returns handles about 40 million returns transactions every year and saw its global returns volumes shoot up by 63% during the pandemic.
  • In 2022, retailers expect to get back about 16.6% of the total merchandise that customers purchased in 2021.
  • B2C retailer average return rates for in-store and online purchases hover around 9% and 20%, respectively.
  • Almost 80% of customers check the retailer's return policy before committing to a purchase.
  • The top three reasons customers gave for returning an item was that it didn’t fit (70%), the item was damaged or defective (65%), or the item didn’t match the description (49%).
  • 95% of customers returning a product buy from the same place again if they feel that the seller has made the returns process simple.
  • The value of online returns will rise to USD 7.6 billion by 2023, driven by clothing & footwear.
  • The global reverse logistics market is projected to reach $958.3 billion by 2028.
  • According to Invespcro:
    • 50% of online shoppers are dissatisfied with past returns processes.
    • 8.9% of products sold in retail stores are returned.
    • 67% of buyers check the sellers’ returns page before making a purchase.
    • 79% of consumers want free product return shipping.
    • 49% of retailers offer free product return shipping.

How did we get here?

#1. Why Is Returns Management Critical for Retailers?

A budget-centric buyer’s crucial concern typically is the product not being up to the mark or not satisfying the purpose after buying. Customers fear that the investment will be a waste and the product will become an unnecessary burden. Moreover, only if they get a full refund can they afford to buy another suitable product in its place. The concern is even more significant if the item is costly. Besides, returns are more common for certain products, for example, clothing, as sizing is a critical factor in clothing.

Here are the top reasons for customers seeking product returns:

  • Customers ordered wrong products or incorrect sizes.
  • The product delivered did not match the customers’ expectations.
  • The customer found that the item/product was damaged.
  • The customers realized that they no longer needed the product.
  • Due to process errors, the seller shipped the wrong product.

If a retailer does not offer returns or the returns process is complex and time-consuming, the customer feels stuck with the wrong product and will never opt to buy from the same store in the future. Customers thus prefer buying from sellers who allow them quick and easy returns with a full refund or exchange options. So, retailers must offer hassle-free returns to retain their customers. However, perfect returns management is cumbersome and perplexing for retailers and involves significant time and resources.

#2. Top Tips for Retailers to Enhance Returns Management and Retain Customers

Returns management is crucial for retailers in retaining customers and earning customer loyalty. Here is how retailers can achieve impeccable returns management and enhanced customer retention.

Ensure Smoother and Flexible Returns Process

Customers get frustrated when the product/item they bought turns out to be unsuitable and waste for them for any reason. If the product is not up to the mark, they develop an apprehension for the seller/brand altogether and typically avoid buying anything from that brand in the future.

By offering a smooth returns process, retailers can set an example for their customers, informing them that if anything goes wrong, the company will sort the matter in customers’ best interest. It sends out a message that the brand is customer-friendly and trustworthy. Providing a returns mechanism is not enough for earning customer loyalty; the retailers also need to ensure that the processes are smooth and hassle-free. For example, if a customer needs to spend hours or wait in very long queues in the returns department, even if the returns are processed, the customer will think twice before buying anything from that store again.

Additionally, sellers can offer the convenience of returns collection through drop-offs or collection centers. In eCommerce, top sellers offer returns collection at the customers’ doorsteps.

Provide a Clear Returns Policy

Customers prefer buying a product with a well-defined returns policy. It renders a sense of security to the customers. Retailers thus must draft and provide a crisp, clear, and transparent returns policy, written in a simple language that anybody can understand.

The returns policy should include all essential details that the customers would require, including which items are returnable, the maximum time duration allowed for requesting the return, whether a refund is allowed or just exchange, and costs involved, if any. It should also include other product-specific terms and conditions; for example, notify that buyers cannot return a fragile item after purchase if it is perfect when bought and gets damaged at the customers’ place.

Retailers can leverage data from past customer queries on returns to modify and improve the returns policy routinely. They can also prepare a summary of FAQs (frequently asked questions) for customer questions that the customer support team commonly encounters. The customers can refer to this and get more clarity on the process. It will reduce numerous hassles for the retailers, the staff, and customers, ensuring smoother returns management.

Returns Tracking and Free Returns Processing

When customers initiate returns, they do not wish to waste more time and energy on the unusable product and expect the returns process to be completed quickly. The best way to convince customers that the returns process is smoothly going and will be completed on time is to facilitate a returns tracking option to track the status as needed. Sellers can conveniently manage this by implementing reliable software tools like inventory management tools and order management software with returns tracking features.

Besides, if customers are made to bear the cost of returns, they feel cheated and lose trust. The shipping/handling cost burden on an already frustrated customer seeking returns would adversely impact customer retention and damage the seller company’s reputation. Thus, sellers must allow free returns.

Process Quicker Refunds Through Multiple Payment Modes

A seamless returns experience is not enough. Customers are apprehensive till their money is refunded back to them. Thus, quicker refunds are equally crucial in retaining customers. Perfect returns management is therefore incomplete without faster refunds processing. Retailers must ensure that their refund management is quick and convenient. It remarkably reduces customer frustration and builds trust for the retailer brand.

Customers also have their preferences for payments and expect to get their refund/money in their preferred mode. So, the retailers must also provide multiple refund options, for example, in cash, on customers’ credit cards, or popular e-wallets like Google Pay.

Offer Exchange Option

For some products, sensitive parameters increase the possibility of returns; for example, size is crucial in clothing. Even if the customer likes the dress they bought, a return is inevitable if the size does not match.

Retailers can offer exchange options to customers for such products. The exchange can either be for a different size in the same product (as in clothing) or a flexible exchange where the customer can buy anything in return from the same seller or store. Exchange policy not only satisfies the customers and adds convenience, but it also benefits the retailers as they do not lose business and do not need to refund the money back to the customer. The exchange option thus works as a perfect resolution for both the customer and the retailer.

Eliminate or Lower Controllable Returns

To reduce the burden of returns, retailers must find ways to eliminate or lower returns without annoying their customers. For this, they should seek detailed information from the customers about reasons for the return and improve the product/processes accordingly. Customer feedback is a handy technique for lowering controllable returns for retailers.

Additionally, software-based comprehensive data analytics can provide extensive insights into the reasons for returns for a range of products. Retailers can leverage such information to improve the product, lower overall returns, and enhance customer satisfaction.

Adopt Software and Technology

Retailers can implement easy and perfect returns management by deploying the right software tools and technology. The top inventory and order management systems like Megaventory, Orderhive, and Shipedge provide numerous returns management features for seamless returns processing, customer communication, and refund management.

Leveraging returns management tools can help retailers control the entire returns management lifecycle and better manage their customers. However, businesses must ensure that the inventory management system they choose offers all the necessary returns management tools.

#3. Returns Management Software to Streamline Returns Management

Inventory management tools typically offer comprehensive returns management tools to help retailers streamline and control the returns lifecycle. Here are the top advantages of using returns management tools for retailers.

  • Returns management solutions enable real-time access, tracking, and visibility into the various returns processes.
  • With the elimination of manual error, software-based returns management ensures higher accuracy.
  • The software reduces turn-around time and enhances overall operational efficiency for the company.
  • Retailers implementing returns management software witness a significant rise in the productivity of their employees.
  • The software ensures smoother and flexible returns management, thus conserving resources and reducing overall costs for the company.
  • Seamless returns management with simpler and quicker returns processing results in enhanced customer satisfaction and retention for retailers.
  • Customers’ trust and retention enhance brand reputation and profitability for retailers.

What’s Next

The drastic growth in online sales is magnified further with the pandemic. Explosive online sales add up to more merchandise returns. This shift is challenging and staggering for the retail players. While it is difficult to estimate what portion of returned merchandise is discarded, studies indicate that a more considerable portion only adds up to waste, increasing the costs and complexity for the retailers. Buyers should be aware of the return window for online returns and find out if the policy allows for a more extended returns period. Businesses must adopt a clear return policy and have proper systems to manage the returns. Consumers must buy mindfully and avoid buying items they are not sure of.

“The process of getting unwanted items back from consumers and figuring out what to do with them is time- and labor-intensive, and often kind of gross.”

Returns management plays a significant role in the retail sector. Any deficiencies in returns management operations can result in sellers losing customers and permanently mars their reputation, profitability, and business growth.

Accomplishing flawless returns management is feasible for retailers by leveraging inventory management software with extensive returns management tools on a unified platform. So, adopt the right inventory management system, enjoy hassle-free returns management, and boost business profits.

Lisa Brian
Lisa Brian

Lisa Brian is an Engineering graduate and a content writer with GoodFirms. She has 5+ years of experience in content writing and marketing. A tech enthusiast, Lisa loves to write about cutting-edge technologies and emerging trends in the software industry.

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