E-commerce returns: A complete guide for online retailers

If you run an e-commerce business, handling returns can be a daily challenge. After all, around 80% of online shoppers say they regularly return a purchase. Since returns are a fact of life for online retailers, your best bet is to turn it into a positive – both for your customers and your business. 

Your customers expect easy and affordable (or even free) returns. And you want to ensure an efficient, cost-effective, and easily manageable process. Fortunately, you can use a strong returns strategy paired with modern solutions to keep everything running smoothly on all fronts — from handling return requests to integrating shipping options and beyond. 

Read on to discover everything you need to know about e-commerce returns. You’ll also find links to our many in-depth articles on returns-related topics. Let’s get right to it!

Inside this guide:
– Why returns are a big deal in e-commerce
– Create a strong and balanced return policy
– Reduce return costs for your business
– Minimise returns with expert strategies
– Handle international returns with finesse
– Benefit from a smooth RMA process
– Optimise reverse logistics like the pros
– Use a return tool to boost customer satisfaction
– Make e-commerce returns a positive experience

Why returns are a big deal in e-commerce

It may seem counterintuitive to devote time and effort to simplifying returns. After all, if a customer returns a product, doesn’t it mean they’re unhappy with it? The truth is, customers return products for lots of different reasons. And at the end of the day, if you offer them a hassle-free return process, you turn a negative shopping experience into a positive one. 

In fact, research shows that 92% of consumers say they’ll buy again if the return process is easy. In other words, customer-centric returns are a must for building lasting relationships with your customers. And since most online shoppers fully expect to return products from time to time: 

• 72% say they almost always check the return conditions before ordering
• 65% claim they will abandon an order if clear return information is missing

That’s why it’s crucial to create a transparent return policy that addresses your shoppers’ needs.

Create a strong and balanced return policy

To build your ultimate return policy, you have a few decisions to make as to how you want to handle returns. Here are 5 key components that every return policy should cover:

1. Return period: How long will you give your customers to return an item once they receive it? In the UK, the legal minimum return period is 14 days. The 14-day return period is also standard in all EU countries. Many retailers offer their customers a longer period as a goodwill gesture, which gives customers more time to explore the product – and often get attached to it.
2. Return costs: Who pays for return shipping? Options include free returns — which customers love, but don’t necessarily expect — or paid returns, which enable you to pass costs onto your customers.
3. Return scope: Clearly define which products are returnable and which are not to avoid confusion. This includes considerations for perishable goods, hygiene-sensitive products, and custom-made items.
4. Return process: Simplify your return process for you costumers by including prepaid return labels and clear instructions. Use digital tools like an online self-service return portal to streamline the process and reduce customer service interactions.
5. Return, exchange, or refund: Establish a smooth process for returns, exchanges, and refunds. Ensure timely refunds and offer options like store credit to encourage further purchases.

Find out more and try our handy return policy template: How to write a return policy: Fewer returns & happy customers in 5 steps

Reduce return costs for your business

Returns can cut into your business’s margins if you don’t take the right measures to reduce costs. To find the right balance between customer satisfaction and cost control, many online retailers rely on tactics like these:

• Better carrier rates: Work with a shipping solution to secure pre-negotiated carrier rates suited to your business to reduce shipping costs.
• Paid return options: Introduce a return fee to discourage unnecessary returns and manage costs effectively for your business.
• In-store and drop-off returns: Encourage customers to return items in-store or at drop-off points to save on shipping.
• Insured returns: If customers are returning higher-value items, use shopping insurance to protect against loss, damage, or theft.
• Automated return process: Modern e-commerce logistics solutions like Sendcloud reduce labour costs and streamline your customers’ return shipping experience.

Learn more budget-friendly tips and tricks: 7 tips for online shops to reduce return costs

Minimise returns with expert strategies

The best way to lower your company’s return shipping costs is to prevent returns in the first place. Here are a few tactics that e-commerce retailers rely on to keep returns to a minimum:

• Optimise product descriptions and visuals: Ensure that your product pages are detailed and accurate, and include high-quality images and videos. This helps customers understand exactly what they’re buying so they don’t wind up ordering the wrong item.
• Improve delivery accuracy: Delivery issues, such as wrong items being sent or incorrect addresses, are oftentimes to blame for parcels being returned to the sender. Implement automated labelling and offer flexible delivery options to significantly decrease errors like these.
• Educate customers: Provide detailed product manuals and maintenance guides. Educating customers on how to properly use and care for their purchases can reduce returns due to misuse.
• Enhance customer communication: Keep customers informed about the status of their deliveries, especially for time-sensitive products. Timely communication can prevent returns caused by too-late deliveries.

These strategies not only help lower your return rate but also lets you improve efficiency for your business. Want to discover more options to minimise returns? Read more here: How to reduce returns in e-commerce with 10 effective strategies

Handle international returns with finesse

If your e-commerce business is targeting an international customer base, your return shipping policy must also account for their needs too. That’s why it’s crucial to have an international return plan in place. Here are important factors to consider to strengthen your return policy and strategy:

• Collaboration with international carriers: Use a shipping solution that leverages deals with international carriers for better rates and services. This helps in offering a variety of shipping and return options for your customers, making the process more budget-friendly and efficient.
• Local return centres: Work with local parties for return management to expedite the process and reduce costs. This strategy is particularly effective for high-volume return sectors like fashion, where quickly reintegrating returns into inventory makes a big difference.
  

Learn more tricks about international returns: 5 international returns tips for trouble-free processing

Benefit from a smooth RMA process

To keep local and international returns running smoothly and in line with your policy, it’s helpful to implement a ‘return merchandise authorisation’ (RMA) system. This is a way of keeping track of all returning items, whether they’re coming back for refunds, exchanges, credit, or repairs. 

The RMA process involves customers requesting returns, receiving an RMA reference number with return instructions, with all relevant information tracked in the shop’s backend system for smooth processing.

Why have an RMA process?

• Greater transparency and oversight, both for your store and your customers
• Saves time and resources by automating returns and data management
• Faster completion, so customer receive their refund or credit in no time, encouraging them to place a new order faster
• The opportunity to collect data that helps you further improve your product and return shipping experience so you continually enhance customer satisfaction

Find out more about this system: What is RMA? Benefits of Return Merchandise Authorization for e-commerce businesses explained

Optimise reverse logistics like the pros

Closely related to RMA is reverse logistics: this refers to the way a company handles returned products. Successful e-commerce giants like Amazon have mastered reverse logistics with customer-centric policies and efficient systems, setting benchmarks for the industry. 

Implementing robust reverse logistics is challenging, but by making the effort to put an effective system in place, you stand to gain key benefits such as maintaining customer satisfaction through better processing and minimising the environmental impact of your returns, which shows your brand’s commitment to sustainability. All while maximising the value of returned products and ultimately lowering costs.

Key elements of an effective reverse logistics operation

Want to learn how to set up a standardised, professional reverse logistics operation for your e-commerce business? Here’s what it entails:

• Product returns management: Assessing the condition and potential resale value of returned items.
• Refurbishment and recycling: Repairing or refurbishing items for resale, and recycling materials from products that cannot be sold.
• Inventory and data management: Keeping track of returned items and managing data efficiently to streamline the process.
• Customer service: Maintaining clear communication with customers regarding the status of their returns.

Learn more and find examples of successful reverse logistics processes: An e-commerce primer on reverse logistics and how to optimise them

Use a return tool to boost customer satisfaction

High return rates cost UK retailers around £18 billion annually. But if you’re able to make the process of returning items easy and hassle-free for your customers, it improves their satisfaction with your business. In fact, you could even think of some of the costs associated with returns as an investment in building a stronger relationship with your customers, which could lead to more repeat business in the future.

Strategies to get the maximum ‘return’ out of e-commerce returns

• Offer a better pre-sales experience: Boost pre-sales by providing better product descriptions that help your customers make more informed decisions. This not only cuts down on unnecessary returns but also provides a more engaging shopping experience.
• Display a clear returns policy: Your customers will appreciate the honesty and transparency of having straightforward information on how returns and exchanges are handled. Include a clear link to your returns policy on all your product pages and order confirmation emails.
• Leverage technology: Use returns management software like Sendcloud to streamline your returns process, offering features like a customer-friendly returns portal that aligns with your policy and simplifies the returns process for both the customer and your team.

Discover more strategies for enhancing customer retention with effective returns management: Boost customer satisfaction with the right returns management strategy

Make e-commerce returns a positive experience

With return rates soaring for online purchases, a well-planned returns strategy is a must. The best mindset is to think of returns as an opportunity. It’s a moment to offer better service to your customers – and a chance to strengthen their trust, so you drive repeat business. If you’re looking for more ideas on how to optimise your returns strategy, visit the E-commerce Returns section of our blog where you’ll find many helpful articles and resources. 

Thinking of modernising and automating your return process? An innovative e-commerce logistics solution like Sendcloud has all the features you need to give your customers and your team a hassle-free return shipping experience. With our returns management software, you’ll keep your return costs under control while also building customer retention — a double-win for your business!