How to Prepare for the Most Returns You’ll See All Year
Editor’s Note: This article is a guest contribution from Alex McEachern, marketing manager at Loop.
In the two-month period after Black Friday Cyber Monday (BFCM), returns are 83 percent higher than an average month. At Loop, we refer to this as Returns Season. And if you’re not prepared for the influx of returns after the holidays, it can overwhelm your support team, create a terrible customer experience, and even eat into your profitability if you need to refund too many customers.
After all, it’s not about what people buy for the holidays, it’s about what they choose to keep.
The biggest names in ecommerce use these three strategies (and you can too) to make sure that returns don’t ruin their holidays.
1 | Create an on-demand return portal
An on-demand return portal allows customers to start a return on their own, without needing a member of your team to be involved. Everything that your customer service team would normally check—like item eligibility, return windows, and more—is done automatically.
This is a tip that can help a brand of any stage of their growth, but it’s especially impactful for teams that are built lean and don’t have a team of support agents ready to handle the increase in holiday volume.
If you’re working for a brand that’s handling your returns manually, don’t worry—you’re not alone. In fact, two out of every three Shopify brands require that their customers email their customer support team to start a return. When return volume almost doubles after the holidays, processing returns manually becomes a huge drain on your team and results in customers waiting for long periods of time to get a refund or make an exchange for the right product.
Think about the last time that you had a product in your hands that you needed to return. You felt vulnerable knowing that you were relying on someone else to get the right product to you. That vulnerability quickly turns into frustration if things aren’t resolved fast. An on-demand return portal lets your customers get a resolution quickly while saving your team a TON of time.
2 | Make a gift exchange easy
Alright, that first one was pretty basic for the high-growth brands out there—because once you’ve scaled to a certain size, you’ve likely already put a return portal in place. Once you’ve removed the time burden from your team, the next step is to make sure that post-holiday returns are exchanges instead of refunds.
When you issue a refund, the customer that you worked so hard to acquire can now easily take that money and make a purchase from another brand. Given how hard you and your team work over the holidays, that’s a big miss.
The easiest way to alleviate returns is to turn them into exchanges by providing every customer with a simple way to process the exchange. It retains the revenue you’ve already generated and can help the customer find what they’re looking for.
52% of returns on Shopify are because of sizing related issues.
Of all the returns that happen on Shopify, over half of them are because the customer bought the wrong size. That means they’re just looking for a variation of the product that they’ve already purchased—and just imagine how sizing issues increase when your customer is buying a gift for someone else.
You can make exchanges easy during the holidays by using gift exchange functionality in your returns solution software—it allows the gift receiver to initiate an exchange instead of issuing a refund to the gift purchaser.
By putting the gift receiver in control, you create a better customer experience while also making things much easier for your support team—and retaining the profit from the original sale.
3 | Turn returns into an upsell opportunity
Turn returns into an upsell opportunity. Yes, you read that correctly. Not only can a strategic return process help you retain more of your sales through the holidays, but it can also become an additional revenue driver for you. And with the return season seeing an 83 percent increase in returns, it’s the most opportunistic time to leverage something that we call Shop Now.
Shop Now allows your customers to use the value of their return to purchase anything in your product catalog and pick something new just like if they were shopping. The customer can choose whatever they like… even if it’s more expensive and the upsell revenue is collected directly in the returns experience.
Brands can incentivize this behavior by offering their shoppers a monetary bonus credit to apply towards their order if they decide to exchange. Brands that use this bonus credit strategy are actually generating $1.95 per return in additional upsell revenue.
In fact, Amour Vert uses this strategy to encourage its customers to keep shopping instead of asking for a refund, which also can help to increase average order value (AOV) as shoppers are likely to find more items that they might like to purchase the second time around.
Incentivizing an exchange over a refund is a proven way to drive customers towards the best outcome for your brand. There are a few additional ways you can do this:
- Offer a longer return window for an exchange.
- Offer free shipping on exchanges ONLY and not refunds. We have seen this reduce refund rates by 25 percent with minimal pushback from customers.
- Make exchanges faster by approving them when scanned in at the post office rather than when the item gets back to your warehouse.
Most brands have a return policy and process that is optimized for refunds. However, when you optimize for an exchange (even for a new product) you are able to turn what is traditionally viewed as a cost center into a new revenue stream.
Don’t let returns ruin your holiday sales
With this holiday season expected to be the biggest online shopping season in history, it’s important to make sure your return policy and process are ready.
Remember: It’s not about what you sell during the holiday rush, it’s about what your customers choose to keep. If you create the right returns experience, your customers will be more willing to make an exchange, your support team will have more time, and you can create a new revenue stream during Returns Season that gives you a profitable start to the new year.
Looking for more advice on how to prepare your business for the holidays?