The Ultimate Guide to e-Commerce Returns

Sarah Fedida
Fetchy Digital Manager. Always here to share with you the best infos
September 9, 2020
Revenue, Profit, customer service, SEO, Customer Experience, Design, UX, Shopping Cart, Social Media

E-commerce return is the process of returning a product previously purchased online by a customer to the retailer in exchange for another item or refund. Since most online buyers cannot touch or feel the product prior to making the purchase, they are buying blindly while having it at the back of their minds that there are lenient return policies available at their disposal to make a return in case they are not satisfied with the product.

E-commerce revenue is expected to increase to $2.1 trillion in 2018 but an estimated one-third of all online purchases are usually returned. Statistics show that 20% of apparel and soft goods are returned and 50% of expensive products bought online are normally returned. E-commerce retailers spend about 8.1% of their total sales revenue on the reverse logistics of returns including accepting back damaged, unwanted, spoilt or fake products.

In most cases products are returned for various reasons such as a damaged product, wrong item, products not matching their online description, items damaged in transit, fraudulent returns, or product of different colors and sizes from what was originally ordered by the customer on the e-commerce platform.  

What gives you an edge over others especially in the minds of your esteemed customers is how you efficiently manage your e-commerce returns policy. The success you will record as an e-commerce seller is dependent on the effective e-commerce returns policy because it will go a long way in preserving your customers’ loyalty and retention. This will, in turn, boost the profitability of your business.

The best way to have a mastery of your returns policy is by fortifying yourself with the most relevant e-commerce returns facts. Some of these are listed below:

  • At least 63% of the buyers usually read the online product policy before a purchase is made.
  • More than 81% of buyers want a convenient returns policy devoid of the hassle of a return shipping cost.
  • Almost one-third of all products bought online are returned by the buyers.
  • Sales increase by 35% when free returns are provided by the sellers.
  • 83% of buyers are discouraged to make a future purchase when return shipping is charged.

The statistics below show the major reasons behind returns:

  • The difference in the appearance of the products accounts for 22% of returns while damaged items being received by the buyer accounts for 20% of returns.
  • In most cases, about 65% of the returns are actually the fault of the retailers while the remaining 35% lies with the customers.
  • Failure on the part of the retail seller to offer easy returns or free returns shipping is due to a number of reasons. Based on the above information though; difficulty in returns restocking fees and returns shipping fee are the major challenges on the wheel of the e-commerce business at large.

While drafting your e-commerce returns policy, it is pertinent to know the numbers of buyers that are interested in reading it. The content of the returns policy influences about 80% of your sales and also about 62% of buyers will actually take their time to read the content before taking a decision on whether or not to buy from your e-commerce platform.

  • 50% of buyers assume that returns should be easier to make online.
  • 42% of buyers are usually satisfied with the procedure for making online returns.
  • 86% of buyers want a return shipping label offered by an e-retailer.
  • 68% of buyers perceive free shipping a positive buying experience.
  • 67% of buyers read your return policy before making a decision to buy.
  • 63% of buyers are not happy and unwilling when having to pay for return shipping fees.
  • 52% of the buyers want to have the shipping label included in the box.
  • 51% of buyers will not purchase a product if the return shipping label is not included in the box.

Generally, returns are never a good omen for any e-commerce seller but there is no way you will avoid experiencing it in your business entirely. However, you can limit it if you can make the process of e-commerce returns not difficult for your buyers on your e-commerce platform. Owing to this reason, in the course of designing your return policy, the following tips must be borne in mind. They will create an avenue to provide your customers with services that will make you enjoy their repeated patronage and earn their long-term loyalty.

  1. Building great product data: one of the major reasons for e-commerce returns is the disparity between the customer’s specification and what is delivered to the customer.  As an e-commerce seller, you should always endeavor to bridge this gap by creating product data that does justice to your product. Also, work on your product title, detailed product description, and size guide etc.
  2. Encouraging product reviews: this allows new buyers to make a more informed purchase decision by encouraging existing buyers to leave their reviews on your product pages.
  3. Communication: you must ensure that your return policy is clear, precise, easy-to-read, and well defined. Explain its workability, what can be returned, the date of return after purchase, and any associated guidelines and restocking or return shipping fees. Based on statistics, 58% of buyers prefer a no-questions-asked return policy.
  4. Managing fraudulent returns: despite your best precautionary measures, the prospect of fraudulent returns is inevitable. It normally accounts for a small percentage of total returns and this can be controlled with the right policy.
  5. Convenience: online shopping makes purchase easy, fast, and convenient. Consumers derive pleasure in sending products back with ease and convenience. As an e-commerce seller, always endeavor to offer your customers an easy way of processing a return from your website and have a return shipping label printed.
  6. Pricing: based on statistics, over 80% of buyers prefer free return shipping and with no restocking fees while buying online. Therefore, always provide free shipping return and do not charge restocking fees as an e-commerce seller.
  7. Flexibility: there must be an element of flexibility with your return policy. This can include offering at least 30 to 45 days for returns. Your return policy should be flexible enough to give customers the confidence needed to make the purchase from your online store and consequently you will enjoy their constant patronage and earn their loyalty in return.
  8. No hidden return cost: there is nothing worse than getting hit by hidden cost. All cost involved in the e-commerce transaction should be well spelt out.
  9. Having knowledgeable employees: your employees must be updated with your return policy processes in order to assist the customers effectively.
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Offering your customers a difficult experience when returning products will prevent them from patronizing you in the future. However, a good refund policy influences purchase decisions, especially if customers are not 100% sure at the checkout. A comprehensive e-commerce return policy can make or break a sale or turn a visitor into a lifetime customer. As an e-commerce retailer, how a potential buyer’s common question regarding what you will do when they make returns is the biggest contributor to a sale.

A return and refund policy is the agreement that informs the customers about your policies regarding the returns and refunds. It should include the following information:

• How many days they have to return a product• How the refund will be received by the customer (either credit or product's replacement)• Who will pay for the cost of shipping to return the product?

The return and refund policy will create a traditional policy for your e-commerce store. It is imperative to have a return and refund policy page on your platform where the customers will be informed about their rights to refund. These 3 legal agreements must be embedded in the return and refund policy of your e-commerce platform;:

1. The return and refund policy agreement: this will inform users about your policy on returns and refunds.

2. The privacy policy agreement: this is required by law. Endeavor to have this agreement to inform about your privacy practices and the kinds of personal data you collect from the users. For example, emails address and names. You are required by law to have this agreement on your e-commerce platform.

3. The terms and conditions agreement: this agreement will allow you to set the rules and guidelines for the users when they register an account on your e-commerce platform.

It is generally believed that retailers with hassle-free return policies record greater sales and profit.

A clear return, refund, and exchange policy indicate that you, the online retailer, stand by your product and pride yourself on a stellar customer service experience. By creating a comprehensive policy for returns and exchange you will instill confidence in yourself, business, and your products. Trust and confidence have a great impact on your bottom line as an e-commerce retail seller.

E-commerce retailers are extensively advised to adopt simple, transparent, and generous return policies that boost customers’ confidence and trust. Customers’ confidence can be improved and boosted by adopting automated online product returns that is devoid of fuss.

With complete automation, buyers are expected to visit your website and are able to process a return in just a few minutes. Empirically, a customer-focused returns policy has great influence on repeat purchases and customer lifetime value. Having developed a comprehensive return policy can ultimately reduce the resources you spend on returns and gain customers loyalty and patronage.

To help you build and stand in your return policy you need to negotiate very attractive shipping prices with your courier(s) or shipping solution. Here at Fetchy, with no engagement and no subscription you can enjoy of very competitive prices with top domestic and international couriers, so you can be assured to respect your standards without killing your margins.

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