The average brand on Shopify sees 80% of their customer return requests end up as refunds. This season brings joy and cheer and impulse purchases, it also marks the peak of holiday returns. As documented by Shopify, below are the top reasons why customers return products.
Here are the primary reasons customers return products:
-Size too small: 30%
-Size too large: 22%
-Changed my mind: 12%
-Style: 8%
-Not as described: 5%
-Defective: 5%
-Other or not specified: 18%
Navigating the holiday return window is a crucial aspect of customer satisfaction and retention. In this blog post, we’ll delve into strategies to transform your returns policy into a customer-centric experience that not only reduces friction but also enhances brand loyalty.
Loop has helped over 1,800 Shopify brands retain more than $900M in revenue. Loop is an exchange first returns platform for scaling Shopify brands.
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1. Understanding the Customer Perspective: To revamp your returns policy, it’s essential to first understand the customer’s perspective. Shoppers appreciate transparency, simplicity, and convenience. By aligning your returns policy with these values, you can create a positive and hassle-free experience for your customers.
a. Transparency is Key: Clearly communicate your return policy on your website, emphasizing key details such as time frames, eligibility criteria, and the process itself. Use straightforward language to avoid confusion and ensure customers know what to expect.
b. Simplify the Process: Streamline the returns process by offering an easy-to-use online portal where customers can initiate returns and track their status.
c. Provide detailed instructions on packaging and shipping making it as effortless as possible for customers to send items back.
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2. Extending the Return Window: One way to differentiate your brand during the holiday season is by extending the return window. This not only demonstrates confidence in your products but also accommodates customers who may need extra time due to holiday travel or gift-giving.
a. Flexible Return Windows: Consider extending the standard return window, especially during the holiday season, to provide customers with ample time to make return decisions.
b. Personalized Solutions: Implement a customer-centric approach by offering personalized return solutions, such as extended return windows for loyalty program members, VIPs and frequent shoppers.
3. Embracing Technology for Seamless Returns: Leverage technology to create a seamless and efficient returns process that enhances customer satisfaction. One of the essentials in a return management strategy is the implementation of automation. By automating the process with technology like Loop, customers enjoy immediate choices post-return, such as opting for cash refunds, exchanging for similar or different products, or receiving store credit. Loop is an exchange first returns platform for scaling Shopify brands. With Loop, the average brand will see their refund requests decrease to 60%. That’s a 20% savings to a brand’s bottom line.
4. Enhancing Customer Communication: Proactive and transparent communication is crucial during the returns process. Keep customers informed at every step to build trust and confidence in your brand.
Automated Updates: Set up automated email notifications to update customers on the status of their returns, from initiation to refund processing.
Feedback Collection: Encourage customers to provide feedback on their return experience. Use this valuable information to identify areas for improvement and showcase your commitment to customer satisfaction.
5. Turning Returns into Opportunities: Rather than viewing returns as setbacks, consider them as opportunities to strengthen customer relationships and showcase your brand’s commitment to satisfaction.
a. Easy Exchanges: Offer hassle-free exchange options to encourage customers to choose an alternative product rather than opting for a refund. Loop’s customer experience is designed to solve for return reasons 1-5 above (i.e. 77% of why customers return). Loop drives more exchanges than any other return app.
b. Post-Return Engagement: Implement post-return engagement strategies, such as personalized discount offers or exclusive promotions, to re-engage customers and turn a return into a future purchase.
Loop’s top competitors are Returnly, Happy Returns, and Narvar. However, they have built their return apps that only focus to support return reasons size too large or size too small (i.e. 52% of why customers return).
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Loop’s customer experience is designed to solve for return reasons 1-5 above (i.e. 77% of why customers return). Loop drives more exchanges than any other return app.
Lets also dive into the key metrics and derivatives one must not overlook while analyzing returns post BFCM and the holiday season as it can give insights into stock and product planning for the coming year.
i. Return Rates: Calculate the overall return rate as well as return rates for specific products or product categories. Identify any significant deviations from average return rates.
ii. Reasons for Returns: Categorize and analyze the reasons customers provide for returns. Common reasons may include product defects, sizing issues, or customer dissatisfaction.
iii. Product Quality Feedback: Use return data as a source of feedback on product quality. If there’s a pattern of returns due to product defects, it may indicate a need for quality control improvements.
iv. Return Processing Time: Assess the efficiency of your return processing system. Delays in processing returns can lead to customer dissatisfaction.
v. Return Shipping Costs: Evaluate the impact of return shipping costs on your overall expenses. Consider if adjustments to your return policy or shipping processes are necessary.
vi. Restocking and Refurbishing Costs: Calculate the costs associated with restocking returned items or refurbishing damaged products. This includes labor, materials, and any potential discounts on resold items.
vii. Return Trends : Analyze return patterns during this period to identify any seasonality or trends. This information can inform future inventory management and product development decisions.
viii. Return Fraud Detection: Implement measures to detect and prevent return fraud. This includes monitoring unusual return patterns or behaviors that may indicate fraudulent activity.
ix. Impact on Customer Loyalty: Assess the impact of the return process on customer loyalty. A smooth and hassle-free return experience can contribute to positive customer relationships.
6. Continuous Improvement: Use return data as a tool for continuous improvement. Identify areas where processes can be streamlined, and customer experience can be enhanced to reduce the likelihood of returns.
Analyzing returns provides valuable insights into customer satisfaction, product quality, and operational efficiency. By understanding the reasons behind returns and implementing improvements, DTC brands can build trust with customers and optimize their overall business processes.
In conclusion, transforming your returns policy into a customer-centric experience involves understanding and addressing customer expectations. By embracing transparency, simplifying processes, leveraging technology, enhancing communication, and turning returns into opportunities, e-commerce DTC brands can not only survive the holiday return window but thrive in it. A well-crafted returns policy not only reduces friction but also builds brand loyalty, setting the stage for long-term success in the competitive e-commerce landscape.
Interested to know more about post BFCM retention strategies, read our blog How to Seize the Retention Opportunity Post BFCM with Holiday Shoppers and Maximize CX for Your DTC Store: 12 Quick Strategies
At Smarte Digital Inc. we offer irresistible Q5 holiday offers that will help you and your team get to a winning start in 2024. To know more, book a free 30 min introductory call with us at https://www.smartedigital.com/contact-us
