Four Ways Retailers can Reduce Return Rates

Ally Feiam By Ally Feiam | 27 Aug 2019

Fashion retailers in an e-commerce landscape deal with a multitude of issues: constant updating of stock, speedy delivery and handling an influx of returns. 

Of course, not all retailers are made equal. Brands such as The Iconic offer free returns for 30 days after purchase and ASOS provide free returns for its exclusive membership club. However, with these great perks for customers comes an issue for retailers. Some customers take advantage of the ease of returning goods, only to have retailers losing money from the backend. So, how can retailers reduce the number of returns that hit their shelves?

According to a study by Yotpo, in the U.S alone, $351 billion worth of products are returned to retailers every year. With this in mind, 88.3 per cent of those shoppers has made a return at some point in the last year.

According to the research, 66.1 per cent of shoppers purchase more than they planned, purely down to the retailer’s returns policies. While this doesn’t seem like a huge deal, the costs of these returns can cause a bit more than a headache for the retailer.

In this report, 50.7 per cent of shoppers say they’ve returned between $50 – $500 in fashion and apparel over the last year. In the Power Retail Spotlight Series report on Returns, it’s found that 74 per cent of Australian online shoppers ‘expect retailers to offer free returns on all items to entice them to shop exclusively online’. In fact, 41 per cent of Australian consumers would choose free returns over a range of other desirable options, including next day delivery.

Of course, as most retailers know, free returns aren’t really free. Sure, the customer doesn’t pay a cent, but the retailer certainly does. According to a study by ECR, a ‘reasonably expensive item’ that retails at about £89 ($162), would hold a cost of £3 per item from various ‘overheads if there were no returns of the item’. At a 20 per cent rate of returns, which is the average for e-commerce, the cost of returns rises to £11.

So, How Can We Reduce the Rate of Returns?

For most customers, there is a black and white reason why they wish to return something. An ill-fit, incorrect colour or wrong size are the three major causes behind a return.

Fit and quality issues, according to this research, prompt 78.7 per cent of shoppers to send back their goods, while 48.6 per cent of them send back their items because it looks different online as it does in person.

Photos are Important

For online retailers, using imagery that captures the product to the best of its ability is critical. 92.7 per cent of online shoppers say that customer photos are ‘important’ or ‘very important’ when it comes to purchasing. If you’d like to go one step further, adding a video fo the product can instantly improve the return rate of an item. The customer can see the product in action, the fit and length, and the colour perfectly on the screen.

Descriptions are Key

Even the most basic information can be a deal maker or breaker for customers. According to the report, 97.9 per cent of shoppers say that a detailed product description plays a huge role in purchase decision making. From the size and specs of a product to the exact shade of the item or fun tips for styling, the more detail you provide, the better.

Displaying Reviews

If a website offers reviews, customers are more likely to read them and make the decision to purchase on their own accord. Reviews with words alone work well, but for an insightful and immersive experience for shoppers, opt for a review with images – this provides a comprehensive idea for the customer about the product on different body shapes, heights and what it looks like on ‘regular people’ (i.e. without photoshop or studio lighting).

Create Quizzes

This idea may come out of left-field, but creating a quiz that helps the customer establish exactly what they want may be the answer you’re searching for. Providing a series of questions and options, this is an interactive and fun way to help the customer establish what they’re after, and find the right size for the item they wish to purchase.

At the end of the day, providing customers with as much information as possible is the easiest way to prevent an overriding amount of returns. Ultimately, it’s a win-win for both the shopper and the retailer – they get a great product, and you don’t have to lose profit from endless returns.

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