To charge or not to charge: how to adjust your return policy
Both sides have valid points, which is why it is important to strike a balance between operational efficiency and customer satisfaction
In the last couple of years, the debate of charging for online returns has sparked considerable discussion among both retailers and customers. Some industry players are of the opinion that return fees mitigate costs and deter frivolous returns, while others argue that such policies jeopardise customer satisfaction and brand loyalty. Both sides have valid points, which is why it is important to strike a balance between operational efficiency and customer satisfaction.
Online retailers would be wise to capitalise on their insights gleaned from return optimise, as it stands to identify patterns and trends in your consumer base’s return behaviour. In 2022, roughly 17% of online purchases were returned, highlighting the scale of the issue. This first step approach not only minimises the likelihood of future returns, but also enhances overall operational efficiency – laying the groundwork for sustained growth and profitability.
However, the imposition of return fees has its drawbacks, as it risks alienating customers and tarnishing brand reputation. In an era defined by consumer empowerment and choice, any barrier to the return process may be perceived as an impediment to convenience and flexibility.
Research also indicates that a sizable portion of consumers actively avoid retailers that charge for returns, underscoring the potential repercussions of such policies on customer acquisition and retention.
To navigate the complexities of return policies, ecommerce retailers must prioritise enhancing the customer experience. While charging for returns may offer short-term financial benefits, it must be evaluated within the broader context of brand identity and consumer sentiment.
At its core, the omnichannel experience hinges on seamlessly integrating digital and physical touchpoints – fostering meaningful interactions that transcend transactional exchanges.
Central to this approach is the principle of customer-centricity, where every decision is guided by a steadfast commitment to meeting and exceeding the evolving needs of shoppers. Rather than viewing returns as a burdensome money pit, you should embrace them as opportunities for engagement and relationship-building.
If you decide to implement a return fee policy, a strategic approach is essential – here are some steps to help you come up with your own:
Customer communication: Clearly communicate the return policy changes to customers through multiple channels, including email, website notifications, and during the checkout process. Transparency is key to maintaining trust.
Gradual implementation: Consider a phased approach to introduce return fees. Start with a pilot programme to gauge customer reactions and adjust accordingly.
Incentivise in-store returns first: Offer free returns for items brought back to brick-and-mortar locations. This not only reduces return shipping costs, but also drives foot traffic – increasing the likelihood of additional in-store purchases.
Offer membership programmes: Provide free returns as a perk for loyalty programme members, as membership programmes have the potential of driving significant revenue, as engaged customers tend to spend more. Research from McKinsey and Co showed that shoppers enrolled in free loyalty programmes spend 30% more than non-members, and 60% more if they pay for a membership.
Leverage data analytics: As mentioned previously, find a way to monitor your customers’ return patterns to help you tailor your return policies in the future.
Educate customers: Encourage customers to make informed purchasing decisions by providing detailed product descriptions, sizing guides, and customer reviews. This can reduce the likelihood of returns.
As online shopping continues to redefine the retail landscape, the path forward lies in striking a delicate balance between operational efficiency and customer-centricity, where returns are not viewed as liabilities but as catalysts for growth and innovation.
It is also true that consumers have become accustomed to free returns, but as more retailers introduce fees, shoppers may just need to adjust their expectations. The challenge lies in implementing these fees in such a way that customer dissatisfaction is minimised.
