6 (Not 5) Easy Strategies to Prevent Costly Returns

Emily VuittonCustomer Service2 Comments

How to Prevent Returns and Recover Revenue

Consumers return products for all types of reasons, from legitimate to frivolous. Understanding the reasons behind a return does wonders in expanding retailers knowledge of how to prevent them in the future. In an article recently published on Entrepreneur, Peter Sobotta the Founder and CEO of Return Logic, shares his niche expertise with merchants on preventing product returns.

In the article 5 Easy Strategies to Prevent Costly Retail Returns, Sobotta begins by sharing three strategies that can help prevent a return due to unmet product expectations. Each of these strategies aid setting appropriate customer expectations. The three strategies are robust product descriptions, online fitting tools, and customer ratings and reviews.

3 Prevention Strategies

‘Robust product descriptions’ includes the copy, imagery, and specifications of a given product. Can customers zoom in to see detail? Does the lighting distort the actual color of the product itself? Are you giving all necessary quantitative measurements necessary? Any merchant selling products online should ask themselves those questions and more for each product in inventory. Online fitting tools function in a similar manner: giving the potential customer an in-store experience, even though they’re online. In addition, it helps decrease the amount of customers who purchase one item in multiple sizes, only to return the items that don’t fit.

Finally, and arguably most impactful, each product should have an abundance of reviews and ratings. Sobotta outlines how reviews can help fine-tune future product descriptions. But, reviews and ratings go far, far beyond retailer benefits. A study released earlier this year by PowerReviews, “The Power of Reviews,” shows that reviews are no longer a perk for customers, but a requirement.

Some of the most staggering findings from the report include:

  • 95% of consumers consult customer reviews.
  • 57% of online shoppers specifically seek out websites with product reviews.
  • 82% of consumers specifically seek out negative reviews.
  • 70% of mobile shoppers reported being more likely to purchase a product if the site or app has reviews.

2 Retroactive Strategies

The fourth and fifth strategy Sobotta provides are focused on post-purchase behavior. Although some studies argue that the fourth strategy, offering free return shipping, can increase conversions simply for psychological reasons. However, there seems to be a delineation between ‘free shipping’ and ‘free return shipping.’ Free shipping is almost expected by consumers, and when retailers include a minimum threshold to achieve free shipping, it’s not as detrimental to the retailer to absorb those costs.

The landscape quickly changes when we turn our attention to free return shipping. An article published on The Wall Street Journal outlines just how costly offering free return shipping is to Ecommerce merchants. And on the topic of free return shipping somehow curbing product returns, “You will continue to see the returns increase as long as the customers are not having to pay for the return services,” said Satish Jindel, president of SJ Consulting Group Inc. and ShipMatrix Inc.

The fifth and final strategy is centered around utilizing, understanding, and making changes based on your return data. Merchants need to have robust data collection processes built into customer return protocols. Track more than just reason codes, include notes on vendor, customer history, product categories, and even a comment box where free-form comments can be added. Most importantly, apply the patterns seen in analytics data to current processes swiftly and accurately to prevent similar returns moving forward.

1 Additional Strategy

There’s an additional strategy that is absent from the list provided: a chargeback response plan. Regardless of the return policy a merchant has in place, strict or lenient, some consumer will deem it necessary to circumvent the return process and file a chargeback. Often overlooked, chargeback fraud is something that’s experienced by every single entity that accepts credit cards.

Instead of conceding to every chargeback encountered, identifying and responding to instances that are likely chargeback fraud allows businesses to reclaim the revenue that was once lost. Just how much revenue could your business recover? Check out this calculator that gives you an estimate of how much revenue you’ll recover based on your volume of chargebacks.

On the preventative side, we encourage all of our clients to include a ‘Protected by Chargeback’ Badge in the footer of their website that links to their chargeback policy. Fraudsters are well aware of companies like ours that identify and fight fraudulent chargebacks. The Chargeback Badge lets the fraudster know, under no uncertain terms, that the retailer is knowledgeable and protected against chargeback schemes.

Just like chargebacks, returns are a natural part of every merchant operation. Having strategies in place to prevent returns from happening in the first place and addressing instances of chargeback fraud post-purchase allows merchants to keep both at reasonable levels. Even better, it allows merchants to retain and reclaim more revenue.

2 Comments on “6 (Not 5) Easy Strategies to Prevent Costly Returns”

  1. Pingback: Mid-Market Merchant Mid-Year Ecommerce Outlook | Chargeback

  2. Pingback: Consumer Insights Survey: Customer Returns and Chargebacks | Chargeback

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