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Investing in your e-commerce return policy

December 12, 2012

We’re halfway through the best e-commerce holiday shopping season ever. While we at Shipwire would love for the festivities to continue on forever, it’s time to start thinking ahead to December 26. Specifically, I’m talking about returns.

Facilitating a smooth and hassle-free return experience for your customers can make you stand out in their minds and influence where they decide to shop. Though the reward is great, planning, executing, and perfecting a return policy is no easy task. Here are a few of tips for a top-notch return policy from our learnings from years past.

Map out a decision tree for your return policy
It’s important to have a clear and concise return policy and the first step to such policy is to map it out to make sure all the bases are covered. You’ll likely be facing one or more of the following scenarios when a customer wants to return a product:
Return policy decision tree

Determine best practices for each scenario
Once you have the scenarios mapped out, it’s time to draw up, document, and disseminate the best practices (both internally and to your customers). We’ve found that using a carrier that offers return tracking, providing automatic return shipping labels, and encouraging customers to insure return packages are some practices that generally result in a better return experience. To learn more about managing returns, read this article.

Regardless of how you decide you handle returns, make sure your policy is communicated clearly to your customers to avoid confusion and to instill buyer confidence. Make sure the policy is documented clearly on your site and written in a colloquial tone – not everyone is a lawyer and making sure your policy is understood is important. Also include any information about charges in the policy.

Less strict equals more revenue
Industry experts agree that having a more lenient returns policy not only increases customer satisfaction, it boosts total profits and sales as well. Best Buy and Johnson and Johnson are great examples of how a return policy can make or break a company – the former saw its sales surge as it revamped its return policy to eliminate restocking fees and the latter saw its market capitalization drop due to poor handling of recalls.

A second study shows that more than half of all online shoppers have returned merchandise back to the online retailer. Among shoppers who have returned merchandise, the top expectation for returns is a preaddressed prepaid return label. In other words, if you do not provide free return shipping, chances are you are not meeting your customers’ expectations.

December 26th is two weeks away. As more companies realize that a good shopping and return experience is the best way to keep existing customers happy and attract new customers, make sure you stay ahead of the curve – and that means revisiting your returns policy. It’s not too late to invest in your customers this holiday season – you just might see better results in the new year and beyond.

Dimitri Onistsuk

Dimitri Onistsuk is the marketing director at Shipwire, and is in charge of figuring out what knobs to turn in order to spread the word about the leader in order fulfillment. During his years working in ecommerce, shipping, and fulfillment, he has helped countless merchants sell stuff to their global customers.