The Importance (and Challenge) of Managing Ecommerce Returns
By: Ted Rogers
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Ecommerce is booming around the world and across borders. This global, digital expansion brings plentiful opportunity as well as challenges. One of the most prominent issues faced by today’s ecommerce operations is the challenge of managing returns.
Whether you’re selling tech gadgets, fashion items, or home essentials, ensuring a smooth returns process is crucial to both gaining and retaining customers. And when you take your ecommerce business international, the complexity of doing so only grows.
Learn more about how returns and reverse logistics have evolved and what you can do about it in this guide to ecommerce return best practices.
The State of Ecommerce Returns in 2023
Returns have always been a pain point for businesses in the retail sector. But in the increasingly international world of ecommerce, returns have become a much more frequent occurrence. And there’s virtually no industry that’s a stranger to rampant returns these days.
Overall, ecommerce returns surged during the COVID-19 pandemic; and after a slight dip in 2022, overall return rates remain high.[1] On average, return rates hover between 20-30% of all purchases—a rate that’s 2-3 times as high as seen in typical brick-and-mortar retail sales.[2]
In light of this, ecommerce brands are under increasing pressure. Decision-makers may feel stuck between a rock and a hard place: that is, between the high costs of returns and the equally high stakes of catering to customer demands.
Because returns are a common part of the ecommerce experience, they’re an important consideration for today’s shoppers and a crucial part of any brand’s retention strategy:
- 80% of consumers say returns are an important part of the overall shopping experience.[3]
- More than 60% of shoppers examine return policies before making a purchase—and a further 12% have said they will abandon their cart if they’re not satisfied with that policy.[4],[5]
- 92% of consumers will make another purchase if they experience an easy returns process, while 84% say they would boycott a retailer after a poor experience. [6],[7]
To respond to these prevailing trends and drive international ecommerce growth, brands need to perform a delicate balancing act. On the one hand, they need to offer returns that are in line with customer expectations. On the other, they need to reduce returns and their associated costs. This is easier said than done. The cost of returns can reach a level that some brands consider instituting a no-return policy, which only adds to their problem—adversely affecting conversions and customer loyalty.
Ecommerce Returns Best Practices
In the current climate, navigating the complexities of international ecommerce returns can seem particularly daunting. But with the right return best practices in place, it’s more than manageable. Here’s how to get started on a better strategy.
Understand the reasons people make returns
The first step to refining your returns process is gaining a thorough understanding of why customers are returning products in the first place. Is it because of quality, sizing issues, or perhaps a disconnect between product descriptions and the actual item? By identifying which reasons are most common you can take proactive measures to lower your return rates.
One of the biggest drivers of ecommerce returns is a straightforward disconnect between customers’ expectations and reality. If the product that arrives on their doorstep is different from what they had in mind—in size, material, or otherwise—there’s a good chance it will be sent back.
Offering descriptive, accurate product details that are easy to find is critical to minimizing returns.
Localize experiences
Effectively implementing localized customer experiences can also minimize returns. If you’re selling products across borders, you need a content strategy and shopping experience that meets specifically local expectations. Be aware of regional sizing, language preferences, and cultural nuances, and ensure that they’re reflected in your shopping and checkout experience. In-depth localization efforts can significantly reduce the number of unnecessary returns.
Pack items securely—and use a shipper you can trust
Damage to products during transit is consistently among the biggest drivers of returns.[8] Invest in quality packaging to ensure products reach customers in perfect condition and it might help to elevate your presentation.
Even with top-notch packaging design, much of the burden of secure delivery falls on your shipper. Evaluate your partners (and their rates) regularly. Partnering with a reputable, reliable ecommerce shipping company can make a world of difference in minimizing these types of returns and their associated costs.
Go green with your returns management
Returns can be very costly for both businesses and the environment. However, taking a sustainable approach can actually help drive more business and potentially drive down losses caused by returns. According to a survey, 74% of customers intend to shop more with brands that make their delivery and returns more sustainable.[9] And to help cover the costs of more sustainable processes, 71% of shoppers said they would be willing to pay more.[10]
Maximize transparency throughout the experience
Being upfront about return policies, costs involved, and the entire returns process ensures customers are well-informed. But transparency shouldn’t end once a customer makes a purchase. To ensure a smooth experience from end-to-end, work with carriers and partners that can provide customers with tracking information for both delivery and returns.
Find the right support for your ecommerce returns management
Many brands working with cross-border providers often lack control over the customer return experience. However, with a solution like Digital River’s, brands get a branded returns portal where customers have access to submitting and tracking their returns. This centralized approach ensures consistency and quality in the returns process. Coupled with Digital River’s robust and flexible global logistics network, you can enjoy custom supply chain solutions and streamlined reverse logistics to match.
International ecommerce returns are a complex issue, but the challenges involved are far from insurmountable. By understanding why customers return items, improving the shopping experience, and implementing robust ecommerce return solutions, brands can significantly reduce costs and increase customer satisfaction. In today’s competitive market, mastering returns isn’t just a best practice—it’s essential.
[1] https://www.insiderintelligence.com/content/returns-surged-during-pandemic-fueled-ecommerce-boom-some-relief-sight
[2] https://www.richpanel.com/blog/ecommerce-return-rates
[3] https://www.pitneybowes.com/us/blog/inconvenient-returns.html
[4] https://www.returnlogic.com/blog/top-4-reasons-your-e-commerce-store-needs-a-return-policy/
[5] https://baymard.com/lists/cart-abandonment-rate
[6] https://www.uspsdelivers.com/building-a-winning-returns-strategy/
[7] https://internetretailing.net/84-of-shoppers-will-reject-retailers-that-deliver-a-poor-returns-experience-23214/
[8] https://www.statista.com/statistics/348087/order-return-rates-worldwide/
[9] https://f.hubspotusercontent10.net/hubfs/2182667/The Returning Conundrum.pdf
[10] https://f.hubspotusercontent10.net/hubfs/2182667/The Returning Conundrum.pdf
