Studies show that 30 percent of items ordered online are returned versus about 9 percent purchased in traditional brick-and-mortar stores.
These returns cost your business in a number of ways. If you decide to pay for returns to be shipped back to you, your shipping costs go up. By the way, about half of ecommerce companies do this. You’ll also incur restocking fees for items returned in good order. Done poorly, returns can also damage your company’s reputation. Having a high error rate–in other words, getting orders wrong so customers have to send back what you sent them–makes customers less likely to order from you a second time.
So, are there ways for ecommerce companies to cut down on returns? Definitely. By carefully tracking the reasons items are returned, you can pick up on patterns that indicate common–and often costly–shipping issues.
You can track trends several ways.
For one, you can ask customers to explain the reason for a return on a form that they send back with an item. The form could be included in the shipment or made available online. Or, you could have them call your toll-free, customer service number and explain the problem to a customer service rep, who would then enter the reason for the return in your database.
About 22 percent of items are returned because even though they were the item ordered, they weren’t what the customer was looking for. Beyond providing accurate descriptions on your website, via copy and photos, there’s not much you can do about that.
Interestingly though, two of the top three reasons items are returned are issues that companies can remedy.
On average, 20 percent of items are returned because they are damaged. If your company has a lot of items returned because they are damaged, evaluate these areas:
Packaging: Is the item packaged well? Do you need a sturdier box, better protection inside the box?
The carrier: Is a particular shipper tied to the damaged items? If so, it is time to time to talk to the company’s rep about why and how your products are being damaged and ask what changes they can make to get your product to customers intact.
About a fourth of the time, customers get the wrong item from ecommerce companies. A friend recently ordered a day bed. It arrived, but was not the bed she had ordered. The company told her to keep that bed and sent her a new one. Imagine how much better companies would be doing, from a financial standpoint, if they decreased the error rate on their orders by even 5-10 percent. It is definitely doable, but it requires having a fulfillment partner who carefully audits orders before they are sent. When orders are shipped from our warehouse, they are checked multiple times by multiple staff. Thanks to this system of checks and balances, the error rate on orders we ship has dropped significantly, saving our customers a lot of money.
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