January 2019 | Commentary | Reverse Logistics

Minimize Returns While Improving Sales

Tags: Reverse Logistics, E-commerce, Logistics, Retail Logistics, Supply Chain

Andrea McFarling, Senior Director of Marketing, ShipStation, 512-253-7829

The popularity of free shipping has led to a growth of online sales. It has also created a problem: a large number of online returns. The shipping world defines the returns process as reverse logistics. Minimizing costs and even making a profit in reverse logistics is critical to an e-commerce company's health. Here are some ways to do that.

Prevent returns. The best way to handle returns is to not get any. While this may be wishful thinking, there are ways you can minimize the number of returns you receive.

First, consider these top reasons for online returns:

  • Product didn't match description
  • Received wrong item
  • Product was damaged

You can fix or lessen the first issue by providing detailed product information and in-depth content. Consider incorporating high-resolution photos, videos, and interactive visualization tools, such as augmented reality (AR), into your product descriptions. These options help consumers see items in finer detail.

Include product reviews on your site. Glowing product reviews motivate buyers. Customer reviews also offer important consumer-minded details, such as an item's fit or durability. This information helps buyers make more informed purchases, preventing returns. The reviews can also help shoppers avoid a purchase that they could be unhappy with, which can increase returns.

Prevent sending customers damaged or wrong items. Continued or additional employee training always helps. Using a shipping software that automatically downloads marketplace orders limits human error.

Craft a smart return policy. Online consumers are concerned about returns. A visible return policy and offering free returns is optimal for customers. Implementing this for your online selling efforts can greatly increase sales.

Get sales from returns. Here's a powerful statistic: In a recent survey, 92 percent of consumer respondents said that they will buy again if the online product return process is easy. What retailer wouldn't want that kind of retention rate?

What makes a return process "easy" to a customer? In addition to making the return policy simple to find on the site, automating the process is key. Offer customers a way to process returns from your website that allows them to generate a return shipping label. Provide tracking options and automated email notifications so customers can feel informed about the status of their return.

But don't stop there. Returns create an opportunity for merchants to sell more products. During the returns process, use emails to offer discounts or suggested products to encourage shoppers to buy additional items.

Make it Work for You

By preventing returns, creating a smart return policy, and generating sales from returns, e-commerce companies can minimize and improve returns while also increasing sales.