10 ultimate tips on how to effectively reduce your return rate
It is one of the major problems in online retail: the flood of returns. Double-digit rates are often not uncommon, but rather the rule. In the fashion category, the return rate regularly exceeds the 50% mark. For e-commerce, where margins are traditionally already low, it is quite a challenge to still sell profitably under these conditions. Therefore, many online retailers are trying to reduce their return rate.
This also applies to sellers who primarily trade through marketplaces like Amazon. There, the problem is even more pronounced, as the shipping giant’s structure makes it very easy for customers to return items. Additionally, Amazon sellers have far fewer options to significantly reduce their returns.
What to do then? Bite the bullet, swallow the bitter pill, and accept the situation? After all, all sellers are struggling with this equally, so it balances out competitively, right? One could do that – but it doesn’t solve the problem. For the sake of the environment alone, sellers should do everything they can to reduce their return rate. The nice side effect: those who work on their return rate generally improve the quality of their offerings and can therefore hope for more sales. We show you what you can do.
10 tips for fewer returns
Amazon sellers have a tough time when it comes to returns. On one hand, they do not have the options that traditional online store operators have – tips like “Ask for the reason for the return and learn from it” or “Implement return fees” are simply not feasible.
On the other hand, Amazon is primarily interested in a perfect customer journey and makes it easy for customers to obtain a return label. Because when the customer is generally satisfied, the likelihood increases that they will make their next purchase through the online platform. With this philosophy, Amazon generates billions in revenue every year despite the many returns. Even though there have been rumors that the company suspends accounts of particularly return-happy online shoppers, it puts its marketplace sellers in a difficult position with its general return policy. This is because the return rate plays an important role in the awarding of the Buy Box. We have compiled ten tips on how you can still reduce your return rate!
#1: The faster the shipping, the lower the return rate
The average online shopper is an impatient and fickle being. They prefer to shop from the sofa late at night and want their order delivered as soon as the next day. If that doesn’t happen, the anticipation usually fades quickly. The more time that passes between placing the order and receiving the package, the higher the likelihood that customers will return the goods.
To reduce the return rate, fulfillment and shipping optimization is therefore essential. It is clear that not everyone can offer same-day delivery – but sellers who handle their own fulfillment should still take a critical look at their processes. Where are the bottlenecks, and what can I do about them? Can I optimize my software and create automatic packing lists? Do I need more staff? All of these are questions that can lead to faster shipping and the customer receiving their goods sooner.
In addition, there is also the option to use Fulfillment by Amazon (FBA). This service includes storing goods in the shipping centers of the e-commerce giant, assembling orders, shipping, as well as customer service including return management. While the return rate cannot be directly reduced this way, FBA has many advantages that can offset a high return rate:
#2: The better the product description, the lower the return rate
This aspect is very important to sustainably reduce the return rate. Unlike in brick-and-mortar retail, online shoppers cannot examine an item in detail, touch, or try it out before purchase. At the same time, appearance, feel, and functionality have a decisive influence on the purchasing decision. Online retailers can only partially compensate for this disadvantage. Therefore, it is all the more important to make full use of all possibilities here.
For sellers on Amazon, this particularly means designing the product detail page accordingly. Nothing is more fatal for the return rate than a poor, uninformative product description. Instead, the customer should be as clear as possible about what to expect. What product is it? What is this product used for? What special functions and features does it offer? The clearer such points are to the buyer, the more informed their purchasing decision can be, and the lower the likelihood that they will return the goods.
On Amazon, however, sellers who manage a listing have another option to reduce their return rate. Through the so-called A+ Content, the product description can be expanded by an additional 5,000 characters. Additionally, images or tables can also be integrated. A+ Content is therefore particularly suitable for presenting products that require explanation, showcasing unique selling points, or explaining important product details.
You can find a detailed article on this additional content here: Amazon A+ Content – The free way to a high conversion rate?
#3: Product images can also reduce the occurrence of returns
As crucial as the description are the images of a product. In addition to the quality, which should be as high as possible, other aspects play a role in reducing the return rate:
All these aspects ensure that the customer gets a “feeling” for the product. The more realistic the impression created, the lower the likelihood that the customer will be disappointed when unpacking the goods.
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#4: Marketplace sellers should also use the data they have
Of course, especially FBA sellers do not have the same opportunities to collect data as those with their own online shop. But Amazon sellers also have access to information that they can use to reduce their return rate. In particular, customer reviews should be mentioned here. Sellers should especially look at negative reviews. Are certain complaints recurring? Then this is definitely an indication of why some customers return their orders.
In addition, Amazon always asks for the reason when a return is made. If the customer indicates “Does not like” here, it may be an indication of inadequate product photos. Many “Does not fit” responses suggest that it might be worthwhile to include a size chart in the product description.
#5: Robust packaging reduces damage during shipping
Packaging is often underestimated by many sellers, yet it is very important for the customer experience. It conveys the first impression, which can be crucial. The right packaging does even more: it protects the item. Damaged goods, on the other hand, are very likely to be returned. To reduce the return rate or prevent it from rising in the first place, it is therefore important to choose robust packaging.
This can also be applied to the package itself. Fitting boxes are less susceptible to dents and impressions, and some wood wool further reduces the risk of damage during the shipping process.
#6: Good customer support resolves issues and fosters customer loyalty
To build good customer loyalty and increase the likelihood of a purchase, accessible and competent customer support is crucial. Therefore, it is advisable to offer various ways for quick contact to clarify questions and handle returns smoothly. For example, in addition to the general hotline, a chatbot could also be available in your online shop (a nice side effect: this additionally relieves your customer support).
In addition, customer service should be easily accessible, as potential customers often have questions before making a purchase. Your team’s response in such situations can determine whether a customer stays or leaves. Skillful handling of customer inquiries, such as recommending similar products that may better match the customer’s wishes, not only demonstrates commitment but also leads to more satisfied customers and higher sales.
As an Amazon seller, you can also completely outsource your customer support by using Amazon FBA.
In short, a positive and proactive approach in customer service helps to reduce the return rate in later stages of the customer journey and improve the overall experience for the customer. Here is an example of a team that embodies these elements daily.
#7 Create purchase incentives
Rewards and incentives can help reduce return rates when used strategically. There are several options for online retailers:
#8 Those who learn from customer reviews sell better
To reduce the return rate in e-commerce, it is crucial to understand the reasons for product returns. An effective method for this is to ask customers for the reason for the return during the return process. Additionally, setting up a review section on the product pages can provide valuable feedback for you. Customer reviews are not only a trusted source of information but can also clarify unforeseen questions and strengthen the trust of potential buyers. Especially on platforms like Amazon, customer reviews play a crucial role.
Aside from the “educational value” of customer reviews, it cannot be emphasized enough why customer reviews play a central role as social proof in e-commerce. They reduce the uncertainty of potential buyers by providing insights into the experiences of others. Additionally, people tend to identify with other customers and follow their actions. Customer reviews are considered expertise, as they provide insight into product quality from the perspective of other customers, which increases their credibility.
#9 Reducing returns through the use of Augmented Reality
The integration of virtual fitting tools has proven to be extremely effective for e-commerce retailers in assisting customers with purchasing decisions. With these tools, customers can now virtually try on clothing or cosmetics or place items in their environment to see if the item looks good there. The latter is particularly advantageous for furniture, as return costs are known to be higher than, for example, for clothing.
The use of AR has another positive side effect: by providing such innovative technologies as a service offering in e-commerce, retailers not only promote customer satisfaction but also sustainability. The initial investment in this technology pays off in the long run, as the number of incorrect orders is reduced, leading to fewer returns, less packaging waste, and lower CO2 consumption. Thanks to Augmented Reality, shop operators can offer their customers a seamless shopping process and say goodbye to excessive returns.
#10 Reducing the return rate through “Mobile First”
The increasing use of mobile devices for shopping has led many people to prefer making their purchases through their phones. This development is fundamentally positive for online retailers, as the ability to shop from anywhere encourages people to shop more in general. This leads to more revenue for sellers. Of course, there are also some disadvantages – increased return rates, for example.
Insufficient optimization of the online shop for mobile devices can, for example, lead to a higher return rate, as a poor page structure on the mobile version may cut off important information or incorrectly represent the product. To prevent this problem, online retailers should ask themselves the following questions:
Conclusion: Happier customers = fewer returns
As is often the case in retail, it is about providing the customer with the best possible service – this is especially true for selling on Amazon. Therefore, optimizing the return rate also involves optimizing the product description and product images so that the buyer knows as precisely as possible what to expect from the goods – and what not. A fast shipping and a sturdy yet high-quality packaging also play a crucial role.
In addition, marketplace sellers can analyze product reviews and take a look at the reasons for returns. Only those who utilize all the data available to them will be able to reduce their return rate. Incidentally, this way sellers also improve their product and their profitability.
Image credits in the order of the images: © tostphoto — http://stock.adobe.com ; © New Africa — http://stock.adobe.com ; © Andrey Popov — http://stock.adobe.com
