Returns are always a challenge, but with ecommerce comes the extra challenge of where customers can quickly and easily return unwanted items. Some retailers, like women’s clothing stores, experience a return rate of up to 30 percent, says John Haber, CEO of Spend Management Experts in Atlanta, a process that can make or break customer relations.
Online stores learn the importance of solid return policies as soon as they need to eat the cost of a shipment gone wrong, says Jason Malinak, an accountant in Colorado Springs, Colo. After advising his wife on her own Etsy venture, Malinak wrote the e-book Etsy-preneurship (Wiley, 2012) to help Etsy sellers run their businesses.
Meanwhile, consumers have becomes spoiled by companies like Zappos, which takes back any item for any reason for up to one year, and even Kohl’s whose “No Questions Asked—Hassle-Free Returns” policy imposes no time restrictions and requires no receipt for credit card purchases, Malinak notes.
If you feel daunted by the prospect of dealing with returns and keeping customers satisfied, be sure to take the following precautions:
Write a clear, comprehensive return policy. At minimum, a policy must explain the process for returning an item, how long the customer has to do it, and how much it will cost. “But you can’t be too detailed with return policies,” says Malinak. Look at the return policies used by similar businesses to make sure you’re offering comparable terms, he advises.
Be sure to tailor the terms to your business; don’t rely on boilerplate language, Malinak says. For example, sellers of handmade or customized items strictly limit the acceptable reasons to return a product. A customer’s dissatisfaction with the color of a handmade item isn’t one of those reasons, Malinak points out. However, an item that broke en route to the customer qualifies for a return, he adds.
Make the return process as simple as possible. Haber points to merchant portal Rue La La as a standout in painless returns. If an item doesn’t fit, Rue La La’s customer can print out a return label and send the item back via the U.S. Postal Service in the same box it arrived in. The customer simply puts the package by the mailbox and doesn’t have to call to schedule a pick-up, as required by Fed Ex and UPS, says Haber.
Offer alternatives where possible. In general, returns can be reduced by meeting customer expectations in the first place and not overselling the value of a product and its performance, says Hal Altman, president and co-founder of Motivational Fulfillment & Logistical Services in Chino, Calif. If a product can’t be returned after it’s been opened, like vitamins, he notes, offer a store credit instead of a return to maintain good customer relations.
Make sure your employees understand the policy. Educate employees, especially those who interact with customers, about what the return policy entails. But allow them to be flexible. Haber recommends, for example, putting an approval process in place for expedited shipping to replace products damaged during shipping or to appease a customer in special situations. Because expedited shipping costs more, employees shouldn’t be given carte blanche to authorize it, he says.