5 Common Ecommerce Returns Mistakes Having a clear return policy and having a process for handling returns can reduce revenue loss and increase customer satisfaction.

By Jennifer Goforth Gregory

Opinions expressed by Entrepreneur contributors are their own.


It's holiday returns season, a critical time that tests an ecommerce retailer's organizational skills and customer service savvy. A lack of preparation for this season can leave you overwhelmed, costing you time, money and customer satisfaction. To help, our retail experts list the five return mistakes to avoid.

1. Having an unclear or hard-to-find return policy. Customers who are confused by a return policy are less likely to become repeat customers. Have a very clear return policy that states which items are not returnable, the time limit for returns and any restrictions about the condition of the item. Put the return policy on your website in an easily accessible place as well as on the checkout page. Be sure to also include the return policy on the packing slip.

2. Not allowing enough time for returns. Limited return windows don't work well for gifting, especially during the holiday season. Many people buy gifts in early December, but the recipient does not get the gift until the 25th, allowing very few days to ship a return back to an ecommerce store with a 30-day return window. "If the return policy is too short, then people get nervous that their loved one won't have enough time to return the item and are less likely to make the purchase," says Niraj Shah, chief executive offier and co-founder of Wayfair.com. He recommends accepting returns until a set date such as January 15th or preferably Jan 30.

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3. Not having a system to process returns. Paula Rosenblum, co-founder and managing partner at RSR Research, a research and advisory firm, recommends ecommerce companies sort returns into four piles: items that can be resold as is, goods that are not salvageable, merchandise that needs minor repairs that can be done on site and products that need to be sent to a vendor for repairs or cleaning. By having a process and developing partnerships with vendors, she says, ecommerce companies can reduce the time required for processing returns and increase the amount of merchandise that can be resold.

4. Not staffing for returns. The longer a return sits in your back room, the less likely that item will be saleable. Consider hiring extra staff or extending the employment of pre-holiday workers during the weeks after Christmas to quickly process the returns. "Since the person handling incoming returns will also need to make judgment calls about what to do with each item, you want an employee with enough experience in retail and in your policies to make the correct business decision," says Rosenblum.

5. Offering free shipping and free returns based on total purchase amount. To compete with Amazon Prime and other large retailers, many smaller ecommerce stores are now offering free shipping for orders over a certain dollar amount along with free returns. However, Bob Phibbs, chief executive office of the Retail Doctor, a retail sales consulting firm, says many shoppers will purchase a cartful of items to meet the minimum and then use free shipping to return the other items, which increases expenses and excess merchandise for the retailer. "Instead of offering free shipping and returns based on the total purchase, go through your inventory and offer free shipping/returns only for mid to upper prices items or do not offer free returns," says Phibbs.

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Jennifer Goforth Gregory has over 18 years professional writing experience and specializes in writing about small businesses. Her work has been published MSN Money, FOX Business and the Intuit Small Business Blog and American Express OPEN Forum.

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