Why Good Returns Mean Good Sales

Returns are prickly points for many eCommerce retailers.

They fear that too many returns will mean a significant loss in profit or an increase exposure to fraudulent returns, but the truth is that good returns are simply good business. Although you’ll probably need a returns management team to help you sort through the returns process, you may discover that having a customer-centric returns policy is one of the best things you’ll ever do for your site.

Returns Can Increase Your Bottom Line

Yes, you read that right. Returns, the costly, time-consuming and intimidating things that you’re trying to avoid, can actually increase your bottom line. It’s not just a well-meaning platitude, there’s solid marketing data to support this assertion.

For example, a study published in the Journal of Marketing Research followed a population of 25,000 customers, divided into several groups. The control group received no marketing efforts whatsoever, three that were exposed to different methods of marketing to “product-returning customers” with no consideration for their returns, and a fifth that considered the customer’s positive attitude toward returns, as well as the cost of returns.

Interesting Findings About Customer Returns

What they found was heartening. The fifth group, the one that factored in the idea that customers will returns items and strategized for it in a positive way, generated $1.8 million in revenues during a six month period. The control group, by contrast, only generated $1.22 million.

This online retailer realized the true value of accepting its customers’ returns without throwing up roadblocks or otherwise making the process painful.

A meta-analysis from the University of Texas Dallas found that overall, lenient returns policies led to an increase in purchases for eCommerce retailers. One of the most actionable findings from that study was that longer return windows actually decreased returns. It supports the idea that Zappos had years ago to implement a 365-day return policy.

For Zappos, it meant that 75 percent of its shoppers became repeat customers. Shoppers didn’t fear that they wouldn’t be able to return an unwanted purchase and Zappos benefitted from the “endowment effect,” which essentially means the longer a customer has a product, the more attached they become to it.

The benefits of a good returns experience cannot be understated. In an era where a third of all online purchases are returned, knowing that there’s a light at the end of the tunnel is vital. Customers return eCommerce items more often because they can’t experience them in real life, which can make it difficult to conceptualize the product. Instead of punishing them for taking a leap of faith with your business, turn your returns management into a tool to improve your customer relationships.

2017-07-05T19:51:45+00:00September 27th, 2017|Categories: Return Policy, Returns Management, Reverse Logistics|0 Comments

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