6 Ways Your Returns Policy Can Boost E-Commerce Sales
If you’re looking to increase your e-commerce sales, you might have to do something that seems really counterintuitive: Institute an amazing returns policy that makes it super easy for customers to return what they purchase.
“What?” I can hear you exclaim in disbelief. “How would letting people return what they purchase help us make more money? That’s literally the opposite of making money.”
I know, it’s weird. But here’s the thing: a good returns policy functions like a brick-and-mortar’s try-then-buy style. That is, at a brick-and-mortar store, consumers can touch easily touch products, try them on and figure out if the product will work for them. Most times, they don’t buy every product they test out. However, they’ll probably get at least one thing. That’s try-then-buy.
It’s difficult for an e-commerce store to truly offer a try-then-buy experience, so a great returns policy (and free shipping) really functions as the e-commerce equivalent, a sort of buy-then-try.
Still don’t believe me that it works? Zappos learned that 95 percent of its customers who make a return, well, return. And by that I mean they become a returning customer. That's a pretty darn good return rate.
So, how do you set up a return policy with the same success rate? Use my tips below to create your own stellar return policy:
1. Simplicity is key. If you take nothing else away from this article, take this: Make your returns policy SIMPLE. Don’t force customers to jump through 4,000 hoops to return a product. Don’t have different return policies for different items. Whatever your policy is, make it easy and make it across the board for your company.
2. Make it easy to find. Your customers don’t want to play Sherlock Holmes in order to return their purchases (unless they’re Noel Fielding and Russell Brand), so make your returns policy easy to see. The best way to do this is to include a small banner on every page with a very brief sentence letting people know the summary of your returns — a la Modcloth:
You can link that text to a page where you give the full explanation of your policy, keeping it as clear, simple and straightforward as possible.
3. Accept multichannel returns. While this won’t apply to all e-commerce stores, if you have a physical location, you should certainly accept returns of your products there. This is smart for a couple reasons:
- For customers who hate the obnoxious process of mailing stuff (put a pin in that), taking things back to a store makes life a lot easier.
- If customers return to the store, they can easily check out new items to take home instead, which is a win for everyone.
4. Send your return materials right along with the purchased products. Again, I know this is really counterintuitive. It seems as though you’re telling your customers that you expect them to dislike the items they’ve purchased.
In reality, the message it sends is very different: it tells your customer that you value their satisfaction above all else, including your profit. And not only that, but that you want to satisfy them with as little work from them as possible.
So rather than expect your customer to print the return label off your website or (worse) just go deal with the whole thing themselves at the post office, you can send them the return label right in the bag or box. Or you could do one better than that and follow in the footsteps of Stitch Fix, which offers my personal favorite returns material experience.
Stitch Fix sends a returns bag that already has the label stuck to it inside the box of clothes it ships you. This bag is totally ready for shipping. The only thing the customer needs to do is stuff the unwanted clothes in it, shut the bag and put it in their mailbox. That’s about as easy as it gets without being able to beam items back to the fulfillment center.
5. Free your returns like Willy. I can hear you, “You want me to offer free returns? So I have to refund all the money the customer paid me, and then I have to pay MORE to have it shipped back to me? How on earth does that make me more money?”
I know it sounds crazy, but you got to spend money to make money. Here’s some proof: Zappos has both free shipping and free returns, and is bonkers successful, even though it has a 50 percent return rate. How does that work? Ecomdash’s CEO Nick Maglosky did the math, and it actually makes a lot of sense.
“A two-second search on Zappos.com for women’s heels, priced high to low, revealed a lengthy page of shoes priced well into the thousands — the first option coming in at $2,795. Let’s say it costs around $6 to ship a pair of strappy heels. Using the data Zappos shared, if two customers bought the nearly $3K shoes, and one of them returned the pair, Zappos is eating likely under $20 in shipping costs. Twenty dollars for a thousand-dollar sale isn't bad, especially when the customer who made the return is 95 percent likely to buy from Zappos again.”
6. Don’t be afraid to break your rules. Rules were made to be broken. When you’re offering great customer service, you typically end up breaking a lot of rules. The rules are more like guidelines, really.
You’re going to have customers who are going to want to return things they’ve used quite well, that they’ve broken or that they’ve soaked in the washing machine. You have to make the call on a case-by-case basis with these customers to decide if it’s worth going outside of your return rules to keep a customer. Always remember that the one hard-and-fast rule is that customer loyalty is worth more than a short-term gain.
Those are my six go-to tips on how to make a returns policy for your e-commerce store that will rock your customers’ socks. What tips and techniques do you suggest?
Cara Wood is a marketing associate at Capterra, an online service that connects buyers and sellers of business software.
Related story: 5 Things Retailers Must Understand About Product Returns