How Retailers Can Prepare for the Holiday’s Returns Season

Retailers have been preparing themselves for the holiday shopping season for many months now. While the holiday shopping season and the increased sales that come with it is great for most retailers, online returns are a growing reason why brands should temper their holiday earnings expectations.

Most businesses see sales skyrocket during the holidays. However, not all companies are taking the increased amount of holiday returns into consideration when calculating their yearly projections. Shorr Packaging has put together a useful graphic and guide for retailers that covers e-commerce returns best practices. Let’s review some of the key information presented in the graphic and guide.

The No. 1 reason that in-store-only shoppers refuse to buy online is because of the returns process. This shows how important it is for retailers to handle the returns process effectively. Eighty-five percent of customers will not buy again from a company whose returns process is complicated or inconvenient. That's a staggering number to say the least. Conversely, if the returns process is easy, 95 percent of customers said they would buy again from a company. Now that it’s clear that customers want a fast and easy online returns process, let’s examine what retailers can do to provide that.

Free return shipping is a great way to improve the way consumers view the online returns process. Companies that ask their customers to pay for return shipping will see sales decrease on average between 74 percent and 100 percent. On the flip side, companies that introduce free shipping returns typically see an increase in sales between 58 percent and 357 percent over the succeeding two years.

The cost of providing free returns is prohibitive for many online retailers. There are however many benefits that can outweigh the added costs of free returns. Retailers that offer free returns tend to attract more customers. One reason that consumers are hesitant to shop online is because returns are much more convenient in traditional brick-and-mortar stores. For most people it's easy to drive to a local store that can process their return immediately as opposed to going through the process of returning it online. By offering free shipping you can give consumers the extra nudge they might need to shop online with your business.

Another big reason to offer free returns is that you can help to differentiate yourself from your competition. At the start of 2014, only 10 percent of all retailers offered free shipping to their customers. Consumers are also likelier to purchase more online if their returns are free. This helps to level the playing field with traditional brick-and-mortar retailers.

Retailers that want to have a competitive advantage need to take the extra steps to give consumers exactly what they want throughout the buying and returns process. Here's what's most important to online consumers when it comes to online returns: Consumers want a return label that's either included in the purchase or have access to easy-to-print labels. Consumers also want return-friendly packaging that they can easily reseal on their own. Automatic refunds will go a long way in ensuring that online consumers will buy from your company again. Also, be sure that you have clear and easy-to-find procedures on how to complete the returns process.

Product returns are a necessary process in the e-commerce sales cycle. Businesses that are able to streamline the returns process will eliminate as many returns as possible, which will not only improve your bottom line, but more importantly keep your customers happy.

Jim Burns is the corporate sales and marketing manager at Shorr Packaging, a distributor of packaging products and equipment including boxes, tapes and adhesives, shipping supplies, and protective supplies.