When Hassle-Free Returns Aren’t Enough

E-commerce returns have become a critical touchpoint via which retailers can win or lose customers. Returning a product can often be a frustrating experience for shoppers, with multiple “where is my refund” calls and confusion on exact return policies. In fact, shoppers often won't purchase a product in the first place if return policies are too restrictive. What in a return policy prevents them from buying? Eighty-three percent of consumers say restocking fees, and 74 percent say having to pay for return shipping will make them walk away from a purchase. In an era in which it’s difficult to differentiate your brand based purely on price and product, it’s easy for shoppers to go elsewhere if they don't like or can’t parse out a complicated returns policy.

Thankfully, just as a clunky returns process can turn shoppers away, a seamless, transparent process can drive repeat sales and build lifelong loyalty. The data proves it: Ninety-five percent of customers who are satisfied with the return process will purchase with that retailer again, according to the recent Narvar consumer report, Making Returns a Competitive Advantage.

That’s why Amazon.com has spent countless hours and dollars on ensuring its returns experience keeps customers coming back for more. In fact, with the recent launch of Prime Wardrobe, Amazon has productized its simple returns process to support behavior consumers are already exhibiting. Forty percent of customers report “bracketing” purchases — i.e., buying multiple sizes, colors and models to try at home with the intention of returning all but their favorites. This is even more prevalent among millennials and the affluent, and in categories like apparel and home where style and fit are critical.

The Irony of Amazon Returns

While it’s not shocking that Amazon is favored among consumers even in the returns process, it is surprising how Amazon earns that loyalty. When compared to other retailers, Amazon’s returns process is more complicated, with multiple hurdles that require more consumer effort. Amazon customers are almost twice as likely to print a return label, contact the retailer for return authorization, or need to find a different box or envelope, compared with non-Amazon buyers.

Yet despite its multistep returns process and the effort it requires for shoppers, 75 percent of Amazon customers are satisfied with the company’s returns experience. What’s more, 91 percent say they would shop with Amazon again.

So what, exactly, keeps Amazon customers coming back for more when other retailers’ complicated policies turn shoppers away?

Transparency is Key

Amazon’s ethos is built on being transparent with customers. The retail giant has set the standard for effortless customer experience at every step of the shopping journey, from product discovery through delivery. Shoppers can check out with a single click, are proactively notified about package tracking and delivery status, and are able to browse multiple prices and sellers. This visibility is ingrained in how the company operates, so it’s only natural that it’s instilled into the returns process as well.

Despite the complexity of Amazon returns, the company wins over customers through the transparency it provides throughout the entire process. Thirty-four percent of Amazon shoppers say they receive proactive updates on their return package compared to just 15 percent of non-Amazon shoppers. Furthermore, 45 percent of Amazon customers are kept apprised of their refund status vs. 25 percent of those who shopped elsewhere. This strong communication satisfies customers despite the fact that they have to jump through more hoops.

A complex returns process has the potential to drive customers away if not paired with transparency. Consumers who express dissatisfaction with their returns experience also tend to jump through hoops, but receive less communication than average on the status of their refund and return package.

This should be a lesson for retailers as they look to advance technology to support e-commerce growth. Retailers have long taken cues from Amazon in providing seamless, engaging, transparent experiences in other parts of the shopping journey. Now it’s time to take the extra step to give consumers the returns experience they want. No matter the steps required in a returns process, transparency is the key to winning over customers and ensuring they come back time and again.

Amit Sharma is the CEO of Narvar, a company that helps retailers deliver premium post-purchase experiences.