Global eCommerce sales are on the rise, and so is the rate of returns. According to NRF, online returns doubled in 2021 and were the main driver of returns overall.
When the holiday season is coming, eCommerce returns can even be real troublemakers spoiling the magic. Passed the celebrations, online stores see their return rates skyrocket in January. So much so that January 2nd is called “National Returns Day” in the retail industry.
Let’s be realistic, dealing with returns is inevitable when you sell online. Yet, there are many ways to reduce the chances customers want to return their orders. To help you get ready for the holiday season and survive the January return madness, we compiled 5 tips to help you reduce your returns.
Why do customers return their orders?
Before diving into how you can reduce eCommerce returns for your business, it is important to understand why customers are sending items back in the first place. Returns seem to be more of an online struggle. According to Retail Dive, online retailers face an average return rate of over 20%, compared to 9% for their brick-and-mortar counterparts.
Fairly, return rates vary depending on the type of goods. According to a survey from Statista, the items most affected by returns are clothing. 88% of US consumers reported they return clothing, followed by shoes (44%), electronics (43%), home and garden (24%), and health and beauty (21%).
Now if we take a closer look at the reasons why customers return their goods in general, the following reasons keep popping up most of the time:
- Damaged products
- Not as described
- Poor quality
- Issues with delivery
- Change of mind
Tip 1: pack your items securely
You might think that once goods leave your warehouse, your job is done. Yet, damaged products are among the main reasons for returning items. A recent survey of over 7,000 consumers found that 67% of customers returned their orders because they were damaged. According to Statista, it is the second main reason for returning online purchases in the US in 2021. Although quality control can make sure that no damaged product leaves your warehouse, it is usually not enough to guarantee that your package will reach your customer in one piece.
Having control of your package once it leaves your warehouse is challenging because your delivery carrier plays a big role in this part. Yet, there are extra steps you can take to minimize the chances of damage when the item is being shipped. The key is to be aware of all the checkpoints your package will pass through, so you will be able to better anticipate. To reduce the risk of damage during transport, you can also consider:
- Using protective material, such as bubble wrap, in a delicate package
- Adding Fragile labels to parcels with easily breakable items inside
- Using the correct parcel size so items don’t jolt around in transit
- Tracking and insuring your packages
Tip 2: maximize your customer reviews
It is widely known that more consumers are reading online reviews than ever before. In 2021, 77% always or regularly checked them, up from 60% in 2020. Reviews have the power to be deal-maker or a deal-breaker because they are the biggest social proof. 49% of customers trust reviews as much as personal recommendations from friends and family because they see reviews as an unbiased and reliable source of information. In addition to helping you boost your conversions, customer reviews can be a very efficient lever to reduce your return rates.
Many online shoppers return their orders because the product was not what they expected. Displaying reviews in the right place on your website can help customers make informed purchases that they are much less likely to return. For example, if you allow customers to add pictures to their reviews, then potential buyers can have a better idea of how an article of clothing fits certain body types. With that in mind, it is a good strategy to encourage previous purchasers to share detailed information both through text and photos. You can also think about the best way to display your reviews so buyers will have access to in-depth insights prior to purchase.
Tip 3: use 3D/AR on your eCommerce website
When shopping, customers want to know how the product will fit into their lives. They want to know how a couch will look in their living room or how an eyeshadow will go with their skin tone. However, when buying online, they cannot fully assess it because they can’t see, touch, or interact with the item as they could in a brick-and-mortar shop.
That is why having comprehensive descriptions and high-quality pictures is a must, but still not enough. In many cases, shoppers had quite a different idea of what the item would look like in real life, leading them to return the package. By allowing your customers to virtually try your items, you will give them more meaningful keys to decide with and, in turn, reduce return rates. This is where 3D and AR can come in handy.
The ability to view products in 3D is a big boost for conversion in addition to reducing returns. Using AR can also be a very smart way for your customers to easily assess if the size and style are the right fit. It can be used for beauty products, using selfie mode to place lipstick on your lips for example. Shopify shared very promising data from online stores that tried 3D models. A fashion brand found out that shoppers were 44% more likely to add an item to their cart after interacting with it in 3D. Another online store saw a 40% increase in order conversion rate and a 5% reduction in return rate by using 3D and AR.
Tip 4: offer longer return windows
Many online retailers believe that having a strict return policy can discourage customers from abusing returns. However, practice shows this will mostly discourage people from buying your products. According to Parcll, over 60% of consumers read through a return policy before making a purchase. Although it may sound counterintuitive at first, giving customers a longer window to return products can get you better results.
If you only give customers a short window of time to decide whether they want to keep or return a product, they often feel rushed to decide, and will rather return it. Giving them more time to decide can increase the likelihood that they will choose to keep your product as they will have more time to become comfortable with it.
A customer’s survey from ReBound found that 63% of shoppers expect a return policy to be at least 30 days. 76% also said that they expect longer returns policies since the outbreak of COVID-19. The return window is especially critical during holiday shopping. If your return window is too short, people won’t hesitate to exchange their gifts for money immediately, rather than trying your products. In fact, most stores extend their window for returns to over 60 days for the holiday returns. Amazon is even offering a special extended return period during the peak season each year. This year, most items purchased on their website between October 7 and December 31, 2022, are returnable through January 31, 2023.
Tip 5: let your customers pay all taxes upfront
If there is one thing that online shoppers hate, it is being surprised with fees that were not shown in their shopping cart. Most of the time, they will prefer to return the package rather than pay additional fees, and they will lose trust. If they are buying from abroad, missing or miscalculated duties and taxes are usually the culprits. In fact, according to a survey from Statista, 59% of customers are afraid to purchase cross-border because they expect to pay additional fees or duties that were not made clear at checkout.
If you clearly display the duties and taxes your customers need to pay before they finalize their order, you will therefore decrease your returns. Eurora’s Duty & Tax calculation service is a hassle-free and secure way to display the correct duties and taxes in the shopping cart of your store. It can display the applicable VAT and duty rates in real-time in any currency for more than 160 countries.
Beyond seeing the duties and taxes due in their baskets, customers generally prefer to make a single payment including all taxes, instead of having to pay for it once the goods reach their country. If you collect them at checkout, your customers will also receive their package faster because it won’t have to be held in customs until your customer pays for taxes. This will have a positive impact on your return rate, as one of the main reasons why customers return packages is because the delivery took too long, or something happened along the way. Eurora’s IOSS service can help you collect the EU VAT from your EU customers and pay it on your behalf to the relevant tax authorities.
When you run an online store, eCommerce returns are inevitable but still manageable. Detecting why your customers are returning orders is the first step to taking action. Some reasons may be unique to the type of goods you are selling, yet there are generally 3 main reasons common to online shops:
- The product doesn’t match the customer’s expectations
- The package is damaged
- There is an issue with the delivery
If you follow the 5 tips we have listed, you can reduce your returns by ensuring your customers do not face these 3 issues.
By using Eurora’s Duty & Tax calculation service, you can show your customers the total price including taxes at checkout and reduce your returns by being fully transparent. Learn more about Eurora’s Duty & Tax calculation service! If you are a non-EU retailer selling to the EU, you can even collect the EU VAT from your customers at checkout with Eurora’s IOSS service to offer them a seamless shopping experience. Learn more about Eurora’s IOSS service!
Do you want to know more about how Eurora can help you reduce your returns and level up your customers’ shopping experience? Get in touch with us!