April 21, 2021
The 3 Biggest Myths About eCommerce Returns
This blog is an excerpt from our new retailer guide: eCommerce Returns 101. It covers everything ecommerce retailers should know when it comes to returns, from mythbusting to practical advice on returns policies and guidance on how to structure returns communications. You can download the whole guide for free here.
eCommerce businesses tend to have a very negative view on returns. That’s pretty reasonable really, considering they can be costly and are effectively a customer rejecting your product – nobody likes being turned down, and paying for someone to turn you down is even worse! Much of this guide is about how to make that cost smaller and reduce the chances of the return happening. However, it’s also crucial that online retailers don’t get caught up in the idea that returns are inherently negative – they’re a normal part of doing business, and getting the process right can supercharge your growth and drive value right across the business.
With that in mind, we thought it would be good to challenge a few of the bigger myths that often come up when discussing returns.
Myth 1: Lots of ecommerce returns are fraudulent
The data can seem scary. Retailers lose approximately $18 billion annually to returns fraud per a 2019 report, which is a lot of money – but at the same time, that’s just 0.3% of the value of goods sold in 2019. Of course it would be better if that number was lower, but remember that the more you target and penalise the 0.3%, the greater the risk to the rest of your sales. As a customer, it’s easy to feel like you’re being punished for wanting to return something. That’s a dangerous lasting impression to leave!
There are good ways to tackle returns fraud, though. Working with a fashion retailer (& Other Stories), Doddle helped to simplify their returns policy and improve policy adherence by digitising their returns process. If you’re just providing a return label in the parcel when you ship an order, how can you stop a customer returning items which are outside of policy, or after the policy is supposed to lapse?
With a digital journey, the customer is given the option to return orders received within the policy window. That provides a barrier to fraudulent returns, as well as giving the retailer better data about incoming returns, and clearer insights from the returns they do receive.
Myth 2: Making returns harder saves money, because you get fewer returns
Some retailers acknowledge (not publicly, mind you) that part of their returns strategy is to discourage returns by putting hurdles in place for the consumer before allowing them to return. That helps them to reduce the rate of returns, and fewer returns means a healthier bottom line, right?
That’s absolutely true, and this method is effective. Guide over! Just kidding. This method works – in the short term. YouGov research commissioned by Doddle found that shoppers who have experienced frustrations in the returns process are significantly less likely to do business with that retailer again. The top frustration is having to pay for returns, which would make 58% reconsider future purchases. Having to find a location to take the return back to frustrates 36% of consumers, and 33% say that having to obtain an authorisation from customer support puts them off from shopping again in future with the same retailer.
All of the returns prevented by frustration turn into frustrated shoppers. Frustrating customers is bad for loyalty! 85% of shoppers say that returns are important to their perception of a retailer, and deliberately making that experience worse is bad news for customer retention and lifetime value.
Myth 3: Super-long policies are the future
This is sort of the flipside of myth #2. The idea is that if you’re not doing a Zappos-style 365-day policy, you’re falling behind, and longer and longer policies are the way forward for retail.
The truth is that yes, having a returns policy that is too short will frustrate 39% of shoppers (according to the research we referenced above). However, just 28% say that they would prefer retailers to offer returns periods of longer than 30 days! For reference, nearly twice as many shoppers (53%) said that they would want retailers to offer better communications and visibility during the returns process, for example including tracking details, confirmation of receipt and better refund information. Half of shoppers said they want more convenient locations to return items to, like local grocery stores and post offices.
The data show that while the length of the return window does matter to some customers, more customers care about how easy and convenient the process is than how long they have to return something. While longer policies can be a useful tool (as we’ll cover later), it’s not essential that your policy is 100+ days for it to be highly effective. Instead, it’s more impactful to focus on how you actually implement the returns process.
So now you’re clued up on the biggest myths in ecommerce returns, what should your returns policy actually look like?