Customers expect at least 30 days to return an online purchase. Being lenient with return time limits e. Assess the quality of the item, do product testing, and check in with your manufacturer to address any production or quality issues. You can also include a quick one-question survey in the returns process asking why a customer chose to return a certain product. If your returns process is easy to complete, customers will likely be happy to select a return reason from a list of preset options. This can be particularly helpful in identifying a quality issue with a product, such as a fit issue with apparel.
For example, if clothing items are being returned because they are too large, you may be able to identify a potential sizing issue with your manufacturer. Gathering information on the return side can help you identify trends and issues with your products and make the necessary improvements to future inventory. Handling returns in-house can be costly and time-consuming, especially for a quickly-scaling ecommerce business.
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To stay competitive, many direct-to-consumer merchants choose to outsource logistics to a third-party logistics 3PL company. This can include providing customers with prepaid return labels, sharing return tracking information, and even supporting integrations that will automatically text return and refund updates to customers. For apparel companies, the returns management process can require several extra steps, from pressing each shirt to in-depth quality assessment to determine if an item has been worn. Apparel companies should consider working with a specialized apparel 3PL, as many 3PLs will not be able to accommodate these requirements.
Return volume during peak shopping season is often more than ecommerce businesses are prepared to handle in-house. This can translate to time and cost savings year-round. A 3PL can also help merchants create a customer experience that encourages brand loyalty and repeat buyers.
This is especially vital during busy shopping times when new customers are forming their first impressions about a merchant or brand. Unfortunately, more orders means a greater number of returns during the first few weeks in January. In fact, 5 million packages are returned to retailers in the first week of January alone. How can you get ahead of the inevitable influx of returns and create a great holiday return strategy?
State of ecommerce returns and 12222 stats
If you outsource fulfillment to a 3PL, work with them to figure out if and how they manage returns for their clients. Your 3PL should be able to help automate the returns process in a quick and cost-effective way, including providing your customers with a shipping return label and tracking information once their return is shipped. If your product requires a more complex quality inspection before it can be restocked or discarded, consider having returns shipped directly from your customer to you.
If you typically only offer 30 days or fewer for returns, consider extending your window for holiday returns. This gives gift recipients ample time to return unwanted items. How do you currently handle the authorization of returns?
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Do you require an original packing slip? Consider letting customers choose a gift option at checkout. Refrain from including packing slips that list prices, or even include a gift receipt with instructions on how to return gifts. Make sure that you clarify your gift refund policy, as well; most merchants including Amazon allow gifts to be returned for a gift card, minus any return shipping and restocking fees. With the huge influx of returns after the holidays, automating the return process can make an otherwise overwhelming workload more manageable.
One way to do this is by working with a 3PL to automate the reverse logistics process. You can also automate the customer-facing half of the equation.
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Whether you keep fulfillment in-house or outsource it, technologies like Returnly allow ecommerce merchants to create a fully hosted, brandable, self-service returns portal. Returnly integrates with both Shopify and ShipBob to streamline the returns process for merchants and customers alike by automatically processing returns and refunds from the ShipBob dashboard. Here are five return policy examples from a variety of ShipBob clients.
They let customers know what exactly is required for a return, as well as what to expect in terms of processing time. Why it works: Rebel Girls clearly explains return cutoffs and requirements for different situations, as well as shares contact information to answer any customer questions. They also offer free returns in the case of fulfillment errors, showing a dedication to customer support. Check out these frequently asked questions about how returns work for online stores and the implications of different policies.
This depends on the industry and product. That said, with nearly half of all ecommerce shoppers checking return policies before purchasing online, you could miss out on half of potential customers by failing to offer a return policy. For those selling product categories with higher return rates, such as apparel or footwear, the risk of losing sales is even higher. Small businesses should make sure that they create a return policy and process that works for their business model and margins. For some businesses, it may not make sense to offer returns at all.
For example, if your product is perishable, accepting returns can create more issues than it solves — and customers are unlikely to expect you to do so in the first place. Products that require a certain fit, like apparel and footwear, will have an understandably higher return rate than a one-size-fits-all product. Return fraud refers to a customer gaining financially from the return process, resulting in your business losing profits or inventory. The nature of ecommerce makes it harder to spot and prevent return fraud than in brick-and-mortar stores.
Some signs of ecommerce return fraud are excessive loss of inventory, an above-average increase in the number of returns, and shrinking margins because of returns. To prevent ecommerce return fraud, experts recommend requiring proof of purchase when accepting returns, as well as only refunding to the original payment method or even just to store credit.
Being able to track shipments to your customers can also help prevent fraud. Working with a 3PL that provides transparent ecommerce order tracking can make sure you always have this info on-hand. If you have a brick-and-mortar store, consider allowing customers to buy online and return in store often referred to as BORIS. This works best if you offer the same inventory in-store and online. Ratios are easy to understand and easy to apply. Before any marketing program or activity is started, everyone understands what it needs to generate to be successful.
Also, as long as the right tracking mechanisms are in place, everyone can quickly determine if a campaign was successful or not. When calculating your ratio, a marketing cost is any incremental cost incurred to execute that campaign i. This includes:. Because full-time marketing personnel costs are fixed, they are NOT factored into this ratio. At an absolute minimum, you must cover the cost of making the product and the cost to market it. If all you accomplish with your marketing is break even, you might as well not do it.
Therefore, their ratio is lower. Their ratio would have to be higher. For example, we worked with one client to set up a tracking a reporting system for the paid search campaign PPC. This client had achieved the revenue to spend ratio, but that's not the whole story. Prior to adding repeat purchases to this chart, the return on PPC looked a lot different. And it wasn't pretty.
And here's how the cumulative difference between first sale value and lifetime value looks over time. The spend never changed, but our perception of the campaign's impact on revenue and ultimately ROI changed dramatically.
For most businesses, a ratio will be the target, and anything beyond that is gravy. It is not easy to calculate revenue generated for all marketing activity. Certain tactics like social media, content marketing, video, and display ads for a targeted audience starts long before a purchase takes place.
Marketing software platforms such as Hubspot, Marketo, and Pardot do a good job of connecting early engagement to a final sale, but they are not perfect. That being said, marketers should always work to connect the dots between activity and revenue. Advances in web analytics software and methodology provide better insight for measuring activity over time and across different devices.