By Erica Houskeeper on October 27, 2020
Returns used to be a task that retailers brushed off as a pesky inconvenience. Not anymore. As consumer behaviors change and returns become more common, retailers need to be thoughtful and strategic about their return policies.
In 2018, out of $3,688 billion in total retail sales, $369 billion—roughly 10%—were returned, according to the National Retail Federation.
For companies like Zappos and Warby Parker, returns are built into their business models and changing consumer behavior. And in the era of COVID, where online shopping is on the rise, easy returns initiated from home are in demand now more than ever.
A new report released in October by ShipStation, an Austin Texas, based provider of web-based e-commerce shipping services, found that 54% of online shoppers indicated they are influenced by retailers’ return policies and free shipping being the top customer requirement.
Meanwhile, 89% of respondents maintain that retailers should have a free returns policy. A touchless return policy was also preferred, with 85% requesting a self-service process that requires no contact with customer service, with 67% preferring mailbox drop-off and 66% preferring porch pick-up.
In an interview with Logistics Management magazine, Krish Iyer, head of industry relations at ShipStation, said that some of these changes to the retail landscape should be considered permanent ones.
“COVID-19 forced a change in behavior to do these tasks at home and overcome some of the barriers associated with mail-in returns,” Iyer said. “Retailers who invest in tools that allow the consumer to initiate returns easily, whether with an RMA (return merchandise authorization) process and/or the return shipping label, as well as making packaging easy, will be the long term winners.
A Customer-Centric Return Policy
Even before the pandemic hit, customer-centric return policies were an important branding tactic, especially for categories like beauty and apparel. Many innovative businesses, such as Zappos and Warby Parker, have recognized that a customer-friendly return policy is a powerful marketing tool.
According to UPS, 68% of shoppers check a website’s return and exchange policy before making a purchase. That’s why many brands now advertise “free,” “easy,” and “no-hassle” returns and exchanges to increase conversion rates and online purchases.
Setting up an RMA system for returns and exchanges
If you’re running an e-commerce business, you’ll want to put a return merchandise authorization system (RMA) in place to manage returns in your store. Having an easy returns process can make all the difference for both a business and its customers.
A return merchandise system helps you handle returns for your customers. It lets customers initiate a return, receive a pre-paid label with an RMA number, and ship the return. An RMA system also helps you manage and track returns by relisting approved items back into your inventory and monitoring the financial impact of returns.
Return policies will vary depending on the logistics of your business and the products you sell, but every policy should cover the following basics:
- What items can be returned
- What items can be exchanged
- What products are final sale
- When things can be returned or exchanged (30, 60, or 90 days past purchase date)
- In what condition can items be returned (lightly worn, with tags still on, original packaging, original condition)
- What products can be returned for (store credit, refund, a product of equal value)
- How to initiate a return or exchange (an email address to contact or a web page to visit)
Remember, consumers have developed high expectations for free online returns and exchanges. In fact, more than 95% of people would shop with a retailer again based on an “easy” or “very easy” return.
In the COVID era, making something easy can mean everything to a customer. Learn how Sekure can help your business. Visit our COVID-19 Merchant Resources page to help you stay open and #Staysekure.