My LG HBS800 was giving me trouble for a week now and finally gave up on me yesterday. It was 6 months old. Incidentally, I had thrown away the receipt. To set things right i went to the store yesterday, and spent 20 minutes with a BestBuy rep & then the manager. They tried to look for my receipt using variables like ‘date of purchase’, ‘$’, ‘store where purchased’ & ‘Credit Card’.

The System not working, the rep learning to use the system, blah blah, but finally the manager got the job done & professionally. I was impressed by how much they tried to help me & to what extent they went to.
While I stood there waiting for them to find answers in the crystal ball, At-least 10 customers made returns. I noticed that at-least 6 of them had ‘unopened’ boxes. huh!!! Returns, replacements are a big deal. So, are returns possibly an opportunity or a big problem? lets find out.

Why Returns & clarity around it matters!

  • eCommerce returns are a whopping 30%, $20 billion from holiday season. However at Stores return rate is around 8-10% based on category.

  • It is the number 1 reason for a large category of people who continue to be offline shoppers instead of embracing online.

  • The possibility of repeat business goes up to 95% if your return policy or their return experience with you is good. [I often think about my experiences of initiating returns with Amazon or visiting BestBuy. They are just phenomenal!].

  • This possibility dips to 85% on the down side, if the return policy is tedious, difficult or unclear.

From a personal experience, it is often a ‘defect’ which lead me to return a product. I do a good amount of ‘learning’ & ‘fact finding’ upfront, so in most cases, I am not ‘experimenting’.

However, here are the key reasons why people return:

  • Product wasn’t what they wanted. Top Reason

  • Defective product or Merchandise

  • Size issues – Key reason especially in the retail sector of clothes and shoes. I know that the fashion industry is working on size standardization as it is a crippling issue.

  • Pricing Conflicts – finding the product at a better price somewhere else. A lot number of such returns may happen at stores [especially cross channel – newegg.com prices compared at a best buy store]. Retailers have brought in ‘price match’ since a long time to curb the pricing issue so this is not a big percentage for retailers. Bigger problem resulting from price conflicts is ‘profitability’.

  • Just overbought or don’t need it

Here are some points which should help converting this problem into opportunity

  • On the Store Front Side

  • In my view, ratings & reviews are probably the biggest driver to not only get people to buy, but buy the right product

  • Most often than not, healthy number of reviews make me buy, but reading reviews from other on their experience with a product helps me relate & envision my usage & experience

  • Make sure that Capturing Reviews & Ratings are an essential part of your email campaign strategy especially capturing feedback post a customer purchase. Incentivize your customers if you have to get their reviews on what they buy. Imagine, Trip Advisor wouldn’t be what it is, if it was not for user contribution and the several thousand reviews

  • Solid product details pages drive traffic, hook people in and also ‘help’ reduce returns. Contextual information, clear imagery, Rich content, and Detailed Specifications should be absolutely necessary for everything you sell online

  • Encourage user generated content. Feed from Instagram with real customers embracing your product is huge vs any other endorsement

Process

  • Make returns easy with adequate information (links, FAQs) on the process

  • Make your return, replacement, exchange policies clear on your website, stores etc.

  • The shopping cart page should stand out if you offer free returns or any cash back benefits that the customer should know about, it guarantees peace of mind to the customer

  • ‘Reasons of Return’ section – Personally I find this section the most important and still missing still at most places. At bestbuy, target, walmart and most places I have visited, I have noticed that they just ‘ask’ because they have to, but don’t necessarily really ‘get’ the information. Sometimes they just select whatever ‘reason code’ shows up first. While taking returns’ spend 30 seconds to 1 minute and capture information on ‘why’ they returned? This can be critical if an issue raised may not be a ‘defect’. Imagine how much valuable this information can be for further improvements.

So, here is my quick & dirty list on improving your returns scenario. Do let me know what you thoughts are on these and which methods are most helpful in this regard.

 

About Author:

Saurabh mittal
Director of Sales commerce solutions

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