In a perfect world, every customer would be satisfied with the items they purchase online the moment they receive them. In the real world, business owners need to prepare to handle returns in a fast and efficient manner. The way a company handles returns can sometimes be more important than the way items get shipped in the first place. A recent study from Voxware found that a company’s return policy has a large effect on customer loyalty and repeat business.
According to the study from Voxware, the lion’s share of consumers consider the return policy when deciding on which companies to return to. Nearly everyone (97 percent) of respondents stated that the return process is important to their future intentions to shop with a retailer.
The inverse is also true. Customers can be turned off to a company has an inaccurate or drawn out return process. About three out of four (73 percent) of respondents said that when they receive an incorrect item after already returning it once, they are much less likely to shop with that retailer online or by phone again for future purchases.
Similarly, 45 percent of respondents who experienced a continuous return process issues with particular retailers stated that they have limited shopping with that retailer altogether. Worse still, the respondents said they would limit their shopping with a retailer both online and in-store. So a poor online return process can cost a business in-store traffic.
The study gives a little insight on what customers expect from online retailers when it comes to returns. About one in four (26 percent) respondents said they expected the correct item to be shipped to them within one to two days after returning the incorrect item.
Another interesting thing to note is that many mistakes come from the retailer, not the consumer. Though 57 percent stated that the reason they return items is that they did not like the item once seeing it in-person, 54 percent cited getting the correct item, but it is the incorrect size or color. And 25 percent stated they returned items that were the incorrect item altogether. When asked which happened most frequently, the same three reasons were listed in the same order.
“This research proves that the majority of the time, consumers return products due to retailer error,” says Keith Philips, the President and CEO of Voxware in a press release. “Mistakes in the supply chain are happening all too frequently, which not only increase distribution costs, but also severely impact customer satisfaction, customer loyalty, and ultimately bottom lines. Online shopping and consumer expectations will only continue to increase.”
Having an easy-to-use return process for online and over-the-phone orders is something that many businesses struggle with, as reflected by the Voware survey respondents. A little over half (59 percent) of respondents, stated that ‘returning products bought online or by phone is moderately easy but annoying’. Also, nearly 10% said that the return process is ‘difficult’.
A good return policy is also a good selling point for businesses that are selling items online. People are worried about getting the wrong item and having to fight with the retailer to get the item they wanted. Businesses with easy-to-use return policies should advertise that on the site and at checkout. Think of it this way: say there are two sites offering the same item, at the same price and shipping. One site says they have an easy-to-use return policy in case there are any issues and the other doesn’t. A consumer on the fence about who to shop with will feel more at ease with a retailer they know will help them in case of a problem.
Returns suck for a business, but they’re a part of the game. How well a business handles these situations can help them build a lasting relationship with their customers. And has been discussed in previous articles, customer loyalty has a high value for businesses over the long run.
For more information on things online retailers can do to improve their sites, read this article on how adding videos to product pages can increase average order values.