How to handle customer returns

While there are several things you can do to minimize returns, they will always be part of running a retail or eCommerce business. That’s why it’s essential to have robust policies and procedures for handling returns.

When managed properly, returns can provide opportunities to drive conversions and loyalty, especially when you implement marketing strategies during the returns process. They also serve as valuable touchpoints for gathering customer feedback and making data-driven improvements.

For these reasons, you must ensure that your operations and teams are equipped with solutions to stay on top of returns. 

Read on to learn how to do just that.

Common reasons for customer returns

To effectively handle returns, it’s best to understand why they happen in the first place. Depending on the industry, the top reason for a return can vary. For example, in Fashion, the most common reason for returns are fit and size issues.

Across the board, though, the most common reason that a customer returns an item is that they received a damaged or defective product. In some cases, this can be prevented by quality control and/or better packaging of the product when it ships. On the other hand, the product could end up damaged en route to the customer, regardless of preparation.

Then, the other reasons for returns are buyer’s remorse, fraud, and items delivered later than expected. Now, you can’t control buyer’s remorse, but you can make it more difficult for shoppers to commit return fraud and display more accurate delivery dates.

To address these return reasons appropriately, you should have a solid system in place to collect return data and improve the process as a whole.

Methods for handling returns

There are several methods and channels to handle returns. Depending on your business, you can choose to accept returns in-store, online, or both. Our advice is to give consumers the option to return across online and offline channels. That way, they can choose the option that is best for them.

Let’s look closer at the different channels you can use when accepting and processing eCommerce returns. 

In-store returns

Implementing in-store returns means allowing customers to return their online purchases in-store. Retailers with brick-and-mortar locations typically implement this return method. 

Here’s how in-store returns work:

Customers head to the store to return their items. Then, store teams inspect the items. Depending on the condition of the goods, they may be put back on the shelf, refurbished, or disposed of. 

It’s worth noting that you may still be able to implement in-store returns even if you don’t have a physical store.

Consider teaming up with a brick-and-mortar retailer or another facility that can handle in-person returns. 
Amazon, for example, allows customers to return items in select Kohl’s or Whole Foods locations. 

Warehouse returns

Warehouse returns take place when customers send back their orders via mail. Here’s how it works:

Customers initiate the return process online, usually through a self-service return portal, and follow the steps outlined in the return policy. 

Upon approval, customers receive a Return Merchandise Authorization (RMA) number and a prepaid shipping label or QR code via email or directly in their online account. 

Customers package the items securely, affix the shipping label, and drop off the package at a designated carrier location. 

Once the returned items arrive at the warehouse, they undergo inspection to assess their condition. The items may be restocked, refurbished, or disposed of depending on the condition. 

After the inspection, customers are notified of the status of their return, and any applicable refunds or exchanges are processed accordingly.

Outsourced logistics

eCommerce returns have multiple moving parts and can be quite complex, especially if you have a large and distributed customer base. That’s why some merchants use third-party logistics companies that can handle returns for them. 

Outsourced returns management means teaming up with a Third-Party Logistics (3PL) provider that specializes in handling the various aspects of the returns process. This can include everything from receiving and inspecting returned goods to restocking, refurbishing, or disposing of items.

The importance of a return policy and setting clear returns guidelines

Whatever your process is for handling returns, you need to ensure that it’s backed by a solid returns policy. Ironing out your policy and setting clear guidelines are crucial for several reasons.

A good returns policy promotes trust and transparency

Clearly stating what and when it is acceptable to return an item in your return policy establishes transparency, which builds trust between you and your customers. Your return policy should be easily findable. This means including it on your product detail pages, in your post-purchase communications, and in your return portal. People are more likely to purchase from you if they know they have a hassle-free experience. 

Ensure compliance

Be aware of consumer protection laws around returns, and make sure you adhere to them. Having a well-documented returns policy that complies with the necessary regulations can help you minimize legal and regulatory risks.

It makes you more efficient

Having a well-documented policy will guide your team in handling returns so they can manage returns efficiently. A good policy also ensures consistency in how returns are dealt with, regardless of who takes care of them. 

A returns policy can influence purchase decisions

NRF’s Retail Returns Landscape report shows that 82% of shoppers check the return policy when shopping with that brand for the first time. This means that your returns policy isn’t just a backend consideration; it’s an important customer-facing tool. And when you have a good returns policy in place, customers may be more inclined to buy.

Return policy section	Description
Timeframe	Specify the time within which returns can be made.
Condition	Describe the condition the product must be in to be eligible for return
Refund process	Outline whether you offer refunds, exchanges, or store credit.
Return channels	Indicate where and how products can be returned.
Procedures	Walk customers through the process of initiating a return.
Exceptions	Clearly state any exceptions or items that are not eligible for return.

What to include in your returns policy

Now that we’ve tackled the benefits of a returns policy, let’s discuss what it should look like. Generally speaking, a good returns policy outlines the following:

Time frame for returns

Specify the time frame for when returns can be made. What is your return cut-off time? Many retailers set a time frame of 30 or 60 days, while others are more lenient.

Note that you can adjust your time frames depending on the product. It’s not uncommon for brands to have a different policy for high-value items like jewelry or electronics. 

You can also adjust your policy depending on the time of year. Many retailers expand their returns cut-off during the holiday season. That’s because this is a period when many purchases are made as gifts. Extending the return window accommodates the gift-receiver, who might not have the opportunity to evaluate the gift until the holiday is over. 

Product condition

Your returns policy should also have guidelines around the condition in which products can be returned. Should they be returned in their original packaging? How will you determine if something is used or worn? Make sure you establish your eligibility criteria to avoid issues down the road. 

Refund process

Outline how refunds (or lack thereof) are handled. If you’re issuing refunds, specify how long it’ll take and the method by which customers can expect the funds. If you’re not offering refunds, your policy must also state that and indicate that you’ll only be allowing exchanges or issuing store credit.

Return channels

Ensure your policy sheds light on the methods and channels customers can use to return their products. If you’re accepting online returns to your warehouse (or 3PL’s facilities), indicate who is responsible for shipping costs.

Returns procedures

In line with the section on returns channels, it’s also helpful to outline the steps customers should take to ensure a smooth returns process. What actions should they take to initiate a return? How can they obtain the necessary information or documents (like shipping labels) to return their purchases?

Exceptions

Finally, if you have products that aren’t eligible for returns, specify what those items are so customers know that they’re purchasing something that’s a final sale. 

Streamline customer returns by leveraging self-service return portals

To truly offer a seamless experience, you should be leveraging a flexible self-service return portal. This portal should make the returns process faster and more efficient, increasing customer satisfaction.

Not only should your return portal be equipped to properly handle returns, but it should also encourage customers to exchange or accept store credit. The returns management software that you use should be able to work with your return rules to try to recover revenue.

For example, if an item is defective, the customer can choose to exchange that item for another item. Or, if someone ordered a Yeti water bottle, but it was a smaller size than they expected, they should be given the option to exchange it for the larger size. This way, the customer is happy, and you get to keep that revenue that would have been lost to a return.

From a business operations perspective, a standardized, automated process ensures that all returns are handled consistently, reducing the likelihood of errors or discrepancies. Additionally, return portals can also collect data on why customers return items. This information can be super valuable for identifying trends, improving products, and tailoring future marketing efforts.

Keep your customers in the loop during the process

Another vital component of returns management strategy lies in post-purchase communications. Just as you would proactively communicate tracking updates and send shipping notifications when customers make a purchase, you should also extend the same level of diligence to the returns process.

Rather than a generic-looking email, send a message that’s aligned with your brand’s look and feel. Every communication you send from pre-purchase to post-purchase and returns should be consistent. When a returns experience can make or break whether a customer shops with you again, it is important that this journey doesn’t differ just because they had to make a return.

Additionally, the return communications should empower customers to track the journey of their package back to your warehouse or 3PL. This helps set the right expectations, particularly when it comes to their refund. It also frees up your team from having to deal with WISMR (Where is my return?) inquiries because the customer is proactively informed throughout the process. 

Gather feedback on the return journey

The best way to improve your returns process (and overall shopping experience) is to collect data and input from your customers. You should incorporate feedback surveys within your return portal and in your returns communication. After all, it’s helpful to know:

• Why they’re returning a product

• How they feel about the customer experience
• The ease and speed of the return and refund process
• What they think about the returns or shipping options
• How your process compares to other retailers

Understanding these factors allows you to spot areas of improvement so you can make changes and enhance the post-purchase journey even more. 

Final words

Returns can be challenging to deal with, but there are several steps you can take to streamline the process for both your business and your customers. Start by having a solid policy and ensure your operations are backed with robust tools and technologies that can simplify the returns experience. 

If you are interested in learning more about how to reduce your return rates, we have the blog for you.