A good returns process creates customer loyalty

June 8, 2020
A good returns process creates customer loyalty

Customers already think about the return when they buy because they don’t want to experience complications if they aren't satisfied with their purchase. If an e-commerce shop offers a convenient returns solution they can increase customer loyalty. Use these top tips to create an optimal returns solution for better customer retention.

For many online retailers, the subject of returns is a perennial issue, they wish more customers would keep the goods. But the success of many shops is due in part to the fact that customers have the option of returning goods without any inconvenience if needed. 57 percent of global customers who have had a positive experience with returning goods return to purchase from the same shop (Metapack 2020).

According to Statista, Germans in particular use the return option. 53 percent stated that they had returned goods ordered in 2019, followed by the Dutch (51 percent) and the Italians (46 percent). Poles are the least likely to return goods but even here the figure was still 36 percent.

„57 percent of global customers who have had a positive experience with returns come back to the shop"Metapack, 2020
 

Proportion of people in selected European countries who have returned goods ordered online in the past twelve months in 2019The proportion of people in selected European countries who have returned goods ordered online in the past twelve months in 2019 (Source: Statista 2019)

For customers throughout Europe, the possibility of returning ordered products is a natural part of online shopping. For retailers, this means: If you want to retain customers, you should stand out with a good returns solution. Here are five tips to creating a successful return process:

1. Create clear return conditions

Online shoppers have become cautious: More than 73 percent of global consumers read the return conditions before making a purchase (Metapack 2020), 46 percent of international customers say that information on returns has already discouraged them from buying (Metapack 2019). 42 percent found it difficult to obtain information about returns (Metapack 2018).

These figures all speak the same language: no matter what country you are shipping to, the information on returns must be clearly formulated and understandable. Don’t risk customers clicking to the next shop because they don’t find what they’re looking for on the subject of returns, the “small print” puts them off or they simply don’t understand the language.

„46 percent of international customers say that information on returns has already deterred them from buying“
(Metapack, 2020)

 

Percentage of online shoppers for whom clear return conditions are a very important argument for buying in an online shop, in selected European countries in 2019

Percentage of online shoppers for whom clear return conditions are a very important argument for buying in an online shop, in selected European countries in 2019 (Source: Statista 2020)

2. Consider the cost of returns

The question that comes up again and again: Are there disadvantages for an online shop if the return isn't free? Does it deter customers or are they willing to pay?

Economic research at the University of Bamberg, Germany has shown that returns could be significantly reduced with a fee – and thus CO2 emissions. However, the question arises as to whether this is in the interests of e-commerce traders because the pricing would then be taken out of their hands in terms of returns.

In general, it is advisable to find one’s balance – and possibly also to adjust the return costs to the target country. After all, customer expectations vary in this respect. In Switzerland, the proportion of customers for whom a free return is an important criterion for online purchases is particularly high – it is 77 percent (Statista 2019). According to a recent representative study by the Austrian E-Commerce Quality Seal, 83 percent of Austrians use the option of returning goods, and for one-third, free returns are even a decisive factor in purchasing.

Retailers should consider which cost structure is best for their shop and processes. Offering a free return can possibly be “more economical” in the long term if customers use this convenience to visit the shop more often and place recurring orders.

„For 77 percent of Swiss customers, free returns are an important criterion for online purchases.“
(Swiss Post; School of Economics in Zurich/© Statista 2019)

„34.7 percent of Austrians order from the outset only from online providers who offer free return shipping.“
(Austrian e-commerce quality label, 2020)

43 percent of Germans think that returns would be reduced if all dealers were to charge
for returns.(YoGov © Statista 2020)

 

Do you think the number of returns, i.e. packages from online retailers that are returned by the customer, would be reduced if all online retailers were to charge for returns?

Do you think the number of returns, i.e. packages from online retailers that are returned by the customer, would be reduced if all online retailers were to charge for returns? (Source: YoGov © Statista 2020)

3. Create an easy returns process for your customers

If the ordered product does not turn out as desired, the buyer wants to return it as soon as possible. This process must be easy for customers, they also decide whether to reorder with regard to returns – 57 percent of global consumers would buy more from an online shop if the returns process were simpler (Metapack 2019). Retain exactly these customers! Make it clear from the outset that returns are unproblematic and keep this promise.

From the moment the customer has decided against the product, they must know exactly what to do. The most important thing is the return label, which your customer should be able to access without further complication.

Typically consumers have two options: Either the label is enclosed directly with the order or the customer needs to contact the shop’s customer support and requests the label. Both variants are cost-intensive for shops. In the first case, they have to provide labels that are often unnecessary. Secondly, they incur high costs in customer service. On average, retailers pay between 0.90 and 2.50 euros per transaction (Seven Senders 2020).

However, online shops also have a third option when it comes to generating return labels. With an online return portal, customers can download a return label online with just a few clicks.

" 57 percent of global consumers would buy more from an online shop if the returns process were easier." (Metapack, 2020)

4. Analyze data and optimize processes

Data provides valuable information on how to perfect the customer journey. Insights on carrier performance are particularly important for the delivery and return process. Dashboards and reports precisely tailored to your deliveries and returns make it easier to plan, make decisions quickly, and create more transparency – also for the customer.

An important benefit of efficient data analysis is the acceleration and improvement of processes. This is important to improve the overall customer experience and you as a retailer benefit from goods quickly returning to the sales floor.

5. Communicate proactively!

Especially when customers order from abroad, they wonder if their product will really arrive. Because only when the product has been returned safely will the buyer get their money back or be sure that there will be no problems regarding the refund.

Many retailers already make the delivery process customer-friendly with proactive tracking and status reports. However, the returns process often remains a mystery to customers. Send proactive status messages – in the local language of course – after the customer has dropped off their parcel at the drop-off point. Let them virtually accompany the return goods until they arrive back at the warehouse. Also, send them a message for credit if they have paid in advance.

Conclusion: Build customer loyalty through returns

Create a fast and convenient returns process and build customer loyalty. To do this, take care of all the individual parts of the returns process – whether it’s simply obtaining the return label, proactive communication around the return, or effective data analysis.

Look for simple and cost-effective solutions that save your in-house resources, so that the issue of returns is no longer a tiresome affair but a way to set yourself apart from the competition and satisfy your customers in the long term.

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