Many happy returns

By taking the friction out of returns, direct-to-consumer (DTC) brands can open routes to higher spend and new customers, says Jonathan Sheard, Vice President, Sales at ESW.

While we all want to believe that the total number of returns in retail and direct to consumer business may one day fall, most companies have now come round to accept that they are an everyday fact of commerce and not always to be regarded as a great evil.

This is particularly true when thinking about serial returners who are nevertheless loyal and high-spending customers. And customers who are influential on the decisions made by other customers. And those customers who will continue to buy partly as a result of a positive returns experience.

And of course not forgetting customers who will not shop again with a brand with whom they have had a bad returns experience. In all these cohorts, there is value in offering a returns service that, in the world of luxury, should match as far as possible the original order experience.

This is a more positive way to look at returns rather than getting constantly side-tracked by the myriad reasons customers return in the first place, particularly as this deep dive investigation often leads to adjustments in communications and fulfilment that are not sustainable because they cost too much money against the benefits received.

Therefore, the big win is to be had not just by investing in reducing returns, particularly where the return on that investment eventually stops improving, but in eliminating the friction customers associate with returns, even to the extent of making it so easy that returns are actually encouraged.

Creating an ideal returns service first depends on all parts of the business (as well as vendors) that affect returns collaborating, notably customer service, delivery service, warehouse, inventory management, finance or accounting.

Six key areas to consider

Free shipping there and back

Given that 56% of all abandoned carts are due to shipping-related concerns at checkout, ideally brands should offer free outbound shipping as well as returns shipping. Where this is not possible, a returns label should be provided so it’s easy for the customer to send goods back. If return postage is paid by the brand, it can always be deducted from the shopper’s refund. Whatever the share of charges, it is important that brands communicate clearly so the shopper knows how much of their purchase will be refunded.

Local return portals

To reduce the cost of customer service and optimise reverse logistics, brands should have a localised, branded return portal as part of their online store. These portals, in the local language, allow customers to self-serve and get more control over their experience. Customer service should be staffed during local hours and representatives should be native speakers.

The portal should accommodate various credit rules and reason codes to determine shopper refund value, and so that brands will be able to process returns quickly and efficiently.

Tap into personal preferences

This approach in turn enables brands to understand individual preferences so they can adjust accordingly. Some shoppers in a certain market may prefer pre-printed return labels they can affix and put in the post. Others may prefer to return an item to a physical location or store. Localising returns also means they get processed quicker and customers track the progress of their return and refund.

Returns options to suit all customers

Shoppers now expect a much wider variety of options when returning goods, giving them control over when and how they return. The most common options are courier pick up, return in-store, postal delivery and drop off to third-party locations. Psychologically, control over returns gives customers greater confidence in the brand, which will in turn lead to greater loyalty to help generate future sales.

Tracking for confidence

It is common to provide tracking for original orders and this should be extended to returns. Providing return shipment tracking will help give shoppers peace of mind that their parcel is in safe hands, and if any delays arise, it will reduce queries to customer service.

Fast refunds

Ultimately, guiding all these services should be speed. 62% of customers expect to receive their refund within 30 days of purchase and any delay in processing a return contributes to a negative post-purchase experience. As a result, more and more DTC brands aim to process refunds within 14 business days, a capability that is made easy where there are in-country returns hubs. This approach is also good for brands because items returned quickly can be resold quickly.

Depending on how returns are handled, they are either a threat or an opportunity.  Brands that treat them increasingly with the same care and attention they lavish on the original order are most definitely in the latter category.

Jonathan Sheard, Vice President, Sales at ESW

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