That statement isn’t from me, but it has been uttered by many business leaders when faced with disappointing online sales.
If I was in your shoes, I’d probably believe the same. Think about it, as a business owner or leader, you have to pay for the “pick and pack” of an order, the cost of delivery transportation, the cost of return transportation, and the cost of restocking. And to top it all off, you need to reimburse your client. The key word in all of this is “client”. If you have your consumers’ needs at heart and want to gain new customers while retaining current ones, the process that I’ve just described is what it costs to operate an online business.
The first question you should ask yourself: what kind of products do I sell online?
If you are selling electronic devices, you can expect your rate of return to be relatively low. However, if you are selling clothing, you need to seriously think about your return policy. For the rest of the article, I’ll be assuming you are in the fashion industry and that returns are an integral part of your business model. In this industry, the rate of return for items purchased online is 20%.
The second question you need to ask yourself: is the clothing I sell also for sale on other websites, and if so, what is their return policy?
Did you know that one cybershopper out of five does not go through with purchasing the items in their cart because they do not like the return policy?  Think of the last time you went shopping for clothes. You probably tried them in the fitting room to make sure you liked the size and cut. Would you have gone through with the purchase if the sales attendant had prohibited you from trying out any item or exchanging or returning them? Imagine you are now online, you are unable to touch the item of clothing or hold it up to see if it fits you.
Third, let’s suppose you are considering a return policy. Should it be free?
Not at all! Your policy must be clear, simple, and convenient for your clients. Do you have physical stores? If so, you could offer free exchanges and reimbursements in your stores. But if the client prefers to return the item by mail, you could provide this service for a flat fee. The idea is to quickly provide the information to the client when they’re in the process of buying something on your website. A cybershopper will understand that there is a $5 flat fee, for example, to return any item they do not like.
The client pays $100 for a product and they are ready to wait a few days before receiving it even though they’ve already spent the money. They receive the item and want to return it. You still have their money and in a few days, you’ll also have the item they returned in your warehouse. You could credit them $95, because the return fee clearly described on your online policy mentioned a $5 flat fee. Your client will have experienced an easy return process by using the pre-paid return label included in the box.
“The idea is to quickly provide the information to the client when they’re in the process of buying something on your website.”
However, if your staff has made a mistake and the colour is not the right one, your client will not want to be held responsible and will want to return the item for free. You must now find a way to not lose this sale. Was the size the wrong one? If that is the case, you could offer to immediately send them a smaller or larger size.
Get inspired by two websites that have integrated the best return policies: Simons and Reitmans.
In conclusion, a clear, simple, and convenient return policy on your website will increase your sales without augmenting the percentage of returns. A large Quebec retailer told us they experienced a 30% sales increase when they added a return policy on their website. In my next article, I’ll address the topic of Amazon. Are they your competitor, your ally, or simply a market disrupter? See you soon.
“A large Quebec retailer told us they experienced a 30% sales increase when they added a return policy on their website”
To find out more about the logistics and financial aspects of e-commerce: