Managing sales return rates

As business builds, more customers means more returns on your sales. While many retailers view high returns as a necessary evil, current rates (40% rise in North America in 2021 vs. 2020) are unsustainable. To take just one example from the fashion industry, approximately one truckload of clothing is sent to landfill every second, with returned stock making up a significant portion. According to returns management platform Optoro, just 50% of returns go back into inventory.
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Managing sales return rates
posted 21.11.2022
Sergiu Iscu
Sergiu Iscu
Article Author

Not only do returns on sales cost businesses an estimated $550B annually at a global scale, but our environment pays the price too. By learning how to reduce customer returns and implementing changes that address the leading causes of dissatisfaction among shoppers, businesses can alleviate this avoidable financial and environmental cost.

Here are a few tips that we think can help you reduce the amount of returns you are experiencing when selling online.

Above all, represent products accurately.

Product data plays a far more significant role for manufacturers and online retailers than what meets the eye. Because people want to know what they're buying.

One of the most common causes for returns involves the dreaded “product not as described” issue. In the online retail space, this can be a recurring issue. Customers can’t touch products. They’re forced to look at pictures and spec sheets.

Because of this, it’s important to accurately describe your products so customers are clear on what to expect when they purchase an item. How can you improve the product information you display on your e-commerce website? Here are some factors that come into play:

High-quality photos

The importance of good product photos can’t be understated. You’ll want to make sure your photos are high-res, taken from multiple angles, and clearly show things like the color of the product, or an important functional aspect. If this feels beyond your abilities, consider hiring a specialized photographer. The money spent getting good pictures to your online shop will quickly pay for itself with the reduced return rate and, of course, repeat purchases through higher customer satisfaction.

Can PIM help? Of course it can, because it allows you to better organize your digital assets in relation to your products.

Better product descriptions 

Images are only half the product story. You’ll also want to be sure your written product descriptions are accurate and contain all the relevant information a customer might need to know. Be sure to include dimensions, options, and other relevant information here. Having accurate content translations is also a must, when you market your products in more geographies.

Can PIM help? Of course, it will help a lot! We would argue that PIM is the best tool you can use for this purpose.

Represent sizing correctly, where sizes are involved

One of the most common causes for returns in the apparel industry is products not fitting. With online shoppers not being able to try on clothes before buying, it makes sense that items get returned because they don’t fit.

You can reduce the number of returns you receive over sizing issues by using tools like sizing software and sizing charts.

Can PIM help? It may. It just depends on how you link your sizing solution to your product data.
 

Encourage customer reviews and feedback. Get creative.

People trust other people. One of the great things about customer reviews is that potential customers tend to trust them more than a product description or your own marketing copy. Thus, encouraging customers to leave their own reviews and feedback on products they’ve purchased can go a long way in helping reduce the number of returns you receive.

Amazon is a master at this. Think of how many things you’ve bought from the giant online retailer, then think about how many times you’ve looked at the breakdown of 1-5 star ratings and read the most popular positive and negative reviews. Did those help you make a decision? If you’re like us, they did.

This is also a great tool for you to see how well received your products are by the market. If you’re not already taking advantage of customer reviews and feedback, it’s time to consider adding this valuable tool to your webshop.

Climate compensations 

One way of creating awareness, that in the long run might change a customer’s behavioral pattern, could be to offer the end customer the option to climate compensate for their returns. For example, climate compensation can go to an organization that plants trees. By understanding that returns harm the environment, the customer might change their buying and return behavior over time. For example by doing better research and choosing the right products to order. By offering voluntary climate compensation, you show that your company takes an environmental responsibility, while at the same making it clear that returns affect the environment negatively.

Gamification

By rewarding customers with a low return ratio, you can turn a negative behavior into a positive one. Companies like LinkedIn or Snapchat successfully use gamification to encourage their users to complete their profiles or use their services more frequently. The more you complete your LinkedIn-profile, the closer you get to becoming a star member.

What if your customer, while purchasing items online, is informed that he or she will be rewarded with 1€ off their next purchase if they don’t return any of the products they bought?

Another gamification-way to encourage customers not to buy products that they will likely return is to show a meter that tells them how much CO2 emission their returns have caused. The goal may be to stay below a 10% return rate to become a star-level customer, and star-level members always receive a 5% discount on all orders.

 

You can never afford to have dissatisfied customers, regardless of whether they actually return your products or not. But if your business is dealing with a significant returns rate, there is no doubt that you will need to analyze the causes. Serial returners? Of course you will have a few. But before everything else, find the products with the highest return rates and find the reasons why that happens, as they will likely have a common problem.

Can a PIM solution help you in the process of reducing the sales return rates? There is no doubt about it. In your relationship with customers, honesty is your most powerful asset. Your product data needs to reflect that and you need a good PIM in order to make it happen.

Sergiu Iscu
Sergiu Iscu
Article Author

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