How To Curb Product Returns in E-Commerce Stores

Lenient return policies attract customers to purchase from online stores—often on a whim. But while it may seem like these liberal rules lead to higher conversions, they can actually erode the overall profitability of online businesses.

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Product returns are one of the biggest challenges that online retailers face, costing them more than $550 billion every year due to the added expense of shipping, replacement, repackaging, restocking, and reselling. Without a proper returns management system in place, e-businesses are putting themselves at great financial risk. 

To put a cap on rising return rates, e-commerce stores must make policies inviting to their customers without jeopardizing future profits. While 70% of customers base their purchase decisions on the leniency of return policies, offering free shipping is not always the most clever option. Doing so can encourage serial returners to invade an online storefront knowing they can return products free of consequence. So it’s best to create return policies designed to regulate excessive return activities. Some retailers limit their customers to a specific number of free returns, which protects their profit margins and safeguards their businesses against possible returns fraud.


Aside from improving returns policies, some e-commerce businesses also enhance their customer service to reduce returns. Automation can help retailers steer clear of trouble, particularly order errors. Sending order confirmations with product details and shipping information is a good verification system that can minimize delivery mishaps. But e-commerce businesses should also enable their buyers to update or cancel orders without hassle. By building an efficient and automated system, businesses can significantly reduce their product return rates.

In addition, improving customer service also includes strengthening quality control. Most companies overlook quality control in their business processes, not understanding its importance in reducing return rates. Businesses must be able to monitor and evaluate the condition of their products before they’re even shipped to customers. Not only that, they must inspect how storage, fulfillment, and delivery are carried out by their teams or service providers. More often than not, these phases are the root cause of damaged products and incorrect deliveries. So through proper management of inventory, online retailers can limit financial losses related to damaged returned goods.

Lastly, businesses seeking to minimize product returns can benefit from strengthening the social proof of their sites. Encouraging customer feedback can generate higher conversion rates while also lowering product returns. Nowadays, social proof already plays a crucial role in influencing buying decisions as it offers consumers accurate product insights, reducing the possibility of purchasing errors. When businesses understand this, it becomes easier to protect themselves from the crushing and costly weight of excessive returns.

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