Block Serial Returners from Your Webshop in 5 Steps

Here is an in-depth look at how blocking just 0.8% of customers from making purchases resulted in a 16% drop in return costs

1. Identifying problem customers

Every business has a few customers you might be better off without. While the vast majority of customers are genuine shoppers, a small segment may return items too frequently, leading to escalating costs. It is well worth identifying these 'serial returners' and adjusting your strategy to account for their behavior. With Returnista, you can quickly gain insight into which customers are costing you money rather than generating profit.

2. Understanding the impact of returns

The surface-level costs of a return might seem to only involve refunding the customer and logistics fees, but in reality, it involves much more than that. Below is a breakdown of the various types of costs:

- Processing returns: Every return involves multiple steps: receiving the item, inspecting it, updating inventory records, and processing refunds. These steps require labor and time, which translates into costs.

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- Restocking fees: While not every product can be immediately restocked, most can. This incurs restocking costs.

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-Storage costs: Space is money. Returned products sometimes occupy storage space for extended periods while awaiting inspection or repackaging.

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- Potential product loss: Not all returned products can be resold. Some items may be damaged or have damaged packaging, rendering them unsellable. This results in direct product loss.

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- Shipping and handling: Depending on your return policy, you may have to cover the shipping costs for returned items. Even if customers pay for return shipping, there are still processing and potential repackaging costs.

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- Missed sales opportunities: If a product is frequently returned and out of stock, other genuine buyers miss out. This leads to lost sales opportunities and may drive customers to competitors.

3. A strategic move: quality over quantity

After studying serial returners, the company realized that a small 0.8% of customers were responsible for a large portion of these costs. The decision to block these specific customers is aimed at long-term savings and efficiency.

4. Results in numbers: A 16% decrease

By focusing on this small segment and understanding the deep impact of returns, the company saw a significant 16% drop in return-related costs.

5. Lessons and actionable insights

Actionable Takeaway: Dive into your data. Understand the true costs behind every return. If a specific customer segment consistently causes high return costs, consider strategies to effectively reduce this.

Want to block certain customers? You can here for Shopify

In e-commerce, understanding the intricate details can help improve processes, save costs, and provide a better shopping experience for the majority.

Curious which part of your customer base is driving up your total return costs? Get in touch