Processing D2C returns: 3 essential components

The returns process is a challenge for every webshop. To make matters more complex, every industry and business model comes with its own unique set of challenges to consider.

When you choose to sell directly to the end user (D2C) as a manufacturer, rather than through a reseller, you have to take charge of the returns process and handle your own returns. 

If you want to prevent your returns process from becoming a major expense, we recommend asking yourself a few key questions: 

• What is an acceptable return rate? 
• Which carriers will you partner with? 
• How can you keep your return costs as low as possible?
  

In the article below, we will guide you through the answers to these questions and explain the 3 essential components of processing D2C returns.

1. What is an acceptable return rate?

Practically every webshop has to deal with returns. The higher your return rate, the more products you have to take back after delivery. Naturally, you want this percentage to be as low as possible. 

To answer this question accurately, we can look at average return rates by industry. For example, the average for (women's) clothing is around 40%, which is significantly higher than for electronics (16%) or furniture (10%).

You could therefore argue that a return rate below 40% should be the minimum goal for a (women's) clothing store. For electronics and furniture, this percentage is even lower. 

To arrive at an accurate return rate, you must also include any exchanges and issued store credit in your calculation.

2. Which carriers will you partner with?

You cannot treat all the consumers you serve as a D2C e-commerce business the same way. Their preferences regarding receiving and returning products can vary significantly.

For instance, one customer might prioritize having packages picked up at their home, while another might be concerned about the environmental footprint of the transport. The distance to a drop-off point for returns can also impact the purchasing process.

Reason enough to always employ a multi-carrier strategy so that your customers can choose which provider they prefer to handle their returns. Here are some of the most popular carriers:

• UPS. One of the world's largest parcel carriers. With UPS, you can offer printerless returns using a barcode on your phone.
• DHL. In the Netherlands alone, DHL offers 3,500 parcel points. You can also offer printerless home pickup with DHL. 
• DPD. This is the second-largest player in the European parcel delivery market. 
• Brenger. This carrier is perfect for transporting large products and makes highly efficient use of their unique smart network. 
• Homerr. A sustainable and social solution for receiving and returning packages.

3. How can you keep your D2C return costs as low as possible?

High return rates can be a major expense for your D2C webshop. There are several ways you can ensure you lower your return rate and, consequently, your costs:

1. Clear and thorough product descriptions. This ensures your customers know exactly what to expect from their order, leaving no room for surprises.
2. High-resolution product photos and videos. With high-resolution photos, you leave nothing to your customers' imagination.
3. Encourage customer reviews. Reading customer reviews removes uncertainty for your customers beforehand and gives them a clear picture of what to expect.  
4. Excellent customer service experience. Some issues can be resolved with good customer service, preventing them from turning into returns.
5. Data-driven optimizations. Analyze your return data and use the insights to make improvements to your offering.
6. Optimize the customer experience for mobile devices. Mobile-first e-commerce has grown significantly in recent years. Design your D2C webshop with this in mind to reduce the risk of poor purchasing decisions.
7. Encourage exchanges. Instead of viewing returns as a cost, you can turn them into a growth formula. Is the size too big? Offer a smaller size during the return request process.
   

We highly recommend this last tip to every D2C e-commerce business. By offering exchanges based on live inventory, you can convert up to 40% of your returns into exchanges.

It is also possible to let customers continue shopping immediately during the return process with a coupon equal to the purchase amount. This way, your customers can still spend that amount in your webshop, and you retain more revenue. 

Do you want to know how to better process D2C returns? 

With the global return solution from Returnista, you can optimize and automate the entire return process. This leads to a drastic reduction in the number of returns, allowing you to generate more revenue.

Want to know more? Request a demo on our website.