Reducing Return Rates: 7 Practical Tips

The e-commerce world is growing steadily, and there is no sign of that slowing down anytime soon. That is great news for all online stores, but growth often comes with growing pains.

Unlike in-store purchases, online shopping carries the risk that an item might not fit, look different than it did in the photos, or get damaged during delivery.

This means that the growth of the e-commerce industry naturally leads to an increase in returns. As an e-commerce manager, you want to handle this smartly. A solid approach helps you reduce the number of returns and build a healthier business.

We have figured out how you can return rate lower using 7 easy-to-implement tips. 

No time to read? You can download these 7 handy tips to lower your return rate here.

High return rates: a massive expense

For consumers, free shipping is often more important than fast delivery. This also applies to your return policy: if you want your sales figures and online store to grow, you will need to offer free returns.

However, this does mean that your return rate is more likely to rise. Customers who can return items for free are more likely to make a "risky purchase" just to see if they like it. This can lead to a large influx of returns.

The costs of these returns will be on you. It is therefore important to ensure this does not get out of hand and to keep your return rate under control. 

How do you calculate your online store's return rate?

The return rate is calculated by dividing the number of returned products by the total number of products sold and then multiplying by 100%.

The formula is as follows: return rate = (number of returned products / total number of products sold) * 100%.

For example, if you have received 23 returns and sold 367 products, you can calculate the return rate as follows: (23/367) * 100% = 6.3%.

Does the return period affect the return rate?

A longer return period makes it more likely that consumers will keep a product. This phenomenon can be explained by several factors. First, the emotional attachment to a purchase can grow stronger as time passes.

Furthermore, the urgency to return the product quickly may diminish. Consumers may therefore put off the thought of returning a product or even forget about it entirely.

Research shows that online stores that allow customers to return products within 14 days have an average return rate of 47%.

If the return period is extended to 30 days, this percentage drops to 37%. If the period is longer than 30 days, the return rate is just 25%.

This suggests that extending the return period can be an effective way to reduce the number of returns (Source: Thuiswinkel.org).

7 tips for lowering your return rate

1. Use clear and thorough product descriptions

Lowering return rates starts before the purchase is even made. By providing your online products with clear descriptions, you can make a difference early on.

Customers want to know exactly what they are buying. The more information you can provide in the product description, the lower the chance of a return. 

When writing clear and thorough product descriptions, keep the following in mind:

• Always keep your ideal customer in mind when you start writing
• Use product descriptions to answer frequently asked questions before the purchase
• Include as much product information as possible and leave nothing to the imagination
• Tell the unique story of your products in an imaginative way
• Add plenty of social proof, such as visual reviews (more on this later)
• Make sure your product descriptions are easy to scan
• Don't forget to optimize your copy for search engines as well
• Include information about the fit
  

If you take the factors above into account, your product descriptions are guaranteed to contribute to a lower return rate. Furthermore, this will also have a positive impact on your sales figures. 

2. Use high-resolution photos and videos

To ensure your customers aren't disappointed with their purchase, it's important to use high-resolution imagery. This increases the likelihood that the customer's expectations will match reality.

Always include multiple high-quality photos of the product. Make sure they are taken from several angles. 

Even better, use 360-degree photos or even short product videos. Again, high resolution is essential for this type of visual content.

Do you sell products that come with instructions? A video that explains step-by-step how to use the product can be very helpful.

Using this type of visual content will ensure more conversions, higher customer satisfaction, and minimized return rates.

3. Allow customers to write reviews for each product

Another way to ensure a customer's expectations of a purchase match reality is through reviews. Why are customer reviews so important for lowering your return rate?

First, it is important to understand why customer reviews are a form of social proof that is crucial for every e-commerce business. The following three principles underlie customer reviews as social proof principles: 

1. Uncertainty. When customers are unsure about making a purchase, they will look for the opinions of other customers. Reviews can easily eliminate this uncertainty.
2. Social Proof. People are herd animals and tend to perform the same actions as those they identify with. In the case of e-commerce, potential customers identify more with other customers than with you as the seller.
3. Expertise. In times of uncertainty, people are more likely to trust an expert or someone with relevant experience. Previous customers have experience with your products and are therefore experts in that area.
   

You can therefore view customer reviews as another form of user-generated product information. By adding these to your product pages, you ensure that potential customers are less likely to be caught off guard. This is reflected in lower return rates. 

Furthermore, this tip also leads to higher sales figures. Research shows that the likelihood of purchase increases by 270% when you display at least 5 reviews, compared to no reviews at all.

4. Create an excellent customer service experience

Returns in e-commerce are inevitable. Things cannot always go perfectly, and return rates are naturally higher than in traditional retail, where customers can hold a product in their hands before making a purchase.

Eliminating e-commerce returns is simply not possible. You will never achieve a 0% return rate. 

What you can do is ensure that your returns are handled as effectively as possible, for example by using real-time proactive status updates.

Apart from that, it is important that your customer service department is always easily accessible. Potential customers may also have questions before a purchase is made. 

By clearly showing that your customer service team is ready to answer these questions, you will later in the customer journey end up with a lower return rate. 

5. Analyze your data and implement improvements

To keep your return rate as low as possible, it is important to analyze your data as thoroughly as possible. Start by examining your return flow. With data insights down to the SKUlevel, you can identify which products are returned more frequently.

You can use these insights to dive into the reasons for these returns. Be sure to also take a close look at customer reviews for those specific products. You may also need to determine whether improvements can be made to product quality.

Using this data-driven process, you can find out which products are underperforming. Adjust your webshop accordingly to reduce your return rate.

We asked more than 2,519 consumers what it takes for them to make a repeat purchase from an online store. Download our Industry Report 2021 to find out their answers.

6. Optimize the customer experience for mobile

Between 2016 and 2021, mobile commerce each year increased by an average of 29.8%. It is therefore essential to keep the mobile customer experience in mind when setting up your webshop. 

At the very least, ask yourself the following questions during this optimization process: 

• Is information about products and sizes just as easy to find on mobile as it is on the desktop version of your webshop?
• Can potential customers contact your customer service department just as easily? 
• Are all photos and videos optimized for a mobile customer experience? 
  

Ensure that your webshop meets the above requirements and more. It is crucial to align the desktop and mobile experience of your webshop as closely as possible, so that mobile users do not drive up your return rate. 

7. Encourage exchanges

You can use every return request as an opportunity to encourage an exchange. Take, for example, the fact that in 52% of return requests the reason for the request is the wrong size.

By asking for the reason during the return request, you can immediately offer an exchange based on your live inventory. 

Every exchange is one less return, and therefore contributes to lowering your return rate. This is how you turn a potential cost into revenue retention.

You can also download these 7 tips to reduce your return rate to review at your convenience later.

Do you want to reduce your return rate too?

With Returnista's return software, you can encourage exchanges by syncing your inventory. Customers can request an exchange directly within the return portal during their return request.

You can also use this software to gain full visibility into your entire return flow, down to the SKU level. This helps you analyze your return data and make data-driven optimizations. This will also help you reduce your return rate in no time.

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