Product Returns And How To Avoid Them
Thiss is a retail term used to describe when a customer returns a product they purchased. Product returns are part of the fulfillment process. If you don’t have a system in place for product returns, it can be a big black eye for your business.
How your business handles product returns is important.
So, why do customers return products? At times, the why is clear and at other times, not so much. Understanding consumer behavior can help you with this matter.
While many people feel that product returns are just a part of “doing business,” the bottom line is that product returns are unavoidable. No matter how prepared your business is, returns are going to be a part of the process.
When you understand why consumers behave in this way, it can help you detect patterns later on. Also, this gives you time to create prevention and detection strategies for product returns.
Understanding consumer behavior can help you mitigate returns and chargebacks too. Returned merchandise can be a big problem for your business, it’s still better than a chargeback.
Returns Versus Chargebacks
Consumers returning products impacts the seller. The process looks as follows;
- Seller refunds the customer’s money, usually including shipping cost.
- Restock returned product, if possible
- Product may be sold for less
This is not a good scenario for the seller. You lose the sale. You pay restocking fees and, worse yet, the returned product sells for less. If this becomes routine in your business, there’s no question product returns can hit your bottom line hard.
Now, what happens to the seller if there’s a chargeback?
- The seller loses the sale.
- The seller also loses the delivered product.
- Each chargeback includes a fee, usually around $18-$20.
- Chargeback-to-transition ratio becomes high, causing a lot of problems.
With product returns, the seller has an opportunity to get their revenue back. Usually, with a chargeback, you’ll lose money or worse.
This is why it’s important to understand why product returns happen, so you can better protect your business with the appropriate systems and processes.
Let’s look at the top reasons consumers return merchandise.
Customer Buys The Wrong Product
This is a consistent problem we see with a lot of ecommerce businesses. You have to remember, ecommerce buyers are not physically touching your product, this is why we see higher product returns in ecommerce.
As an example, someone may buy a large shirt but it doesn’t fit like a typical large shirt they’re use to. You can prevent this.
Let’s use this same scenario. Since customers can’t touch the product, this is where images, videos and detailed product descriptions can help a lot. For this customer, it would of been helpful for us to mention you should buy a size larger than you normally wear. Q&A sections provide valuable ordering information.
Give your customers as much information as you can. You can reduce product returns in the future.
The Product Was Damaged
You sent a damaged product. The customer is going to be angry. And, rightfully so. There’s a few things we can do to prevent this in the future.
- Quality Control: Make sure products are double-checked for damage.
- Only use shipping partners you trust.
- Handle and package products with care
- Add shipping insurance to build trust.
A Product Is No Longer Needed
In this scenario customers buy a product but realize later they have no need for it. Sure, you can call it impulse shopping but it happens.
Again, a lot of businesses just feel it’s a part of the process that will just happen, you can’t avoid them. Yes, you can, and we can show you how.
Make sure you highlight the features and benefits of your products. Make sure your product descriptions are accurate but detailed.
Shipped The Wrong Product
Product returns happen because sellers ship the wrong product to a customer. The wrong product was sent. Your customer is going to be angry. And they should be. Unlike a damaged product that happens during shipping, this was a mistake in your order fulfillment process.
Moreover, sending the wrong product causes a lot of problems, like chargebacks, negative reviews, lost sales.
This is where Quality Control can help your business. In conclusion, there’s nothing wrong with double-checking your fulfillment processes. At the most, it takes an extra second or two but it’s well worth it to prevent product returns.