Nov 14 2018

Holiday Showdown: How to Use Returns to Compete with Retail Giants

For most brands, the holiday season leads to increased site visits, sales, and new customers. This all sounds great, but this also results in more returns. Online returns during the holiday season surge to 30 percent, up from the 20 percent average, and as high as 50 percent for more expensive items.

The customer return experience is where your brand can shine against the retail giants during the holidays. If you look at Amazon’s return policy, you will see multiple policies varying by product type. For example, customers can return baby items within 90 days, only certain clothing items come with free returns, they must return collectibles in their original packaging, and they cannot return pet food or groceries, but the seller may refund the purchase.

For items sold by Amazon, customers can return them within 30 days. However, if the item is sold from a third-party seller (it’s estimated that about half of the items sold on the site are through a third-party), it is up to the seller to create a return policy. These varying return policies cause convoluted and confusing experiences for shoppers. Additionally, Amazon has no control over the messaging and communications between third-party sellers and the customers—leaving room for inconsistent experiences from purchase to purchase.

Amazon’s lackluster returns experience provides brands the opportunity to stand out through consistent communication, easier returns, and quicker refunds. “When planning for the holidays, embrace product returns and build your brand around great customer experience,” says Karen Fitzgerald, senior marketing manager at Returnly.

6 Ways to Compete with Amazon Through Returns

1. Promote Your Return Policy

The holiday season is an emotional time for shoppers and sales run almost every day leading up to the end of the year. As a result, customers make more impulsive purchases—in 2016, 48 percent more consumers made an impulse purchase than during the non-holiday season. If you have a hassle-free, flexible return policy, promote this early before the holiday season fully kicks off. Even if you don’t offer free returns, promote other features that will connect with the customer, such as return shipment tracking, your omnichannel return experience, or the length of the return period—anything that will put the customer at ease during the experience.

When experts estimate that consumers read the return policy 67 to 80 percent of the time, you want to place the return policy in an easy-to-spot location on the site. Pages to consider promoting the return policy are the homepage, product display page, and the checkout page. “This will give your customers the peace of mind and encouragement they need to make the purchase,” says Fitzgerald.

2. Simplified Return Policy

Consumers will be more likely to trust your brand when the policy is clear, concise and easily understood. Fitzgerald suggests, “Build a dedicated page for your returns policy that clearly explains your process using simple, easy-to-understand language. If your policy is too complicated, it causes confusion, doubt and added holiday stress. This drives up calls to your support center and cuts into spending.”  Ideally, the policy would only take a minute or two to read through.

The policy should include:

  • The steps to return an item
  • Restocking fee (if applicable)
  • Qualification requirements for returns and refunds
  • If the return label and packing slip are included
  • Who pays for the return shipping fee
  • Where the item can be returned (post, physical store, warehouse, etc.)
  • If a gift receipt or original receipt is required to make a return in-store
  • The return period (clarify if it’s business days)

To minimize the number of returns during the holiday season, some brands will label specific items as “final sale.” In other words, the shopper cannot return the item, and the brand will not issue a refund if the customer changes their mind or does not like the product. If you choose this route, clearly label these products as “final sale” and provide a clear definition during the checkout process.

3. Refund and Return Channel Flexibility

Today’s consumer expects the same type of omnichannel shopping experience to carry over into the return experience. This means providing multiple avenues for returning an item, including by mail, physical store, or warehouse. In fact, almost half of shoppers prefer to return to a physical store—something they could not do if they purchased the item through Amazon.

Another important factor for holiday shoppers is the return period. Holiday shoppers may buy something for a friend, family member, or significant other but the item doesn’t fit or wasn’t right for the person on the receiving end of the gift. Offering an extended return period of 60 or 90 days during the holiday season allows both the giver and the receiver time to consider the purchase before it’s too late to return or exchange.

Also, consider how you want to refund your customers. There are multiple ways to refund your customers: exchange for a new item of the same or similar value, offer a full refund equivalent to the purchase amount or provide store credit or a gift card the customer can use at a later time.

4. Tracking Returns

Too often, a customer places their return in the mail and has no idea where it goes after that. Until your brand issues a refund to the customer’s debit or credit card, they don’t know if the package reached the company. Transparency breeds trust, so by making this piece of the process as transparent as possible benefits both you and your shoppers. Send confirmation emails when the order ships and returns the store, along with information on how quickly they can expect a refund. If the return didn’t meet the qualifications, send the customer a note explaining why.

Ongoing and consistent email communications throughout the return process will free up your customer service team to focus on other important tasks such as product recommendations, upselling and cross-selling, and building customer loyalty.

5. Test, Optimize, Repeat

While many ecommerce sites go into a code freeze leading up to and during the holiday season, there are small tests you can run to learn more about your holiday shoppers. For example, you can A/B test placement of the return policy on the site, length of the return policy, or return-related promotional campaigns. Or, take a note from Internet Retailer, buy products from your competitors, and your own store, and compare what you did or did not like for each brand’s return experience.

6. Solicit Customer Feedback

Your customer return policy doesn’t need to remain static. As your customer care team speaks to customers about their return experience, take the feedback to make updates to the policy. When speaking with customers, ask specific questions, such as was the return period long enough, was the package convenient to return, or how long did it take you to find the return policy.

As you’re reading this, you may be thinking “Won’t this lead to an increased return rate?” Many brands found that by providing a streamlined return experience, customers are more satisfied and more loyal. In fact, 95 percent of customers will go back to an online merchant and make an additional purchase after a positive return or exchange experience. A recent report, Zappos CEO Tony Hsieh said: “Our returns run high—more than a third of our gross revenue—but we’ve learned that customers will buy more and be happier in the long run if we can remove most of the risk from shopping at Zappos.”

Shannon Kenneally

Media Marketing Specialist

After graduating from Clemson, Shannon started her career in marketing, focusing on content creation and engagement. As Blue Acorn’s Content Writer, she keeps clients and customers up-to-date on the latest trends and news in the ecommerce world. In her free time, she enjoys running with her dog and checking out the local breweries in Charleston.

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