Jul 15 2007

Building Customer Loyalty from Order Returns

It’s something that practically all eCommerce merchants have to deal with – returns. We all dread them, but it’s a necessary evil. When handled correctly however, it will not only provide a service to your customers, but also encourage repeat business by establishing trust with the customer. Most retailers approach this procedure as a sale lost, but in actuality it presents you an opportunity – an opportunity to gain a long-term customer. How, might you ask?

Some of the biggest concerns that consumers have when shopping online is not only trusting the website at which their shopping, but also not being able to physically see, touch, and evaluate the products they’re about to buy. What if they don’t like it? What if it doesn’t fit? These are some of the risks consumers face when shopping online. One weapon in an online retailer’s arsenal for combating these fears is to have a consumer friendly return policy. And if you do – make sure you let your customers know about it while they’re shopping.

So what constitutes a consumer friendly return policy? This obviously varies by the type of product sold, but in general it involves constructing a pain-free returns process for your customers. Pre-printed return labels, online RMA requests, free returns (as in no restock fees), paid return shipping; these are all examples of methods employed by a number of the top online retailers. For those customers that have to make a return, this experience will be the biggest deciding factor in whether or not that consumer will shop at your site again.

We’ll use a recent shopping experience as an example of how online retailers should handle returns, and more importantly, how they use this process to gain valuable feedback from their customers. For this particular retailer, I’m able to complete the return process without having to pick up the phone, and in a matter of minutes.  From my account on their website, I’m able to pull up past orders and initiate the returns process directly from that screen.  With a few clicks, I was able to print pre-paid return labels, with my choice of USPS or UPS for the return.  I had my return label slapped on the box in no time, with my only inconvenience being driving to the nearest UPS store to drop it off. But as a consumer, I couldn’t have asked for an easier process (except if UPS had come to my door to pick it up) and that has instilled a sense of loyalty – I can trust these guys to shop there again without having to worry about something not fitting, or not meeting my expectations.  They’ve already received another order from me.

But besides the loyalty this retailer has now generated, they’ve also asked me a few (optional) questions to answer during the process. These questions cover why I was returning the product, would I shop there again, how did the product fit, is there anything they could have done to prevented the return, and what they can do to improve the shopping experience/return process. These few questions give them very valuable information about the shopping experience for their customers, as well as identify areas for improvement. What I found particularly nice, was that the feedback given about how “true to size” the product is, is actually gathered and displayed on the product details page as a % of people who thought it fit too small, too big, or just right. A great example of how consumer feedback can then be turned around to help other consumers – beyond the typical 5 star rating and reviews typically employed by retailers.

The importance placed in the return policy for most online retailers is oft overlooked. But, many savvy eCommerce merchants have properly identified how critical this return process can be, and have created an experience centered around the consumer. What return policy is best for you? A simple cost analysis can help you determine if what kind of policy makes most sense for you. But we’ll cover that in a later feature.

Kevin Eichelberger

Founder & CEO

Founded in 2008, Blue Acorn is the product of Kevin’s great passion and knowledge of all things eCommerce. Kevin’s data-driven approach has culminated in a strong, growing business that’s success is closely tied to the success of its clients. When he’s not immersing himself in eCommerce, Kevin works toward expanding Charleston’s tech community by serving as a board member for the Charleston Digital Corridor Foundation, and is also a mentor and advisor to several startups. A business-savvy technologist, you can find Kevin evangelizing about data, optimization and eCommerce.

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