Why Your Online Return Policy Is Killing Sales

The online product return policy that you offer at your store is a lot more powerful than you may think. It has the potential to encourage sales or kill them outright. Did you know that 63% of shoppers actually take the time to read your return policy before they make a buying decision? What your policy says or does not say makes a big difference in whether or not the sale is completed.

Fortunately, with some simple changes to your procedure, you do have the ability to compete better with rival online retailers. Is your return policy preventing sales? Here are nine reasons why it may require a makeover.

Have you ever read a return policy from a retailer that seemed to have a restriction or limitation on just about every type of return? Tragically, this type of a policy used to be more commonplace. When you see the restrictions, it really doesn’t make you feel confident buying something from that retailer.

Most people just think about going to Amazon instead, or buying locally at Target, two places that make returns a breeze. The fact of the matter is that if you don’t make returns easy, shoppers won’t bother to give you a second chance. The next time around, they’ll just take their business to a store that doesn’t make returns a hassle.

Try to avoid charging return shipping fees if at all possible. A UPS Pulse of The Online Shopper report found that 67% of shoppers do not want to pay return shipping on their online purchases.

Additionally, the report also revealed these key metrics:

• 58% want a no-questions-asked return policy.
• 47% want an easy-to-printed or in-the-box return label.

One other key statistic that was identified in this report is that returns actually give you a second-chance sales opportunity. That’s because 70% of consumers make a new purchase when returning items to a physical store, and 42% make a new purchase when returning items to an online store. But if you are charging return shipping fees, don’t expect to get those second-chance upsells.

Customers want an easy and efficient way to return products that didn’t work out. Making returns hard just means that they’ll go somewhere else in the future. If you want to win over customers, you have to make your returns as easy as your purchasing is. Nobody wants to deal with the hassle of hard-to-return products.

Proof of this is found in a Forrester study that was conducted on behalf of UPS. The data culled here reveals that 81% of shoppers want an easy and streamlined way to return products they’ve purchased online. Simply put: if you make returns hard, people won’t shop at your store in the future, and you will be killing your sales potential.

Lenient returns are desired by the vast majority of consumers, as we’ve highlighted above in our previous points. Without leniency, you’ll be pissing off your customers. An unhappy customer does more than just go to another brand; they also tell other potential customers not to shop at your store in the future, too. It’s a double-whammy that results in less sales coming your way.

To make your customers happy, a Small Biz Trends publication advises that you do the following:

• Offer 90-days to return items, defeating the industry standard of 30-days by a large margin.
• Honor cash, debit and gift card returns alike.
• Set general return standards on electronics and clothing that are in par with other competing stores.
• Make exceptions on items that are on clearance or that are marked as “no-return” items.

How long does it take for a customer to return a product to your online store, and how many steps are required? If the process is time-consuming, don’t expect the same customers to return to your online store for a future purchase. But, if you make returns simple, straightforward and convenient, you can fully expect customer loyalty to improve.

A Practical Commerce article emphasizes this point, advising that: “…how your business treats returns should be part of a long-term strategy aimed at developing repeat customers.”

When you win over customers, you also improve your long term sales strategy. An Adobe White Paper is the proof in the pudding here. It finds that returning customers actually spend between three and five times more when they come back for repeat purchases.

By making returns hassle-free and simple, you’ll stand to benefit from improved customer loyalty and more repeat-buying. A study from Lee University agrees with this logic, finding that consumers who receive a free return from an online store spend at least 58% more at the time of their next visit.

How does your return policy stack up against your competitor’s? If your competitor is offering the same products at the same pricing thresholds, but is beating you with their return policy, they already have the upper hand. The entire purpose of competition is to outdo your competitor and earn the customer’s business. A return policy is an innate value of an online purchase, but only if you make it so.

Highlighting this key point is a University of North Carolina study that finds that you can use your return policy to improve business and the customer model. The study concludes that leniency in the return policy delivers long term benefits and profits, and results in increased customer loyalty and retention. Would you rather that your rival store be reaping this reward; or shouldn’t you be doing everything that you can to win over customers for the long term?

If you do not have a return policy in place, say goodbye to just about any customers you could ever attract. Remember, you are competing with Amazon and others. While it’s not really a mandatory law that you offer product returns that are convenient, they are to be expected by the consumer from anywhere they’d go to buy a product.

Failure to integrate a product return policy whatsoever translates to you basically telling your customers that no matter what, you’re keeping their money. According to Pitney Bowes, consumer trust is one of the most import metrics in driving sales. Without it, you are dead in the water. Period.

If your return policy reads like a wall of text, there’s something wrong. A return policy should be simple, to the point and straightforward, or you will lose customers. Confusing returns have become, sadly, a fact of life at many online and brick and mortar retailers. This has led to so much confusion that governing bodies have reached out to consumers to provide advice.

For example, the state of Michigan advises that: “Online shoppers should scrutinize a merchant’s website to determine whether returns are allowed and, if so, what a consumer must do to return an item.”

In short, making returns confusing has led to consumer distrust among brands. Trust is one of the most important factors in a consumer making a purchase at any online store, where they have the inability to see or feel products prior to purchase. Make sure you are not hindering sales by confusing your prospective shoppers with a wall of text that is supposed to be your return policy.

As we mentioned above, 80% of customers want returns to be simple and convenient. If you do not feature an automated online product return policy, you are killing sales. In the past, automating your return policy required the build-out of custom software that many small to medium-sized online stores could not afford.

But today, automation of your return policy is a reality with newer product return systems like ReadyReturns. Now you can setup a fully automated returns system in your online store in a just a few steps, so you can offer Amazon-like returns and never worry about losing another customer again.