Ecommerce returns pitfalls and solutions: Avoid these 4 common mistakes

Ecommerce brands don’t like returns – and neither do customers.

Sure, online shoppers love hassle-free, no-questions-asked return policies. But this doesn’t mean that navigating the returns process itself is enjoyable. Too often, the experience is full of friction and difficulty getting the desired outcome, whether that be a return, an exchange, or even just store credit. This is a serious issue when 80% of online customers in the U.S. say that a poor return experience would make them less likely to shop at a retailer again!

So ignoring returns–or worse, viewing them as requiring a punitive response to solve, will only leave your business in a worse place than where it started, with missed opportunities to retain revenue, boost customer satisfaction, and understand the root causes of high returns.

Why? Because returns aren’t going away any time soon. It’s set to get worse, rather than better. Retail returns surpassed $627.34 billion in 2023, and this is forecast to hold steady after the spike seen during the COVID-19 years. A super-strict return policy isn’t going to solve the returns problem – online shoppers will simply go elsewhere. Instead, you need to find a more sustainable, efficient approach to returns that can grow with your ecommerce business and reinforce positive return behaviors.

That starts by avoiding these common pitfalls in ecommerce returns management:

1. Not considering how your return policy will impact return behaviors

Customer decision-making surrounding returns doesn’t happen in a vacuum. Their willingness (or reluctance) to return often hinges on your returns policy. In fact, 82% of online consumers say that return policies dictate their shopping behaviors in some way. This isn’t simply a case of more flexible return policies equaling higher return volumes. In many cases, merchants can unintentionally discourage returns behavior that’s desirable for their business simply because they aren’t thinking about the impact on the customer.

For example, if your brand is receiving a lot of returns due to the wrong size or fit, this is a massive missed opportunity to retain revenue. But if your policy isn’t doing anything to steer customers towards exchanges instead of returns, they will default to returning items and taking a refund instead. The result? You lose revenue, and your customer ends up back at square one. Nobody wins.

Likewise, a higher volume of online returns over in-store returns can put a lot more strain on your return processing capabilities. In-store returns offer the opportunity to aggregate, sort and send merchandise back to the warehouse in one shipment, which is much easier on your operations team. Alternatively, items can be put straight back on the rack or shelf in-store for quick resale. But if customers aren’t unaware that in-store returns are an option, or aren’t incentivized to opt for a trip to the store, those more convenient in-store returns won’t become a regular occurrence.

What if instead of treating returns and exchanges equally under your policy, you offer your customers store credit or free shipping on their next order if they exchange that t-shirt, instead of returning it? What if you charged for return shipping on online returns, while in-store returns are ‘free'? Seeing your return policy as a vehicle to positively influence customer behavior is a positive step to retaining revenue and lowering your operational costs.

2. Not front footing the return process

It’s an often-quoted statistic that 20-30% of all ecommerce purchases are returned. So, if you aren’t putting this possibility front and center in how you interact with customers post-purchase, you’re doing them a massive disservice. Sure, you might have a liberal returns policy that allows customers to return when they change their mind. But there’s still a whole lot of friction in the return experience if a customer isn’t sure how to kickstart the return process.

Let’s say that a customer purchases a t-shirt online and finds out it’s the wrong size. But they don’t know how to make a return request, where the returned merchandise should be sent to or whether they can return at their local store. Why? Because your brand has made no effort to educate them. This immediately starts the return experience on a not-so-great note; feeling uncertain about this next step in the process can easily tip into frustration and disappointment, which kills any prospect of future sales.

Instead, think about how you can prime customers for a smoother return experience from day one. When you send out an email or SMS notification that their order has shipped, provide some information about the return process so that your customer knows exactly what to do if their order isn’t right. This can include:

• The length of time your customer has to make a return
• Whether they can return online or in-store
• A link to your return policy on-site
• A link to your return portal

3. Not having an SOP for handling returns in the warehouse

Most discussions about seamless return processing revolve around the customer-facing part of the equation. The priority is ensuring that online shoppers can submit return requests quickly and painlessly. But what happens once that returned merchandise finds its way back to the warehouse?

Many ecommerce brands and even 3PLs can get shy talking about the operational side of returns processing. Why? Because it isn’t glamorous. All returned merchandise needs to be unpacked, inspected, reconditioned and put back into stock as quickly as possible. But this cannot be solved through manpower alone; if you don’t have a solid, repeatable SOP for how to process returns, you and your team will end up reinventing the wheel every single time and wasting precious time. Meanwhile, that returns pile keeps getting bigger, taking up costly space in your warehouse and missing those finite resale opportunities.

Make sure that your SOP is prioritizing those items that have fewer opportunities for resale. This includes trend-prone merchandise like apparel and footwear, as well as seasonal merchandise that will end up requiring liquidation if it isn’t sold by a certain date i.e. holiday season items. Use your returns data to identify any patterns or trends in return volumes that could affect what happens in the warehouse; do clearance sales result in a spike in returns? If so, take the items that you are putting on sale and check whether your current SOP can handle those potential reconditioning demands.

4. Not partnering with a 3PL that prioritizes returns management

While most 3PLs market themselves as being able to manage end-to-end logistics seamlessly, it’s important to do your due diligence to check whether this is the case in reality. Returns are often an afterthought in logistics management. It’s much harder to automate than other tasks like order processing or picking and packing, and so often remains ‘clunky’ and lacking in efficiency – even when a partner has a great tech stack.

So, when you’re speaking to prospective 3PLs, ask about their returns management capabilities. What solutions do they integrate with? What technology do they use in the warehouse? Can they scale their returns operation up/down to manage intense spikes in return activity? These types of questions are key to assessing whether they are the right partner to support your ecommerce business and secure top-notch omnichannel fulfillment services.

As well as integrating with top return management solutions like Loop, Cart.com helps to elevate your customers’ post-purchase experience through seamless returns management. We help ecommerce brands identify resale opportunities, refurbish inventory, and restock items fast to reduce dead stock. Plus, we track all returned inventory throughout the process, so you always know exactly where your merchandise is–no surprises. Contact Cart.com today to learn more.