For an online retailer the Christmas period should be the most lucrative time of the year. Sales figures usually peak, profits rise and cheer is high.
But with all the excitement of selling comes the equally important (yet often overlooked) returns period.
It’s an inevitability, but when handled well, can ensure the New Year kicks off in an efficient and profitable fashion. Plus it help to keep customers happy and loyal.
The returns policy outlined on websites can have a substantial impact on sales. If it looks as if the process will be time-consuming, confusing and costly, the customer may not want to buy the item in the first place. Returns can cost companies and customers a lot of money, so ideally the process should be as simple as possible to gain those repeat customers.
Whilst there are new technologies emerging to try to tackle this issue, including online fitting rooms, this is unlikely to have a noticeable effect on numbers of returns until the process is perfect. This highlights the importance of getting your returns policy right as it will play a big role in your business.
When companies have a clear returns policy on their website e.g. free returns above a certain value, it nearly always increases sales at a greater rate.
The policy on returns should of course be different for different retailers. Typically there is an option for either a 28 day return or a 365 day return, and for fashion companies a shorter time period is preferred because trends come in and out of fashion so quickly. The same goes for companies offering electrical items as new technology emerges at such a rate that it would be out of date if the returns policy was much over a month. The returns policy should be dependent on the retailer and the product. Big vendors such as ASOS and Zappos are less affected by this and are able to give the 365 day returns policy.
Everyone has had a bad experience involving returns. As an online retailer the last thing you want is to fall into this category. To avoid this, back-end processes such as warehouse management systems need to be as efficient and accurate as possible. This will help determine when a return is made, that the product has been returned in its entirety and that it is applicable to approve a refund or exchange for the customer. A good back-end system will also help to ensure that the product can be re-listed in the inventory and made available for re-sale back on the website.
Without these parts in place though, returns can be a frustrating process for the customer.
Following Christmas and New Year customers are likely to be busy taking down Christmas decorations and returning to work. The last thing many of them want to do is work on complicated returns forms in order to return unwanted Christmas gifts. The last thing people want to be doing is frantically looking in the packaging for the details of the returns process – if they still have it that is. Even if they do, many will find that the details are not there, so they go to the website and search for them. After a few minutes frantically clicking away they may be found, and subsequently they have to fill in the details of the order, print a package slip, find an envelope big enough, find the time to go to the post office, buy stamps, make sure there are enough stamps for the weight and size of the package and finally send it off. With fingers crossed, they hope that it will get back to the company. Few receive a confirmation email or any clarification that the company have received the item, no updates, they just have to hope for the best.
The returns process should require minimal effort and the details and returns slip should be included in the original package so no messing around with printing is required. Often the customer is provided with one tracking number but when there are several items to be returned this is not very reassuring.
For returns, the satisfactory period between sending an item back, the item being back live on the website again and the money refunded to the customer, is 24 hours. If warehouses had the ability to authorise refunds, rather than just the finance department, it can really speed up the process. Some companies have a threshold of £100 for items to be auto approved in the warehouse to increase efficiency.
Everyone leads busy frantic lives these days, people just do not have as much time as they used to – hence shopping online in the first place. It is all about convenience, and if the returns process is particularly laborious it is unlikely the customer will come back. So the trick is to make the returns process as simple as possible for the customer which can be achieved by having clear and easy-to-follow instructions. You also have to make sure the item is back online and the money is refunded within 24 hours to increase customer satisfaction and retention. After-all, if your returns process is slick and fast that customer may just end up spending more throughout the year and not just at Christmas.
Jonathan Bellwood is CEO and Founder of warehouse management systems company Peoplevox.