How to Use Holiday Returns to Increase eCommerce Profits

by Carolina Cano-Espinoza | Customer Satisfaction, eCommerce Strategy, Holiday Fulfillment

Congratulations on surviving yet another record-breaking holiday shopping season! But before you can tally your profits, you must deal with the inevitable result of increased sales — increased returns.

Hopefully, you’ve done all you can to reduce online returns this holiday season, from optimizing your store’s returns policy and product descriptions on your eCommerce site, to improving your online order fulfillment process to ensure 100% order accuracy. Now it’s time to get smart about returns to retain profits and create repeat customers.

Image: Holiday Returns Infographic, Shorr Packaging Corp., 2014

 

Start with the Reason behind the Return

A comprehensive returns policy that follows the best recommended practices will keep your returns rate low. However, some returns are inevitable. You should expect a small percentage of return orders for reasons such as:

  • The customer ordered the incorrect product or size
  • The product did not meet expectations of the customer
  • The customer no longer has a need for the product ordered
  • The product was purchased as a gift and was not a good fit
  • The customer changed his/her mind about the purchase, also known as buyer’s remorse

Take the time to understand both your customer and the reason for their return, in the first step of the returns process.

Upsell to Improve Customer Satisfaction & Increase Profits

Delivering an exceptional customer experience during each step of the purchase leads to happy customers and increases customer lifetime value. A happy customer experience shouldn’t be derailed by your returns process. When a customer contacts you with a return request you have a unique opportunity to create a deeper relationship, and even generate additional sales by upselling.

If a customer is unsatisfied with the purchase because the product does not meet expectations, the customer no longer has that particular need, or was gifted the product and is not a good fit — upselling can help offset the cost of the return. Offer an upgraded version of the original purchase with features unique to the upgrade.

An upgraded version of a product the customer originally wanted may meet or even exceed
your customer’s needs. The additional revenue provided by the upsell will allow you to cover costs of the return and save your holiday profits.

Create a Profitable System to Cross-Sell Exchangeable Returns

A customer may be satisfied with their eCommerce purchase, but ordered an incorrect size or received the wrong color. Take advantage of this opportunity to cross-sell while exchanging the original item with additional complementary products.

Help your customer by presenting products that pair well with their previous online purchase. Not only will the additional sale offset some costs of the return, it will serve as reinforcement of their original buy. The key is to ensure your cross-sell items offer customers a valuable addition to their purchase.

Solve Buyer’s Remorse to Reduce Your Losses

Lastly, is the case of the customer experiencing buyer’s remorse. Admit it… We all know that post-purchase feeling of buying something we “really” do not need.

Offering a less expensive or similar product of a customer’s original purchase may satisfy the
original desire, while alleviating purchase guilt. Using this technique can help you reduce your losses by saving the sale and retaining a future customer.

It all comes down to understanding your customer and delivering a positive customer experience. Make the process easy by utilizing tools like these Shopify Apps, which automate upselling and focus on customer satisfaction throughout each step of the purchase cycle.

It’s Time to Get Smart About Returns

Partnering with RSL for online order fulfillment ensures eCommerce orders and returns are handled quickly and with 100% accuracy. With RSL’s dedicated client support team, returns are easy and hassle-free. Contact an RSL fulfillment advisor today to find out how to get smart about fulfillment and optimize your return processes for a successful new year.