This article looks at six of the most common return triggers, as well as how to avoid them in the first place and boost retail efficiency
It doesn’t matter whether you’re a brick-and-mortar seller, an ecommerce merchant, or somewhere in between. For most retailers, returns are an unavoidable part of doing business.
Consumers returned an estimated $428 billion in merchandise to retailers in 2020. That’s approximately 10.6 per cent of total U.S. retail sales during that year. It’s a serious concern for all merchants, but operating in a digital environment does introduce challenges that physical retailers don’t need to consider.
Sometimes it’s obvious what triggers a return. In other cases, a return may require some in-depth investigation before you get to the bottom of the matter. You can’t rely on the accuracy of the given reason for a return, as refund abuse is the fastest-growing fraud threat reported by merchants in 2020.
Customers might deliberately abuse the process, or they might do it without even realizing it. The difficulty of paring down possible return triggers and identifying sources depends on your business model, product category, and a whole host of other variables.
6 Common Return Triggers
All that said, did you know you can trace most returns to one of six primary causes? Let’s have a look at each one, and see what we can do to eliminate return triggers wherever possible:
#1. The Customer Purchased the Wrong Item
Online customers don’t have any face-to-face contact with your merchandise before they click “buy.” Shoppers rely entirely on your product descriptions to help guide their decision, which is why you need to make those descriptions as clear and precise as possible.
Your job is to answer all your customers’ questions—even the ones they haven’t thought of yet.
Offer detailed product descriptions, giving shoppers a full rundown and what the product does, and how it works. Video clips of the product in use can be extremely helpful in the decision-making process. The same goes for detailed, high-resolution photos showing the item from multiple different angles.
#2. The Item Didn’t Meet the Customer’s Expectations
You obviously want to explain to your customers why your products are worth their investment. However, there’s a fine line between good salesmanship and overpromising. You can’t blame your customers for making returns if they believe you promised something which they don’t receive.
Keep that fine line in mind when you’re trying to win over your customer. Always show your products in the best light, but never suggest that they will offer anything more than what the customer can reasonably expect upon delivery. Remember that old mantra: under-promise and over-deliver. Like the last item we discussed, setting clear expectations through detailed descriptions, videos, and images can go a long way to prevent returns.
#3. The Item is Not Needed
Moving to a new house, upgrading to a different device, getting married: any one of these could be reason for a customer to return an item if she no longer believes she needs it. However, you can still turn this objection around if you’re willing to be flexible.
Highlighting the unique features and advantages of your product might be enough to convince your customer to keep the item. If that doesn’t work, try offering a bonus for product exchanges. For example, you could offer a 10% bonus credit if the customer exchanges the item or accepts store credit instead of returning it for cash.
#4. The Item Was Damaged or Defective or the Wrong Item Was Received
You can’t control what happens to an item after it leaves your facility. Even with careful attention to detail, accidents can—and will—still happen at every phase in the fulfilment process. That said, you want to do everything in your power to avoid these nightmare scenarios, so the best thing to do is cover your bases.
Manually double-check every shipment for accuracy before it’s packaged, comparing the goods against the invoice. Then, ensure that everything is packed carefully and securely so nothing will be damaged by normal shaking or agitation that occurs during shipping.
Once it’s ready to go, be sure that you work only with a reputable shipping provider. You should also remind customers multiple times if you have a “satisfaction guarantee.” This will drive home in shoppers’ minds that you’re willing to work with them to resolve issues where necessary.
#5. Incorrect Gift Purchase
Many customers make gift purchases based on what they think a friend or loved one will like. Naturally, this is going to lead to a lot of returns.
You can try to minimize these incidents by offering free product guides to shoppers. These curated guides are especially popular around the holiday season because they help shoppers find relevant items based on the recipient’s interests.
Gift cards are a popular option as well. If you offer gift cards, you should push these as a gift item for anyone unsure of what to buy for someone else. Keep in mind, though, that gift cards can present challenges of their own; gift card fraud is one of the fastest-growing threats facing the market today.
#6. The Customer Is Trying to Cheat You
Of course, there are also situations in which the customer is blatantly abusing the chargeback process to try and “get something for free.”
“Wardrobing” describes the practice of buying an item, using it once or twice, and then returning it for a refund. This practice is blatantly unethical, but still very common, and is just one of many ways a cardholder can engage in refund abuse.
You’ll have to choose between two options if you suspect the customer is trying to pull off a return fraud scheme: accept the return, or refuse it and risk a chargeback (a forced payment reversal). That’s a dangerous gamble, but if you opt for the latter, be sure that you have compelling evidence to fight the chargeback when the time comes. Otherwise, you might lose the revenue, as well as the merchandise, plus suffer an added chargeback fee and take a hit to your chargeback-to-transaction ratio.
Increase Sales & Prevent Return Triggers: The Power is in Your Hands.
You’re never going to be able to prevent refunds entirely. However, many of the refunds currently impacting your bottom line could be preventable.
With the right practices in place, you can boost sales and increase conversions without worrying about a correlated spike in return activity. However, you have to move carefully, and deploy these tactics with precision.
