E-Commerce companies can't increase transactions by hiring more salespeople for their stores. But there is an excellent counterintuitive strategy: having an excellent return policy.
Why would having an awesome return policy actually make you sell more? Zappos discovered that 95% of their customers who are able to make easy returns will come back. Excellent return policies for e-commerce stores encourage shoppers to try out items and see if they like them.
Essentially, think about it like this: At a brick and mortar store, customers are easily able to test-drive products. They can touch them, try them on, smell them, etc. Much of the time, they will put the product back where they got it from (or leave it on the fitting room floor, inside out - same thing). But they will typically buy at least one thing that they played with. eCommerce stores can’t really offer that try-then-buy experience (although some, like, StitchFix, are trying too), so an eCommerce store has to make their returns crazy easy so that customers can buy-then-try.
So how do you make an amazing returns policy that will turn your shoppers into loyal customers? Try some of these tried-and-true techniques that other eCommerce stores use.
Keep it simple. The most important thing to do is make your returns policy extremely simple, and place it clearly on your site. That means: don’t have a thousand hurdles for your customer to cross and ensure that the copy on your returns policy page is simple. As an example, let me show you one of my favorite company’s return policies and how they display it.
Modcloth makes their return policy clear from the moment you enter the site, using a small banner that follows you from page to page. In the screenshot I’m using, the banner is at the bottom, but typically they place this banner at the top.
Free returns, or offer return incentives. Zappos has found huge success with offer totally free returns and free shipping, even though they have a 50% return rate. That sounds almost impossible, but when ecomdash’s CEO Nick Maglosky does the math, it makes a lot more sense:
Zappos offers many shoes that cost thousands of dollars. If shipping costs about $6, and two customers buy about $3000 worth of shoes, they’re taking a hit of $20 make a $1500 sale if they offer free shipping and returns. Even if they have to “pay” $20 to make a $100, that’s an 80% profit.
If you can’t offer completely free returns, you can follow in Modcloth’s shoes. Modcloth makes exchanges for a different size or color in the same item totally free, and if you’re exchanging for a different item, the return is free and you get $5 of store credit. If you’re straight up returning, you pay the $6 shipping fee, but that’s it. That $5 of store credit is a great idea - it offers a strong incentive for customers to try a different product from your site, rather than giving up on you altogether. (PS Notice in the screenshot above how they made the “+ $5 Bonus” green so it would stand out? That’s genius! You should definitely replicate that.)
Ship the return materials with the item. It might seem odd to send customers the materials they need to use to return your items - as if you’re telling them that you expect them to hate your products. But it actually sends a totally different message. Sending the return materials tells your customer that you won’t be satisfied unless they’re satisfied, and more: that you want to make the process to their satisfaction as easy as possible.
Many companies just send a return label in the box or bag, and expect you to figure out what to return the item in. Which is better than expecting your customer to print the return label from your site, or making your customer go down to the post office and figure it out themselves. But you could do better than that.
My personal favorite returns material experience comes from a company called Stitchfix. Stitchfix sends a returns bag that already has the label stuck to it along with the items you buy. The bag is completely ready to go. All you have to do is stuff the clothes you don’t want into it, peel off the tape, shut it, and toss it in your mailbox. It’s crazy simple. If your company can follow suit, you will discover a lot of happy, returning customers.
Cara Wood is a marketing associate at Capterra.