Returns have become the ‘new normal’ for your online customers. But we know that the increasing e-commerce return rates are a big challenge for you. 

According to surveys, 57% of online store owners said that dealing with returns has a negative impact on the day-to-day running of their business. Reducing the level of returns can help enhance customer satisfaction, and help reduce costs.

So, what can eCommerce businesses do to reduce the level of returns? The average return rate of your eCommerce business can be reduced if you follow the 7 Best Practices elaborated below. We will also discuss some of the major eCommerce return statistics.

Table of Contents:

Ecommerce Return Rate Statistics and Trends

Have you ever thought what is the return rate for brick-and-mortar stores? 9% of items bought in a brick-and-mortar store are returned. Keeping this in mind, let us see what is the average eCommerce return rate? Data suggests that the average return rate in the e-commerce industry is 18.1%. This is higher than the brick and mortar stores.  Now, let us have a detailed look into the eCommerce return rate statistics.

  • In 2021, online purchase returns spaned in almost all major product categories, ranging from 8% to 88%. 
  • Clothing retailers experience eCommerce returns the most. Their product return rate analysis shows that 88% of consumers had decided to return their orders. 
  • 73% of online shoppers indicated that the return experience affects their choice to purchase from a retailer again.
  • Ecommerce returns statistics show that almost 20% of returned merchandise in 2020 in the U.S. was auto parts.
  • 76% of first-time shoppers said that they are likely to purchase with a retailer again if the return experience was ‘easy’ or ‘very easy.’

What are the Reasons For Ecommerce Product Returns?

The customer purchased with the intent to return

Research has revealed that  41% of consumers have purchased multiple items with the intent to return some of them. Similarly, 19% of consumers purchase multiple sizes of similar versions of the product, so that they can decide once the product has arrived. This is because they know that the brand has a flexible return policy and provides a full refund.

Damaged product

When the delivered product is damaged, before or during the shipping process online customers return the products. 

Inaccurate description

If the delivered product doesn’t match the displayed description, customers are most likely to return the product. Description of the product and the arrived product may vary in style, color, texture, or design.

Delayed delivery

When the product arrives too late, some of the customers will return it. A common reason for this is that the customer might not need the ordered product anymore.

Incorrect product 

If the delivered product is not what the customer ordered. your customers will return the product for sure. And this is often an unsatisfied shopping experience for the customer. And most likely they won’t purchase from such online stores.

Incorrect size

When the delivered product doesn’t fit the customer a return will happen. Ordering wrong size products are very common in the e-commerce industry.

Malfunctioning product 

Returns happen if the delivered product is not working properly or if it is not working at all. 

Change of mind

When the customers simply change their minds about the delivered products or don’t like the product they will return the product.

1. A Transparent Product Return and Refund Policy

Your customer should be fully informed about your terms of service. Interestingly enough, more than 80 percent of customers go through the returns policy before buying a product. And that’s why you need to make sure that you have a return policy in place that is easily accessible to your visitors.

In fact, 56% of consumers had been deterred from shopping due to an eCommerce site’s returns policies. With a transparent and well-defined return policy, you retain the right not to resend or refund a product. For example, if the product has been visibly tampered with, disassembled, etc. you can choose not to process the return. So don’t forget to clarify the expected condition of returns. 

You must define the condition a product must be in before a return can be processed. If not, your customers will return products that are too poor to be resold. This will cost you a lot. So, a well-written return policy will help you increase online sales and lower the eCommerce return rate.

2. Include Accurate Product Descriptions

High-quality product content plays a critical role in the purchasing decisions of your online consumers. Did you know that 50% of online customers have returned an item they bought online because it didn’t match the product description? The more informed your customers are on exactly what they’re buying, the less likely they are to make a wrong purchase. 

Do you want more proof? Here it is! 

  • 87% of online buyers rate product content extremely or very important when deciding to buy.
  • 98% of customers have been dissuaded from finalizing a purchase because of incomplete or incorrect content.

For this reason, make sure you provide as much information as possible in the product description. By writing out your product descriptions so that they contain accurate information on the product, you will allow customers to realize exactly what they are about to buy. 

Remember that the product specification is the type of content online consumers desires the most. Therefore, it should contain product dimensions, color, texture, list of removable parts (if any), including other technical specifications.

To put it differently, if you are running a beauty products store, you should do a great job at informing its customers about the products you are selling. Because of the sensitive and personal nature of the products, your customers might be interested in understanding the ingredients that go into the products they purchase and any potential health risks associated with them. If possible, incorporate a user manual, so there is no uncertainty as to what the product is and how exactly it is used. 

3. Provide High-Quality Product Images and Video

Your customer isn’t physically seeing the product before purchasing. Consequently, it becomes more important to wow them with visuals that show the quality of your brand. Indeed, 75% of online shoppers rely on product photos when deciding on a potential purchase.

If the consumers find a product that interests them, there is an expectation for multiple hi-resolution product images. Studies show that 22% of returns occur because the product looks different in person. Hence, these images should be shot from different angles and include close-ups so that every aspect of the product is visible.

Increasing the number of images of the product improves sell-through. Including more than three to five images on a product page is an effective tactic to drive more add-to-carts and increased conversions, but also to reduce eCommerce returns.

Go one step further by including product videos. Did you know that your products are more likely to sell if you create product videos?  Research has shown that 73% of visitors who watch product videos will make a purchase. Furthermore, 55% of consumers use videos for purchase decisions. 

Thus, if your product images and videos go well, then the chances of wrong purchases are too low. This will help you reduce your e-commerce return rates.

4. Convert Refunds into Exchanges

When customers initiate a return for exchange, you don’t lose out on a sale. That is why exchanges are way better than refunds.

Let’s dive deeper!

Research has shown that 57% of consumers replace the item they purchased and only 16% return the product and switch to a different retailer to find the same product. So, before processing the return, it is better if you ask why your customer is returning the product. 

Once you get the reason behind the return, suggest alternative items. You can save the sale with a seamless swap for a similar product, or even a completely different product. Maybe they would want a different style, color, or size of the same product, or there might be a better product.

Also, you can incentivize subsequent purchases. For instance, offer a 10-20% bonus on returns if the customer will take store credit instead of a refund. You’re changing what would have been a revenue loss into a recovering sale.

5. Request and Reward Customer Reviews

Utilize customer-generated reviews as a way to reduce your returns. Reviews will allow your customers to discuss issues that may normally drive returns. Studies reveal that 72% of consumers trust online reviews as much as personal recommendations. So reviews are important!

PetCo reported that products with customer reviews had a 20.3% lower return rate than those that didn’t. Therefore, introduce a beneficial process that motivates customers to leave a review on the products they purchase. 

You could offer a discount on their next purchase, a freebie or a cashback, or a scratch card for reviewing your products. This will help you in identifying issues that people are facing with your product. Further, try to enforce the feedback that your customer has provided in their reviews and boost your product quality.

6. Protect Your Online Store Against Fraud

Many of your consumers out there might take advantage of your flexible return policy. Customers purchase a product, use or wear it once, and return it in hopes of a full refund. 9% of online buyers have revealed that they have ordered an item just to take a picture for social media and then return it. And this ‘Wardrobing’ has become more common nowadays.

Serial returners are a challenge to your eCommerce store. Return fraud represents 6.5% of total returns, worth almost $23 billion annually. 

The best way to prevent this is to identify these high-risk returners in your customer base. Watch their returning habits and collect enough data to substantiate their fraud.

In 2018, Amazon instituted a lifetime ban on customers who habitually return products. Likewise, you can block them from purchasing your products in the future.

However, before you take such an extreme step, it’s best to inform your customers via email or on the online store website itself that the customer base is consciously monitored for such behaviors.

7. Make Packaging A Priority

You can get ahead of the game if you make product packaging a top priority. There are many ways to prevent shipping damages and lower your costs. 

Here are some:

  • Choose the correct box size.
  • Don’t hesitate to put an extra layer of bubble wrap or double-lined boxes on fragile items. 
  • Use dunnage to fill any remaining space between the product and the box.
  • If the product is fragile, affix a “Fragile” shipping label on the box.

Even after taking all these precautionary measures, if your product arrives broken or damaged, you can be certain that your courier service provider is doing something wrong. Then you might start looking for a better delivery provider.

Bottom Line

Although some returns are inevitable due to the remote nature of eCommerce, there are some returns that can be prevented.  Focus on the above-mentioned best practices to reduce returns and protect your profit margins.

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