Product suppliers and their customers often have one thing in common when it comes to returns: Both would prefer it if they didn’t happen. Customers don’t like having to return a product, and the supplier doesn’t like having to receive and process product returns. For the vendor, it can be a costly hassle to manage returned goods. Along with transport and handling costs there’s also customer service labour expenses and warehousing and storage costs. On top of that there’s the damage to the customer relationship if the return was made because the supplier failed to take adequate steps to avoid it.
Of course there are some circumstances where products are returned for reasons over which the supplier has no control. A customer may simply change their mind or may have discovered after they placed the order that they require fewer of the item than they originally thought. Of those situations where the vendor may have at least some responsibility for a product return, the most common ones are these:
- Customer ordered the wrong product, quantity or size
- Product did not match the online or catalogue description
- Customer decided that the product is no longer wanted or needed
- Product did not meet the customer’s expectations
- Supplier shipped the wrong product, size or quantity
Naturally to help keep your business running smoothly and profitably, you want to keep your return rates to a minimum. How can you best achieve that? Here are some tips:
Have a clear returns policy
A clear, well thought-out returns policy can save you from unnecessary headaches and lost revenue, while also providing the opportunity to highlight your customer service strengths.
Ideally your returns policy will be one that works well for both your business and for your customers. A restrictive policy that makes it unnecessarily difficult for customers to return merchandise and receive a refund or replacement will do nothing for your reputation or for the nurturing of lifetime loyalty, while an overly‑generous policy could prove to be a drain on your financial and operational resources. The key is to strike a balance between the two.
Keep in mind that it’s more costly to acquire a new customer than to resolve an issue with an existing one, so a returns policy that includes fair terms for the customer is likely to serve you best over the long haul.
In terms of what to include in your returns policy, that will mostly depend on the type of industry you’re in, the logistics of your business operations and the types of products you sell. At its most basic, your policy should state what goods can and cannot be returned and for what reasons. It should also indicate the time-frame the customer should expect the return to occur within, the processes that will be put in place to affect a return as well as any shipping and handling costs that will be incurred by the customer.
While setting out your policy you should also become aware of your legal obligations. If you are unsure as to what you legally can and cannot include in your returns policy, visit the Australian Competition & Consumer Commission (ACCC) website. There you will find what you need in order to understand both your and your customers’ rights when it comes to returns, refunds and exchanges.
Once you’ve decided on terms, your policy document should be written up in simple easy‑to‑understand language. If your policy is too vague and unclear, you have a greater chance of coming out the loser if a dispute results in a resolution imposed by a third-party adjudicator.
It’s very important that you make your policy easily visible to your customers before they buy (no fine print required, thank you). For a brick‑and‑mortar business, it should be displayed prominently on the premises. For online sales, your policy should be easily seen by customers on your website before they hit the checkout button. Hiding your returns policy in obscure places will sow the seeds of distrust and could come back to bite you when the customer makes the legitimate claim that they couldn’t find it. If you are not sure where to place your policy, a link at the footer of your web store will do the job nicely.
Educate your staff
Educating staff on their business’s returns policies and procedures is not an onerous task but it’s one that’s often overlooked. Be sure that your employees are aware of and can explain to a customer what your returns policy is and how your business manages returns.
Provide detailed product descriptions
Prior to deciding on a purchase, the customer needs to know whether the product is right for them. The more information the customer has on the product they’re considering, the less likely it is that it will fail to meet the customer’s expectations and be returned.
Descriptions need to be clear and precise on all relevant aspects of the product. Ideally the person writing the description will be very familiar with the product and will know what the customer needs to know to make an informed decision. As well as the various technical specifications (weight, dimensions, materials used, etc) the description should also explain what the purchaser should expect from the product – ie its benefits and uses – without exaggerating what the product is capable of. This will further reduce the chances that the customer will be disappointed with what they receive.
Use good photography
Without the benefit of being able to make physical contact with a product, an online customer can be at a disadvantage when making a purchasing decision. The extent to which this is the case depends on the types of products you sell. If your speciality is pet supplies, you probably won’t need to invest in the highest quality photographic equipment and techniques. However, if you’re in the business of selling clothing, furniture or jewellery … well, that’s a different matter.
Either way, the photographs you display (whether on a website or in print) should be appropriate for the product. If the product looks in real life just like it does in the photos, you’ll be less likely to see it returned. But it’s sometimes not enough to just have the product match the photo. What if a customer complains that, “the product doesn’t look unlike what it does in the photo, but the photo didn’t provide me with a complete view of how the product would look when I received it.” To give as complete a perspective of your product as possible, take a number of high-resolution shots from multiple angles and viewpoints. If possible, include a photo of the product being used.
It can also be worth your while to include zoom-able photo functionality. This will allow your customers to inspect up close those aspects of the product they’re most interested in. And while you’re at it, you may want to go the extra step and incorporate a rotating 360 degree viewing function.
Collect feedback from customers who return
The more information you have on why customers return merchandise, the better placed you’ll be to resolve return issues and make improvements to those areas of your business that are most responsible for whatever went wrong that led to a return.
For example, if a large percentage of the returns of a particular product are because there was a mismatch between what the customer received and what was described on the website, that points to an obvious problem that can probably be easily fixed with some amendments to the product description. And if a common reason for a return is that the product arrived too late to fulfil its original purpose, that could indicate a systemic bottleneck in the shipping process.
Whether you’re in the B2B or the B2C sector, product returns are an unavoidable reality of business life. Your ongoing objective should be to reduce returns to a bare minimum and, when returns do occur, to not have the experience ruin customer relationships or place unnecessary burdens on your business. If you need help figuring out how to deal with customer complaints, read this article.
If you have put the necessary time and effort into establishing a practicable returns policy and developing procedures to identify why returns occur and what needs to be done to address returns issues, you will be well‑positioned to achieve that goal.