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How to Manage Returns in E-commerce

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Sarah Koehn

How to Manage Returns in E-commerce

Are you ready for a tip that can significantly affect your business's bottom line? Optimize return management. 

The baseline percentage for returns is 20-30%. This can increase, however, in some categories to as much as 50%. This means two or three out of every ten orders will be returned. If you sell clothing, or other items with a high return rate, it could even be as much as one out of every two orders.

If you don’t have a good return strategy, returns are likely eating away at your bottom line. How can you improve this process?

Have a Generous Return Policy

It may seem counterintuitive, but your return policy can make or break a sale. 60% of consumers admit that they check the return policy before making a purchase. Your return policy can drive customer loyalty, reduce returns, and boost sales!

A well-crafted return policy gives your customers peace of mind and distinguishes you from your competitors. By clearly outlining your process for returns and exchanges, you encourage customers to hit “buy now.” Here are a few of the benefits.

Customer satisfaction: A hassle-free return experience shows that you value your customers' needs and are committed to their satisfaction. This builds trust and keeps them coming back for more.

Reduced returns: A clear and easy-to-understand return policy helps minimize unnecessary returns by setting realistic expectations from the start. Say goodbye to time wasted on discussing your return policy!

Increased sales: An attractive return policy has the power to convert hesitant shoppers into confident buyers. By removing the fear of getting stuck with an unwanted item, you create a more enticing shopping experience that boosts conversions.

By boosting sales you will compensate for the ever-present expense of return management. You will convert return from a profit drain into an asset.

Returns as an Amazon Seller

These tips apply to selling on your own platform, where you can establish the return policy. If, however, you sell on Amazon returns will have to be managed differently. Whether you sell FBA (fulfilled by Amazon) or FBM (fulfilled by merchant) your return policy is established by Amazon.

I’m sure you’ve experienced Amazon’s flexible, customer-centric policies. It makes purchasing so much easier when you can change your mind for an almost instantaneous refund. And let’s be honest—most of us have taken advantage of that service!

However, these policies, which please customers, penalize sellers. Amazon’s no questions asked return policy ensures customer satisfaction while eating into the profits of sellers.

As an FBA seller, Amazon determines whether each return received is sellable or unsellable. This decision is made based on a brief visual inspection and the customer’s return reason. Sellable items will be restocked. Unsellable items will either be disposed of or held until you request a removal. 

Though there are fees associated with a removal order (as there are with returns, disposal, and storage) this option gives you the most control over your returns. 

The opportunity to inspect each return yourself can prevent unnecessary product loss and mitigate return cost. Many items deemed unsellable have been marked as defective by the buyer, but are still functional. In other cases, an item may have been removed from packaging, but is also still functional. In both cases, electing disposal would waste products which could be resold. 

Instead of relying on Amazon, you can actively participate in deciding how returns are processed and ensure that it aligns with your business goals and customer service standards.

Outsourcing Returns

You should expect returns for 20-30% of your orders. In addition to all the other tasks that keep a business running successfully, managing returns can become overwhelming. 

Outsourcing returns can benefit your business greatly. It can free up time to focus on other, more important tasks, while improving your efficiency. 

At Viable Shipping, we understand the importance of transparency and simplicity. That's why we offer a straightforward pricing model. No hidden costs, no extra charges for restocking or disposal. Just one low cost fee per unit. 

We put the power back in your hands, allowing you to make decisions that benefit your business. Say goodbye to expensive return fees and the hassle of dealing with Amazon. It's time to save money, streamline your processes, and focus on what you do best – growing your business.