Running a successful online business is all about improving the bottom line. Every decision, whether it is marketing campaigns, SEO, optimizing website conversion, or driving repeat purchases with a loyalty program, is about driving more sales to more people or increasing the average spending per shopper
The brutal truth about running an online business is that margins are generally quite thin. The average net profit margin for many stores is only around 10%. Think about that – that is only a $10 profit for every $100 sale.
So you can continue to drive more sales to make more money overall, but there’s something else many people overlook – returns. The issue of returns can contribute to a non-trivial amount to the profit margin. Especially for selling online, when people don’t have a chance to physically try on the clothing to get accurate sizing or feel the material of the product in person. Every online return costs you money and time, and all of that eat into your bottom line.
Therefore, when running an e-commerce business, it is important to understand not only what customers like, but also the reasons why consumers return products. We know that everyone returns for a different reason and different industries have their own standards, yet no matter what category your products fall in, it’s always better to actively track the reasons for returns, find the patterns from which they occur, and then make improvements to address the problems.
Top 5 Reasons Why Customers Return A Purchase
In this article, Kiwi Sizing will share with you the top 5 reasons why customers return a purchase and how to avoid such problems to help stores sell your products more successfully and, at the same time, reduce operating costs to achieve the ultimate goal of significant business growth.
1 – The product doesn’t fit correctly or isn’t true to the product description
The most common reason for return is upon arrival, the product is not what the customer expected when making that purchase online. It could be that the color or material isn’t accurate based on the photos.
In the case of stores that sell apparel, the vast majority of problems come from incorrect sizes of merchandise, resulting in the need to return the item upon delivery, which is a problem that could be measured and systematically improved.
The most important things you need to do is to ensure that all product information and images are correct, clear, and complete and that the full-size information is displayed on the product page so that the consumer knows what they are buying and what size fits, thus reducing the risk of returns.
In one of our previous articles, we mentioned that “sizing is a problem for online shopping” and more importantly, sizing is the number one return issue. Sometimes you fit in a small from store A and have to wear a large from store B, right?
According to RetailDive, “Over 50% of online purchases are returned, mostly due to sizing issues. Because of unreliable sizing systems, practices like bracketing – purchasing multiple sizes of the same item online and returning the ones that don’t fit – are trending and contributing to huge losses for online retailers.”
So here’s the tip:
With Kiwi Sizing, you can quickly create a size chart with unit conversions so that consumers can use their most customary units to select the right size for their products when shopping online!
If you sell a wide range of sizes for various body types, such as bust, waist, torso, and hip, you can use Kiwi Sizing’s Size Recommender to optimize the consumer’s shopping experience.
Potential customers only need to input their heights and weights, the Size Recommender will suggest to them the most suitable size. Reducing returns starts with providing the correct size, allowing consumers to buy the “best size” and significantly reducing return costs!
2 – Shipping the wrong item
Shipping the wrong item is a very common and easily occurring mistake, even for companies with warehouse management services such as Amazon.
For example, if the warehouse receives an order for item A and then sends item B during the packing and shipping process, you can imagine that when the consumer receives the package, the first thing they want to do is return it for the original one they purchased.
When a customer approaches you with the request of receiving the wrong product, there are different ways to handle the situation depending on the country’s regulations.
According to the U.S. Federal Trade Commission, if you send a consumer an item that he or she never purchased, he or she has the right to keep the item even if you refund him or her, and the best way to reduce return costs is to simply send the item that the consumer originally purchased.
We recommend to track this type of errors and see if it is a recurring pattern and if so, it will be time to reconsider what is going on with your fulfillment process and perhaps should consider re-training the in-house staffs or discuss with fulfillment vendors.
3 – Damaged or defective goods
Sometimes there are inadvertent bumps in shipping, and even if you send a perfectly packaged item, it may be damaged as a result. If your item is fragile, be sure to re-evaluate your packing procedures or use better protection for your item.
Defective goods are another matter. If you receive too many of these returns, be sure to check your inventory supplier and eliminate defective goods that are too different from the real thing! The storage method is also one of your considerations, because temperature, humidity, and other environmental problems may cause damage to the goods.
It is recommended that you check the quality of each incoming shipment in batches when you send them to avoid having to bear more return costs due to defects.
4 – The shipping takes too long and the consumer no longer needs the product
The definition of “late arrival” varies greatly from person to person. Imagine a customer orders a dress online for attending a formal dinner, but does not receive it until the dinner. He/she might want to return the item when it is no longer needed on some level.
The best way to reduce these types of returns is first to give accurate delivery estimates during check-out and provide real-time delivery updates and provide tracking codes so that consumers know exactly when they will receive their merchandise. It is often better to under promise on shipping time and deliver earlier than their expectation!
And this goes without saying – you need to process orders in a timely manner after they are placed to ensure that those goods are shipped on time.
5 – “Wardrobing”
Wardrobing is a form of consumer fraud in which a person may plan to attend an important event in the future, buy a garment in advance, dress up for the event without removing the price tag, and return it after the event for any reason.
Of course, it’s not just clothing. Electrical goods, furniture, or any categories you can think of, could be used and returned to serve this type of consumer’s self-interest.
The most proactive way to protect against this kind of fraud is to require consumers to record the process of unboxing after receiving it to ensure that the content and specifications are correct, or to make the label in an unobstructed location so that the consumer must remove it to wear the clothing in public.
Note on Return Policies in Ecommerce
Lastly, a few words on the return policy – in today’s day and age, offering a generous return policy is almost a requirement to even be selling online. That’s what everyone is offering these days.
Therefore, it is really difficult to say “no return” to a customer who is simply saying that he/she is not satisfied. So it’s important to have a specific and strict return policy on return period, terms, or requirements, and tracking serial returners can help you leave as many frauds out as possible.
And most importantly, track your returns and analyze the reasons every once in a while to see if the refund policy should be updated or if there are recurring issues that can be addressed in your supply chain.
Reduce your store return rates starting today
There are hundreds of reasons for returns, and this article only shares a few of the most common reasons why customers return products. We hope that this article will help you understand more about the issue of returns, and to reduce the return rate and unnecessary expenses through specific improvements for different return problems!
If your consumers often ask for returns because of size issues, get Kiwi Sizing today to have a Size Chart and Size Recommender to make it easy for consumers to choose their perfect size and for your brands to reduce return costs!
To reduce the return rate after a successful sale, we also recommend that you can create a size chart with unit conversion to make your customers pick the unit they are most comfortable thinking in to make a purchase decision.
Or use Kiwi Sizing AI Size Recommender as a size chart tool. It will recommend the most suitable size of products for customers to reduce the return rate, help you decrease the cost of the return, and to create a positive cycle for your e-commerce business.
