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Returns policies are a key battleground among online retailers for customer loyalty, since customer satisfaction is one of the most important metrics in business.

Yet a recent study by Snow Valley found that many UK web firms provide unclear or hard to find instructions for consumers that want to return purchased products.

Is there any benefit to this approach, when we know that highly visible policies can engender trust, helping to boost conversion rates?

After the jump, let's look at seven ways of improving your returns policy / strategy...

  • A hassle-free returns policy
    Customer experience is vital here. It is not worth haggling over returns and losing repeat business. If a customer can see that you have a clear, no-hassle policy, they will be much more likely to buy from your site.

    Amazon is a good example of this. It will return goods bought in the last 30 days whatever the reason, as well as picking up the postage costs.

    Also, if you have such a policy, make this clear on your site and product pages. This could mean more sales.

  • Pay the postage costs
    As with the previous point, making it as easy as possible for customers will mean they will shop again with you, even if the particular product they bought is not suitable.

    Another method is to actually pick the goods back up from the customer's house, something which Argos does.

  • Let customers return the good to a retail outlet
    If you are a multi-channel retailer, then it makes perfect sense to give customers the choice of posting the goods back, or taking them to their local store.

    A survey last year found that 57% of  US shoppers wanted the ability to return or exchange products in-store, regardless of whether they had bought them from a website, catalogue or shop.

  • Display the returns policy clearly
    This is a dealbreaker for many online shoppers. If they are unsure about how an item will look when they get it home, not sure if it will fit, and so on, then the knowledge that they can easily return the item could clinch the sale.

    Ideally, customers should be able to find your returns policy from a link on the homepage, and the policy should be shown, or easily accessible from the product pages.

  • Include returns instructions in packages
    By including details of the return policy in the goods sent out, then customer will not have to search the website, or phone customer services to find out what to do.
  • Keep customers informed
    As with deliveries, confirm to the customer when their returned item has been received, and when a replacement will be sent out, or the refund paid. This will save customers the hassle of contacting you about the issue, and they will appreciate the information.
  • Send them two sizes, and one postage-paid returns envelope!
    We know of one highly savvy apparel retailer that sends out not one, but two products, every time a purchase is made. The consumer is instructed to choose and keep the best fit, and to send back the other size in a pre-paid envelope (or box). The rationale is that while there is a margin trade-off for processing these 'returns', it is better to win new customers this way, especially if you can keep them coming back for more.

Agree? Disagree? What have we missed? How big a problem are returns in the world of online retail? Please leave your comments below...

Related research
Online Customer Service Solutions 2007

Related stories
Returning online purchases is too much hassle - survey
10 tips on improving online customer service

Graham Charlton

Published 11 February, 2008 by Graham Charlton

Graham Charlton is the former Editor-in-Chief at Econsultancy. Follow him on Twitter or connect via Linkedin or Google+

2565 more posts from this author

Comments (6)

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Sarah Clelland

Actually, Amazon is not quite as generous as that - it depends on how long the customer has had the goods and whether they're faulty or not as to whether they'll pay original postage and cost of return - but they do manage it well, it must be said.

When we researched our Returns Report, we noted 3 types of retailer. Type 1 are the ones that don't enclose returns instructions with the order and generally make life really difficult for the customer. Electronics retailers were particularly bad.

Type 2 is the Amazon type - they don't overtly highlight returns but when the customer puts the wheels in motion it's very well organised.

Type 3 retailers actively promote their returns policy. Clothing retailers tend to lead the way - Figleaves promotes hassle-free returns and Boden actually uses postage-paid returns labels in their marketing.

And thanks for the mention of our report - it's here if anyone wants a read of it: www.snowvalley.com/report

over 8 years ago

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mike ashworth

Insightful list.

I purchased a xmas present for someone from play.com

Having to purchase it early in December meant that when it was found to be faulty and I had the item back in my hands I was then outside their 30 day policy for returns, nowhere did it state that it was anything other than 30 days. So I wrote an email complaining.

They replied saying they have an exceptions policy over xmas, to allow for this sort of thing. Why didn't they publish that on the site?

Once cant help but wonder if the reason many online retailers dont go the extra mile is because they know that none of their competitors are either. Therefore they don't worry about customer churn as sooner or later they'll come back for a cheap price, as the retailer externalised as many costs as possible, 0870 numbers or no number, just email. perhaps they even chose a "cheap" courier service with few depots around the country for customer pick-ups.

Mike Ashworth
Business Coaching and Consultancy
Brighton and Hove, Sussex, UK

over 8 years ago

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LoveHoney

LoveHoney started offering free returns and a 365-day return policy for faulty items in November.

We want our shop to deliver the kind of service that we'd like to get when we go shopping online...

http://www.lovehoney.co.uk/help/why-shop-here/

We have lots of price competition in our market so it'll be interesting to see what customers value the most in the long run,

BTW - why did you buy that Christmas present from Play.com? Were you primarily after a low, low (VAT-free) price? Or were you scouring the Web for a company that offered good service albeit at a higher price?

Richard
LoveHoney

over 8 years ago

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tevfik bülent öngün

i agree on all topics except the last one "Send them two sizes, and one postage-paid returns envelope!".

it does not sound like a realistic model if you play big on online retail.

tevfik bülent öngün
www.mudo.com.tr
online sales manager
Istanbul/Turkey

over 8 years ago

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Los Angeles Courier Service

I was wondering because someone is purchasing something from me and they told me they are going to issue paymet via courier service. I think its the same as postal service, but I'm not quite sure. So, if anybody knows, please tell me. Thanks in advance!

about 7 years ago

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OnlineAlisveris

it does not sound like a realistic model if you play big on online retail

almost 4 years ago

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