Owing to the coronavirus pandemic during 2020-21, online shopping has boomed globally. According to a study, the global online shopping market had nearly hit 4 trillion in 2020, and in the US alone, there are expected to be around 300 million online shoppers in 2023. As an eCommerce business owner, these numbers are pretty exciting, but with a large number of online shoppers come the infamous ‘product returns.’ Just like every other aspect of eCommerce, product returns are also expected to hit new records after this holiday season. International Returns Day, observed on January 2nd, recognizes the high volume of returns that crop up following retail’s year-end sales boom. 

Returns are a major problem for eCommerce businesses. Returns can have a major impact on the business’s bottom-line since the profit margins for these businesses are already stretched thin. Let us take a look at how eCommerce returns impact the bottom line of businesses and how we can fix it. 

 

Increase in Costs

Returns can be a major headache for retailers. With returns, comes the cost of processing returns in terms of resources and staff. According to a study by salecycle.com, 57% of retailers said that dealing with returns has a negative impact on the day-to-day running of their business. A returns process consists of multiple aspects including receiving the returned item, checking it for defects in the warehouse, issuing refunds, arranging for shipping if the customer wants an exchange, and so on. All of this increases labor and overhead costs for the retailers, ultimately impacting profit margins. 

Item cannot be Resold 

In many instances, problem with product delivery account for returns with items having to be returned by the customer after being damaged or broken in transit. This leaves the seller with no other option than to discard the item and bear the loss, directly impacting the business’s bottom-line.  

Let us now go through a few measures you can adopt as an eCommerce business owner that can yield good results for your business in the end- 

how to reduce impact of ecommerce returns on bottomline

Prevent Returns with a Returns Reduction Software 

 

Prevent returns from happening in the first place with intelligent returns reduction software. You can take multiple steps to prevent returns such as analyze returns data to understand why customers are returning, assess risky orders, encourage customers to retain the product in return for store credits, and so on. EcoReturns by Saara is an intelligent returns reduction and automation solution using AI to improve the bottom line of your business. You can access key returns data to dive deeper into issues related to products so that you improve them in the future.  

Provide Exceptional Customer Service 

Provide easy access touchpoints for customers to reach out with a product question or issue. The recommended way to provide fast, easy handling of return inquiries is to implement a customer returns portal. A customer returns portal like the one within EcoReturns allows customers to select return reasons and upload photos along with their requests. This prevents them from getting frustrated and returning the product because they don’t know how it works or thinks it’s broken. Alongside the traditional methods of phone and email, consider introducing live chat or instant messaging. This provides an instant link between the customer and your business, preventing those unnecessary returns and protecting your bottom line.

 

Tweak your Holiday Return Policies 

The way you handle returns affects your sales levels. More than 75% of shoppers check the return policy before making a purchase and a clear and flexible return policy can have a direct impact on purchase decisions.  

For the holidays, your return policy should also consider that many of the purchases are bought as gifts, and the items will likely not be in the hands of their “final owner” until Christmas. Therefore, an extended returns policy (beyond the typical 30-days) is in order for purchases that indicate “this is a gift” at checkout so that the person who gets the gift has a fair chance of returning or exchanging an item that they did not like. The significance of this policy lies in the fact that these gift receivers were not the original buyer, so you have an opportunity to acquire a new customer through your returns process. 

 

Improve your Product Packaging 

Nearly 20% of customers cited ‘item damaged/broken’ as the major return reason. Prioritizing your packaging can actually solve this issue and prevent returns. Follow the general rule of thumb of envisioning the journey your item will take and decide your packaging accordingly.  

Improved packaging from your end will also help you in understanding the reason behind the items that are still arriving broken or damaged. In such cases, the problem is more likely to be with your logistics partner and not with the packaging. This will enable you to evaluate the way your courier partner is performing and if there’s a trend of increasing returns from the same courier, it’s time to find a new one!

 

Returns Automation 

There can be times when you have taken all necessary precautions to prevent returns but you still received returns under your roof. This is where you need to automate the process of receiving return and the grading process. Employees working in the fulfillment center spend considerable time in returned products handling. On return, a thorough quality inspection is performed on every product as part of the grading process where each of them is checked for any defects. 

Accuracy is a major challenge in the grading process, as it is performed manually making it prone to human error and increasing products handling cost directly impacting the bottom-line. Saara’s AI-powered returns automation technology helps reduce returns handling cost by over 50% with its AI-powered automated workflows and product quality inspection.