With consumers confined at home and non-essential retailers closed during the lockdown, eCommerce has seen a significant surge in demand. Retail Sector reports that the UK economy is expected to
add £5.3bn thanks to the growth of eCommerce sales. While numerous businesses selling online have witnessed a sudden spike, eCommerce experts advise that return rates are set to increase accordingly. On average, 25% of all online purchases are returned while 30% of shoppers deliberately over-purchase and then return unwanted items.
In response, businesses need additional processes to handle returns, refunds and chargebacks. For some sectors like travel, the volatile market conditions are putting businesses under even greater pressure especially when the service gets cancelled due to the pandemic.
Managing returns, refunds and
chargebacks is the cornerstone of sustainable profitability and can help you cut through the noise in an increasingly competitive global eCommerce landscape. To help you navigate more easily, we’ve put together a list of key actions that can help you prevent returns or refunds and tackle chargebacks as efficiently as possible if they occur.
Make your return policy clear pre-purchase
Communicating your return policy before a browser becomes a customer can help manage expectations post-purchase. Managing returns efficiently may not only help increase customer satisfaction but enhance your profitability in conjunction with a reverse logistics infrastructure.
Ensure product descriptions are accurate
Prevention is better than cure and detailed product descriptions can go a long way – and potentially save merchants resources and money from returns. Giving a reliable and in-depth description of your products with high-quality videos and images can drive favourable purchasing decisions. Throwing reviews into the mix is another way to deliver transparency that customers will love;
71% of consumers read product reviews before making a purchase.
Flexible return time windows
Return windows are important to consumers and may not necessarily pave the way to more returns and more hassle for you. Research suggests that while customers expect at least 30 days to return an online purchase,
only 5% of online shoppers return online orders more than 30 days after the transaction. Lenient return timeframes could make customers feel more at ease and not rush into returning the products.
Consider offering free returns
Returns may add an operational issue for merchants, but businesses with an established presence and customer base could benefit from offering free returns. Free returns are the
second reason why consumers are more likely to spend online. Merchants can leverage the trend by setting a minimum amount for free returns if too costly to implement across all purchases.
Identify trends among returned items and customers
Adding a short survey in the return process can help you identify issues with your product, from its quality to
shipping and delivery. At the same time, diving into your data can highlight behavioural patterns among your customers. Investing in a CRM system will enable you to automatically track your customers using various parameters which can be leveraged to pinpoint serial returners and exclude them from value-added services like free returns when relevant.
Ensure your return and refund terms are prominent
It’s the merchant’s responsibility to disclose the return and refund terms before the customer completes their purchase. Consider displaying a checkbox acknowledging that the customer has read the refund and return policy above the payment button.
Be transparent about your refund policy
When it comes to refunds, you must state your process explicitly and in everyday language to avoid confusion. Setting expectations for how quickly the funds will reach the customer’s account is key to avoid complaints or, even worse, disputes. If possible, explain why a customer may see a delay in receiving the refund. Even if the funds are transferred earlier in their account, in that case, it’s better to go above and beyond the customer’s expectation.
Tackling chargebacks
Chargebacks are a mechanism set by the card schemes to ensure that the card payment ecosystem works smoothly and safely for businesses and customers alike. Merchants should be prepared that chargebacks may arise as their sales grow. emerchantpay payment specialists work closely with merchants to provide clear guidance on how to proactively prevent chargebacks as much as possible, and ultimately defend chargeback claims with a straightforward, streamlined process.
A final word
As consumers are adapting to a new digital reality, eCommerce growth shows no signs of slowing down. Returns and refunds are a part of the equation that should not be overlooked. Striking the right balance between transparent refund terms and trying to deter consumers from returning purchases is vital so that you can continue to grow within an ever-competing ecosystem.
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