Legal aspects, conditions, control and management.
Returns are still one of the biggest barriers to online sales in eCommerce, since users can’t touch or try the product. Customers increasingly analyze and value the option and ease of returning a product when they buy. That’s why at TLG Commerce we always advise communicating the online store’s return conditions or policy clearly and directly.
The study carried out in 2016 and recently published by Cetelem (Observatorio eCommerce) highlights the “difficulty of making returns” as one of the main problems or downsides of shopping online.
Here we need to distinguish between two concepts with the same consequence but different causes:
- Returns of damaged or faulty products
In this case, understandably, the user is fully entitled to return the product and request an exchange or a refund at no cost. - Returns for other reasons
This includes withdrawing from the purchase, the customer not liking the product, etc.
I’ll go into more detail on this below.
I make this distinction because in recent years there has been a major shift in reverse logistics, from occasional returns of defective or damaged products to returns being a normal stage of the purchase process. Obviously, this shift increases logistics costs.
Bear in mind that, regardless of the sales conditions each company sets, there are legal aspects that must be included in the return policy.
- Legal deadline for returning the product
The law requires offering customers the option to return the product within at least 14 days of delivery. Companies may extend this period but never shorten it. Also, if an order with several products is delivered on different dates, the 14 days start counting from the delivery date of the last product. - Information
As I mentioned earlier, it’s essential to always clearly and directly communicate the conditions and return policy for purchased products. This gives customers credibility, transparency and trust.
Legally, if the company has never provided information on return conditions, it will be penalized, and the 14-day legal period will become 12 months. - Reason
Even if the seller asks the customer for the reason for the return, the customer isn’t obliged to give one. Nor can they be penalized for exercising their right of return within the set period. - Amount paid
When a user expressly requests the return of a product or order within the stipulated period, they are entitled to a refund of the full purchase amount, including the original shipping costs. - Costs of returning the product
Return shipping costs may be charged to the buyer, but bear in mind that for the return to be accepted, the product must be in perfect condition and the customer must have proof of purchase.
Some companies improve their return conditions, extending periods up to 360 days with no charges. These are important points to consider, but without neglecting the business side, since in many cases the wrong policy can cost us margin or even lead to losses.
Users are increasingly used to interacting with different sales channels and value the option to buy online and pick up in store, as well as to return or exchange the product at the physical store.
In these cases, return costs are usually not charged and customers can try the product. Stores can also push cross-selling of complementary or higher-quality products, increasing the average basket value.
Beyond defining a return policy that complies with the law and offers guarantees to users, it’s very important to constantly measure the return rate of orders and/or products so you can improve related aspects and, consequently, optimize and reduce it.
Factors to consider to reduce an eCommerce’s return rate:
- Product images and videos
Use excellent image quality that shows product details, textures and colors, and add 360º images and explainer videos. Bear in mind that the product image must be as true to life as possible so it matches the product the customer finally receives. - Size guide
Create a size guide with measurements and details that give users extra information to know which size best fits their needs.
This is very important for fashion websites, whether own-brand or multi-brand. - Product descriptions
Write a detailed description on the product page with composition, features, functionality, etc. The more quality information you give users the better, not only to help them decide but also to avoid returns due to missing or wrong information. - Stock
Try to avoid physical returns caused by a product in an order being out of stock. This creates a significant administrative workload and a poor image with the customer. That’s why real-time stock control is important and, in special cases, working with “safety” stock to avoid selling products we don’t have. - Customer service and support
Offer customers direct, easy contact to clear up any questions about the product (phone, chat, email).
This way you can resolve questions up front and avoid future returns. - Customer reviews and ratings
Customer comments, ratings and reviews can help clear up doubts honestly and clearly before purchase. - Check orders
Reviewing orders is often skipped, yet it can help reduce the return rate and improve our image as a company.
For certain products, a combination may flag an inconsistency that lets us head off a problem and a possible return.
Finally, I’ll cover the implications for eCommerce management and administration, since return requests involve an internal process that needs coordinating.
When a customer requests a return, it triggers a series of actions that must be managed in a coordinated way.
In the online store, we can let users manage the return themselves from their account area. They can do this without calling or emailing, or we can limit it to email only. eCommerce managers often think that making returns easier will make them grow. But they overlook that, in return, the conversion rate may grow even more and work in their favor.
Internal returns process:
- Receipt of the return request, either by email or automatically through the eCommerce.
- Request review and validation
Check whether the product is within the return period, the reasons, etc. At this step it’s important to keep statistics on the reasons so you can improve and reduce the return rate. - Product shipping request
Depending on each store’s options, customers can drop it off in store, have it collected at home, or deliver it to a pickup point or logistics operator, etc.
Depending on the option chosen, you’ll proceed one way or another: coordinating reverse logistics, sharing or giving access to the information across all the company’s sales channels, and finally inspecting the product’s condition to definitively validate the return. - Managing order statuses in the eCommerce
Within our eCommerce’s order status structure, we should include at least two: return request and returned.
For each one, you can set up automatic actions such as email notifications to customers or to internal staff. - Stock update
Once we have the product back, if feasible, it’s important to put it on sale again. To do so, assign the stock to the right warehouse, whether a physical store, central, online or other, depending on the internal policy for stock allocated to online sales. - Refund of the amount paid
Once the returned product’s condition has been checked and validated, the purchase amount is refunded using the same method the customer paid with.
This process is usually manual (depending on the payment method), but we’ll soon add the option to the payment gateway so it can be automated.
To sum up, we recommend:
- Having a return policy that meets legal requirements and, if possible, improves on them with better conditions than your direct competitors.
- Making the process easy for both customer and company (speed and effectiveness).
- Offering several logistics and omnichannel options to make returns easier.
- Conveying trust, credibility and transparency.
- Recording, controlling, tracking and optimizing the eCommerce’s return rate.
- Managing the internal process and customer communication optimally, quickly and efficiently.
- Communicating and highlighting the benefits, bearing in mind that a good return policy will help increase the conversion rate.
What do you think? Do you have a good return policy in your online store? Would you like us to help you improve any aspect of it?
Image source: http://www.elle.mx/moda/2015/09/09/el-fenomeno-de-comprar-usar-y-devolver-la-ropa/
