16 August 2022
5 min read
FREE RETURNS: YES OR NO?
One of the biggest questions that eCommerces are currently asking themselves is whether or not they should charge returns, especially when considering the high growth and future forecast of online sales which could set up a make or breakpoint on their brand.
While having free returns would be the perfect approach from the customer’s point of view, it is remarkably important to check on how profits will be hit. The key is to find the proper balance between making customers happy while not losing sight of profits.
There are both positives and negatives to free returns, and here are a few.
From the customers perspective, free return shipping policies provide reassurance that they won’t get penalized for receiving a damaged product, or for discovering that the product doesn’t fit the imagery they saw online.
In addition, free returns are not only beneficial to customers, but also improve the company’s image. The vast majority of consumers prefer to support merchants with generous return policies since a seamless and easy returns process makes them much more likely to shop again with a brand in the future.
On the other hand, charging for returns is one of the easiest ways for retailers to combat fraud as paying for shipping makes the return process a lot less convenient for customers. However, when the customer sees impediments and difficulties in returning the product (considering paying as a difficulty) and, taking into account that 67% of consumers check the return policy before making a purchase, it is quite likely that the number of sales will be reduced for the simple fact of collecting returns.
Paying for return shipping adds a huge amount of friction to the returns experience, and, it is likely that, as an eCommerce, you’ll end up losing customers at some point. When a customer doubts about the size/color of the product and, in turn, the return policies are tedious, it is quite likely that the purchase will never be made.
For this reason, by offering free returns, although it is true that the probability of fraud increases, so will product sales.
In addition, it must be taken into account that free returns shipping isn’t something a business can easily trial for a limited time to see how it goes. Once implemented, customers will expect it to stay that way.
A recommendation could be to increase the cost of products to cover some of the shipping fees.
€50+ FREE shipping sounds much better than €50+ €7 shipping. That’s how value gets perceived by customers.
There are other alternatives such as charging only for shipping and avoiding charging the customer for the return, especially when talking about clothing items. This type of product is much more likely to be returned than any other for the simple fact that there are many factors that can contribute to this not being the right one (size, fit, color, among others). If customers see that they will not be penalized for returning the product, it is more likely that they will be very satisfied with the brand and, consequently, will make a purchase again.
It is important to consider all factors and make a balanced choice. A product that won’t destroy your bottom line, but also won’t drive away potential customers.
Just a reminder that 89% of customers would not buy again if they had a bad return experience.