COVID-19 has effectively accelerated the shift to e-commerce of most retail stores by 5 years, boosting some businesses while nearly bankrupting others. Brick-and-mortar retailers specially had the years 2020 and 2021 as two of the toughest years in modern-day history due to lock downs and shelter-in place mandates.
Numerous indications are popping up that suggest a sharp increase in product returns after the pandemic. As more store operations reopen and begin expanding again, here are a few pointers to help you refocus your strategy especially around handling of customer-ecommerce-returns.
At the core, it’s an opportunity for businesses to re-examine how they’ve approached the handling of product returns before the pandemic, and what adjustments are necessary to re-calibrate plans for the post-pandemic road ahead.
Here they are:
1. Expect ecommerce returns to go up as the economy opens up. Retailers should anticipate and plan ahead for a rise in refund claims after COVID-19 pandemic.
At the beginning of the pandemic period, a shipping courier DHL observed a big decrease in average weekly return volumes, down by as much as 20%. With various lockdowns and a general avoidance of in-person or in-store returns during the height of the pandemic, many customers have delayed their plans to return their unwanted items, however things are improving very quickly. Make sure to have a solid ecommerce returns management system in place, for example: subscribe to RMAPORTAL’s leading ecommerce returns software.
2. Thoroughly review and update your Ecommerce Return Policy.
However, be extra careful when you update your Returns Policy especially if the reason for changing it is to address those late returns as affected by COVID-19 lockdowns. Make sure that you give your customers adequate notice before enforcing a new Returns Policy, otherwise it could land you in a lawsuit like what happened to L.L. Bean.
Back in February 2018, L.L. Bean Inc. changed its return policy to cover only the products that are returned within a year. This was a big change from their previous "lifetime no-questions-asked satisfaction guarantee". That old policy was one of the retail sector’s most generous returns policies.
This is the Facebook link that L.L.Bean Executive Chairman's Shawn O. Gorman posted for its customers, and this is their new and completed Return Policy to date.
Unsurprisingly, this change triggered a backlash as customers flock in droves to sue the company on a notion that L.L. Bean's new policy denied consumers a promised benefit of their purchase. Fortunately, they were able to uphold their New Return Policy in court.
3. Evaluate if it makes economic sense to process a return.
For inexpensive items it is often cheaper to refund the purchase price and let customers keep the products. Some items, especially large ones may also incur hefty shipping and warehousing or storage fees, in addition to more customer-service hours. So let your calculator decide which is the more money-saving decision. At all costs, try to shave the costs involved in processing your ecommerce returns.
A "Just Keep It" or offering full refund for ecommerce returns without having to send the purchased item back is a new practice that is being adopted by retailers during the pandemic, according to a Wall Street Journal report.
"Amid a post-holiday wave of returns of gifts and other items purchased online, retailers are telling some customers to keep the unwanted goods while still giving back their money." says MEGAN CERULLO from CBS News.
4. Re-evaluate the reasons why your customers return items.
According to Shopify, consumer preference-based returns (e.g., size, fit, style, etc.) tend to drive around 72% of all returns in fashion product categories. Non-preference-based reasons (e.g., defective) and “not as described” account for 10% in total.
- Size too small: 30%
- Size too large: 22%
- Changed my mind: 12%
- Style: 8%
- Not as described: 5%
- Defective: 5%
- Other or not specified: 18%
- Received wrong item: 23%
- Product received looks different: 22%
- Received damaged product: 20%
5. Expect even greater ecommerce returns and refunds during the holiday season.
This is because at least a quarter of holiday shoppers throughout December, January, and February buy items with the intention of returning them at a later date.
According to data from ShopifyPlus Majority of returns during these months:
- December: 3.23%
- January: 80.65%
- February onwards: 4.84%
- Unknown: 11.29%
No better time to automate your ecommerce returns management than today. Consider moving away from Excel-sheet driven returns tracking. Instead, subscribe to a software service that is specially designed to handle ecommerce product returns efficiently.
RMAPORTAL is a premier service used by small, medium and large businesses around the world for ecommerce returns management.