The ecommerce market is increasingly competitive. Consumers have more choice than ever before, so one slip by retailers can result in customers defecting to a rival. Many factors influence a customer’s loyalty, but the returns
Managing the returns process requires careful handling Returns—not so free and easy
process is particularly important. It has been proven that implementing a good returns process drives repeat orders and improves customer satisfaction. Research by Harris Interactive shows that 85 percent of customers say they will stop buying from a retailer if the returns process is a hassle and, conversely, 95 percent will return to the same catalogue or internet retailer if the process is convenient. (For even more stats and insight into the online returns process, see Returns—not so free and easy, right.) Despite this, some ecommerce businesses fail to even
consider the returns process, with many leaving it to the customer to make his own arrangements to send items back. Some e-tailers, especially new ones, feel that because their business is small, a regimented returns process is unnecessary. Other companies put a system in place but fail to give it the attention it deserves, meaning that customers are put off by inefficient and inconvenient processes. In fact, in order to encourage customers to make repeat purchases and promote growth, the principle of offering a returns service is important to ecommerce businesses of all sizes.
Getting it right Undoubtedly, the returns process needs to be carefully thought
out. So how do companies ensure that their function will meet customer expectations at the same time as being workable for the business? There are three key considerations here. First, the system
needs to be easy to implement. This involves being scalable so that as the business grows the system can keep pace with increased traffic. Ideally, if the business is operating in different countries, the system will be rolled out under a single platform. This will not only create consistency for customers but will also reduce implementation costs. Secondly, whether dealing
with international or domestic mailing, it is important that the process is cost effective— whether the service is offered free-of-charge or at a cost. There can be import and duty
By Paul Galpin 10
Which costs did the retailer cover?
Return cost + original delivery charge Return cost only
Original delivery charge refund only Return cost + free delivery
None of the above costs covered Free delivery only Unable to return
Refund without return Waiting on refund TOTAL
2010 18 50 51 11 73 14 6 2 4
229 % 7.9
21.8 22.3 4.8
31.9 6.1 2.6 0.9 1.7
100
2009 % 2008% 2007% 14 39 9 3
10 28 7 2
54 9 9 0 0
137
39 7 7 0 0
100 8
30 7 6
40 0 9 0 0
100 4
33 13 4
45 0 1 0 0
100
Retailers are improving their customer returns processes, but at a slower pace than the initial delivery process, a new report has found. Of the 229 retailers tested for 2011 Snow Valley Online Returns &
Refunds Report, sponsored by MetaPack, less than half, 48 percent, gave customers the option of how they wanted to return the goods. Most retailers insisted on the customer using one of three methods: returning the parcel through the post, carrier pick-up, or to the store. What’s more, of the retailers that had stores, only 52 percent allowed for in-store return. However, in contrast to previous years, every store return was processed without hesitation by shop staff—evidently some improvements are being made in educating store staff about cross-channel returns. Nevertheless, Snow Valley still found that returning an item can
be an unnecessarily complicated procedure. It returned 183 items in the post and in 13 percent of cases had to email or call the retailer’s customer service department before doing so. Of the 22 carrier pick- ups arranged, seven involved the Snow Valley researchers emailing both the retailer and the carrier. Further, 22 percent of retailers failed to provide returns information with the order, forcing Snow Valley to call customer services or visit the website for instructions. Snow Valley also noted that six retailers either refused the return or refund, or made it too difficult for the customer to return the item. Once the item had been returned, half of the retailers sent no automated emails to acknowledge a return or refund. Some findings were more positive. The percentage of retailers refunding the original delivery charge rose from 17 percent in 2010 to 30 percent this year. Snow Valley believes this to be a result of heightened awareness of the Distance Selling Regulations following a report into the practices at retailer Next. Snow Valley suspects that the resulting negative publicity about the retailer’s flouting of the rules prompted other direct merchants to change their procedures during the past 12 months. And still, every silver lining has a cloud. As the refunding of the
delivery charge rose, the number of retailers covering the cost of returns declined. Only 35 percent of retailers sent prepaid postage labels or offered a paid carrier pick-up, compared to 40 percent in the previous year.
The report is available from
www.snowvalley.com/research. Catalogue e-business | Direct Commerce |
www.catalog-biz.com
Return to sender
source: 2011 Online Returns & Refunds Report
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