How Should eCommerce Startups Deal With Returns?

eCommerce startups like Boxed and Verishop are setting the bar in customer expectations for quality services and products. However, the industry’s return monster continues to defy the norms of even the most innovative startups. In 2023 alone, the total value of eCommerce returns was over $231 billion. Failure to handle returns effectively can result in lost customers and revenue.

So, how should eCommerce startups deal with returns?

Strategies To Streamline Returns For eCommerce Startups

Customer-friendly returns policy

Did you know that 60% of customers consider a store’s return policy before purchasing? Yes, that’s a mind-boggling 60% of customers that need impressing. Studies have shown that a simple return process impacts conversion rates, with 27% of customers saying they’ll only purchase something if they can return it for free. You can additionally increase customer satisfaction by offering a longer return window, scheduling easy return pickups, and guiding customers on generating return labels. 

Amazon has a very high conversion rate because its customers know they can send back items if they feel dissatisfied. The whole return process is simple because customers don’t have to print anything except return the item to the post office with a simple QR code.

Outsource to 3PLs

Most startups need help processing returns because it is time-consuming and has many ongoing headaches to satisfy customers. The in-house return process could consume as much as 66% of an item’s sale price. So, even if a store can quickly resell the returned item, it is almost impossible to recoup such costs. Outsourcing returns to third-party logistics (3PL) service providers is an important, efficient and cost-effective return management technique.

3PL providers offer many benefits, such as:

• Laser-focused expertise on eCommerce returns management, allowing businesses to process customer returns quickly.
• An improved customer satisfaction, as they offer a better customer experience than the customers dealing directly with the business.
• eCommerce businesses can benefit from state-of-the-art technology platforms that enable easy tracking of returns and inventory, customer communication, and data analysis. 

Invest in SaaS-based solutions

Automating returns using SaaS-based software has become a common sight in eCommerce logistics. And the reason for this isn’t too hard to find. A UPS study revealed that only 53% of shoppers are satisfied with the ease of returning items from sites they shopped at. SaaS software goes a long way in reducing errors, minimizing grunt work, and improving operational efficiency. And the good news is that they also speed up your return process.

Listening to customers

A G2 research showed that online reviews influence the buying process of 97% of customers. This means that your customer’s feedback can increase your sales and help you identify pain points people might have with the product. 

After analyzing their reasons for returning products, make sure to improve because 95% of online customers said they would make a repeat purchase from a merchant who offers a good exchange/return experience. To encourage your customers to leave reviews, you can even offer them rewards, say 8% on their next purchase. 

Conclusion

eCommerce startups should do everything possible to reduce returns, streamline costs, and reduce costs and inventory levels. However, when returns occur (as they often do), managing them is important in scaling up the business. Failure to have a good return process can mean losing customer trust, impacting your sales.