Returns are a part of any retailer’s business. But how to handle returns, from company-wide policies through finalized returns, is what can differentiate a retail brand for consumers. And, perhaps more importantly, continuing engagement with consumers after a return, to maintain a positive relationship and encourage future sales, should be an integral part of product return strategies.

Favorable Return Policies Have Led To Increased Returns And Evolved Shopping Habits

“As ecommerce retailers continue to provide more return-friendly policies, shoppers are buying and returning more online than ever before,” said Andrew Lipsman, Principal Analyst at eMarketer. Like free shipping, free returns are becoming more commonplace, and during the holidays many brands extend the amount of days allotted for returns. A record-breaking 1.9 million returns are expected to take place on January 2, 2020, up 26% year over year (YOY).

The ease of returning has increased the comfort some shoppers feel buying online or with certain retailers, and led to an evolution in online shopping called bracketing. Bracketing is when shoppers order multiples of something, usually in fashion or home goods, to see which looks or fits the best, and then return the rest. Shoppers are also returning purchases for the usual reasons, but the quality of their return experiences, ideally seamless, efficient and well-communicated, can make a significant difference in how shoppers perceive a given brand.

Brands Can Build Trust With Consumers By Having Clear Return Policies

Like other touchpoints along the retail journey, returns are an opportunity to tout brand strengths, get to know consumers better and encourage engagement. However, in order to grow relationships with consumers, brands must establish trust, which can inspire future brand loyalty. This initial trust should begin with a clear and concise website that includes accurate product descriptions and an easily found and understood return policy.

“It's [the customer journey] a nuance a lot of people don't pick up,” said Elain Szu, VP of Marketing at retail software company Narvar. “You need to think about the return process in terms of the full customer journey, not just when they’re at the point of return. To build that brand loyalty you need to zoom out and think about every touch point that you have with the customer, and that really starts during the consideration phase when the customer is on the product details page.” A wide-angle approach to the consumer experience can reduce confusion when it’s time to make a return — 28% of digital buyers consider a return “positive” if it’s hassle-free. 

Brands Should Engage With Consumers Throughout A Return

In the lead up to last year’s holiday season, 95% of surveyed consumers stated that how a retailer handles returns influences whether they will make future purchases from that retailer. In order to nurture consumers in the midst of returns, retail marketers should maintain proactive communication throughout the process. For example, Amazon, despite having some points of friction in their return process, has a higher rate of satisfaction from consumers because of proactive tracking and communications.

Narvar’s consumer report, The State of Online Returns, found 24% of consumers were satisfied with their return processes when they received status updates, and 34% were satisfied when they were told their returns had been processed. Ongoing conversations with brands are generally favorable to consumers and also provide opportunities for marketers to offer promotions and easy exchange opportunities or simply to make the consumer feel listened to and appreciated in a way that isn’t intrusive but encourages future business. This continuous engagement is particularly important with new customers, where churn after returns can be four times higher.

In-Store Returns Can Drive New Sales But Shouldn’t Stop Retail Marketers From Optimizing Online Returns

BOPIS or “buy online pay in store,” is one of the many ways brick-and-mortar stores and online are merging, and BORIS, or “buy online return in store,” is the flipside of that equation. Exchanges, in lieu of straight returns, are extremely important for retailers looking to mitigate the loss incurred from the millions of packages that start making their way back to stores after Christmas. And, BORIS is one way that retailers are encouraging exchange transactions.

38% of Americans think in-store returns are easier than returning online, although only 10% actually made in-store returns. Meaning, online is the preferred method to return something, but the online return process still feels intimidating or annoying — a consideration for brands trying to nurture loyalty through their return policies. Conversely, there are opportunities for stores with strong brick-and-mortar presences to turn in-store returns into exchanges or new purchases.

The previously mentioned Narvar study found that 22% of shoppers made unplanned purchases at stores they were returning to, 13% bought replacement items and 26% made exchanges. Overall though, BOPIS is down, with consumers favoring fast, easy returns that align with ecommerce purchasing, and increasingly, drop-off or third-party locations.

Although returns are not an enjoyable part of retail business, if handled properly they can be a point of positive engagement and communication with shoppers. Retailers should optimize their return policies from the very beginning to create healthy relationships with consumers that can be nurtured during and after the return process, hopefully facilitating future sales.

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