Practical Ecommerce

3 Tips for Holiday Returns and Exchanges

When the giddy days of holiday sales end, online retailers frequently need to deal with the inevitable returns and exchanges barrage. But when customer contacts are seen as opportunities, even returns can be a tool to improve an ecommerce business.

Online returns and exchanges are a point of concern for shoppers. The customer frequently has to wait for an item to ship back to the merchant, be processed, and then wait for a new item to be shipped out. Or the customer has to wait as much as a week for a refund to make its way from the merchant, through a payment process, and back to the customer’s bank or payment account. In either case it can be a hassle.

Likewise, some online merchants see returns and exchanges as challenges, since frequently the merchant pays for shipping both ways and may or may not be able to restock the item or return it to the manufacturer.

As a result of these concerns, returns and exchanges can make both the shopper and the seller unhappy. This is unfortunate, since any sort of customer contact is a chance to build a lasting relationship and make more sales.

Online retailers should think about exchanges or returns the same way they think about advertising. How much would an online retailer pay for an opportunity to interact with a customer? How about a qualified customer known to have an interest in the product the merchant sells? Retailers spend money all of the time to have a customer interaction — even one that does not end in an immediate sale. Hence, return requests or exchanges should not be seen so much as an operations expense, but rather another way to engage customers.

With a more positive view of returns and exchanges, there are at least three ways that both merchant and shopper may benefit. These return and exchange tips include (a) an opportunity to impress shoppers and earn long-term business, (b) the chance to make additional sales immediately, and (c) the opportunity to improve both store purchasing and marketing.

1. Treat Returns and Exchanges Like an Opportunity to Impress

Customers may see the need to return or exchange an item as a service failure. To a merchant, this concept — that the need to return something is a service failure — might seem odd. After all, the shopper chose the size, color, and product. So how could it be the merchant’s fault?

Nonetheless from a customer’s perspective, the sale did not go the way it should have. Either the product was not pictured and described well or it was not standard in its size or fit. And this is actually an opportunity to impress.

A customer that has a problem with an order necessitating an exchange or return will be more likely to purchase from that same merchant in the future, if that return is handled well. Put simply, when the merchant does a good job managing a return, a customer learns that working with this store is easy, even when things go wrong. The customer trusts the merchant to solve any future problems, and should be more likely to purchase again.

2. Use Returns and Exchanges to Make Additional Sales

Anytime a merchant has an opportunity to interact with a customer, there is an opportunity to make an additional sale.

As an example, a multi-channel seller in the northwestern U.S. recently began giving customers who requested an exchange an opportunity to add other items to the exchange shipment at a 10-percent discount and with free shipping.

Imagine the customer calls in and requests the exchange. The store representative takes down the contact information and then says, “Great, as usual, the shipping for your exchange is free. Is there anything else that you want me to put in the box? The free shipping would apply to that item too, plus, I can give you 10 percent off of anything on the site, right now.”

3. Let Returns and Exchanges Improve Marketing, Product Selection

Information gathered from customers who are requesting exchanges or returns may also be used to improve store operations.

Merchants should track all returns, looking for the most frequently exchanged or returned items. Looking at each of these items, the seller should look at product photography, product descriptions, advertising and promotional copy. Is the item being described properly? Similarly, look at the manufacturing quality and packaging. Is the item something that the merchant should continue to stock?

Armando Roggio
Armando Roggio
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Comments ( 3 )

  1. Shiran November 29, 2012 Reply

    Thanks Armando, I really loved what you wrote. more then once i have noticed that customers that returned items, bought from us again (most of the time when we processed their returns quickly), Now i have some ideas how i can actually use returns and exchanges as part our marketing (the 10% off idea is really great).

    Shiran

    P.S: I sent the article to my customer service workers…

  2. Marcy Adam Rice December 5, 2012 Reply

    Goodness, returning or exchanging an item can sometimes be the most frustrating thing for both the person behind and in front of the counter. But I do agree that such an interaction doesn’t necessarily have to be negative. Actually, you could think of it as more opportunity to sell and promote. You can never get enough holiday interactions! Here’s something on the topic. http://www.sbtelegram.com/2012/11/30/how-to-get-more-customer-interaction-this-holiday-season/

  3. Carlos Rivera December 29, 2012 Reply

    It goes both ways…customers do know how to take advantage of a merchant if you give them the opportunity.

    In my business, I treat each return/exchange on a case-by-case basis.

    Say, for example, that you offer free shipping on a heavy product. The customer wants to exchange it, so you offer to pay for return shipping, and then free shipping back to the customer? That makes no sense.

    Retaining a customer, yes. But not at the detriment to your business.

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