Processing refunds can intimidate new business owners who are tight on funds. However, experienced company executives will tell you: returns are a crucial part of any business. It can have devastating effects on profits, if not handled correctly. Otherwise, returns can be vital to a company’s survival and success.
To maintain profits while managing returns, companies need to implement proper business strategies. If done right, a positive return experience can drive sales by bringing back previous costumers. On the other hand, product descriptions and strong return policies can prevent returns from happening in the first place. These are the ways businesses can make the most of managing returns, to turn what once hurt profits into money-making strategy.
1. Have a Clear & Visible Return Policy
A good return policy is critical to any business. In fact, advertising it can guarantee product sales. A generous return policy gives shoppers peace of mind – customers know their money won’t be wasted, if they are unsatisfied with the product they receive. Because of this, website users are more likely to buy in the first place.
To boost sales, a company should include its return policy in various places within their site, such as on their home and product pages. These webpages have high visibility and traffic, ensuring that costumers view the policy, as they click and scroll through the site. In addition, return policies should be clear and concise, letting shoppers know exactly what they can expect of the return process. This should include what products are eligible for returns and if a full refund is provided.
Furthermore, a visible return policy can prevent chargebacks. Chargebacks occur when a customer claims to the bank that a purchase is fraudulent. These tend to be costlier than refunds due to penalties and fees incurred. There is little a merchant can do to fight against chargebacks. However, having a return policy at visible locations within the site help avoid the issue before it arises. Customers who view the return policy are more likely to go to the merchant directly for a refund, where pesky penalties can be avoided.
2. Describe Your Products & Their Benefits in Detail
Product descriptions are a useful tool to communicate with customers and encourage purchases. They are important in e-commerce businesses because merchants do not have the advantage of personal, face-to-face interactions.
Product descriptions can be placed strategically to minimize returns. By including these brief descriptions near the return policy or on product pages, make it easier for consumers to decide on their purchases. These product summaries should be specific to the item in question, detailing everything the product includes. Doing so will help set realistic expectations and, therefore, attract only the customers who will benefit from the items sold.
Additionally, benefits and rewards should be included to attract customers and prevent future returns. A costumer is less likely to seek out a return if the benefits associated with the item are of high interest.
3. Make Sure You’re Offering Something of Consumer Value
A good return policy is nothing if product value isn’t taken into consideration. Price is indicative of perceived product value, and as such, should match the costumer’s expectations to prevent future returns. For instance, shoppers may be satisfied with a low-quality item, if the product does not cost them much.
However, customers are much more likely to return a highly priced item if it does not meet their standard for quality. For this reason, businesses should evaluate the relationship between price, quality and value to determine the best strategy. Lowering the price of an item or improving its quality can help a business reach an equilibrium, and in turn lower return rates. Product descriptions, as previously mentioned, help to shape the expectations for product value and should match what is actually included.
4. Train Your Customer Service Team on Retention
Generous return policies and great customer service make buyers feel valued and, in turn, make them more likely to spend. It’s this influx in sales that helps mitigate the financial loss from returns. To practically apply this concept, businesses should avoid creating friction or hassles that can slow down the return process. This means making returns as easy, quick and convenient as possible. To do this, businesses should provide shoppers with easy-to-read instructions on how to process returns, where to go and/or who to contact.
In addition, customer service representatives should be trained to handle returns and refunds quickly and efficiently, while making sure to listen to the customer’s needs. In fact, customer service representatives should get ahead of the issue by quickly reaching out to shoppers when a refund is requested.
Company staff can answer questions regarding the product, provide clarity regarding its use, and ease customer concerns. If properly handled, customer service representatives can largely cut down on returns and maintain happy customers.