This translates to nearly 17 out of every 100 products sold being returned, a figure that can climb even higher during peak shopping seasons or for certain product categories. The financial impact of returns is substantial, with the total value of returned merchandise in the retail industry amounting to $743 billion in 2023.
Despite these challenges, forward-thinking retailers are recognizing that a well-managed returns process can be a powerful tool for improving customer loyalty and driving growth. With Simple changes in your reverse logistics, like providing more flexible return policies and including pre-populated labels in shipments to shoppers can result in massive gains for stores of all sizes.
Making Easy Money With Easy Returns
Today’s shoppers have a wealth of stores to choose between when they’re ready to look for that perfect purchase.
Whether it’s a casual sweater, a luxury bag or electronics there’s more to creating the ideal experience than simply providing timely order fulfillment. Customers say they want better care, but often what they really want is an easy and hassle-free returns experience.This desire for a smooth returns experience is backed by compelling data. According to a recent survey, 92% of consumers say they will buy again from a retailer if the return process is easy, while 79% expect free return shipping.
Here are three ways that easy returns mean more money in your coffers:
- Initial purchases are more likely. Although free shipping continues to be a big seller for shoppers, free and easier returns are also huge influences over whether a visitor will become a customer to begin with. A hassle-free return policy is a powerful driver of customer confidence and purchasing decisions. According to a recent Walker Sands Communications study, 68 percent of shoppers are more likely to shop online if there are free returns available. Of that same population, 58 percent say they’re more likely to shop online if online returns are easy. UPS found that 72 percent of shoppers return less than 10 percent of their purchases, meaning that sometimes more really is more.
- Additional sales after a return. You may be concerned that returns mean an overall loss of revenue, but they can actually mean more sales. UPS’s study found that when returning to a store, 70 percent of customers make an additional purchase and even 45 percent make an additional purchase when returning items online.That number goes up dramatically for Millennials, with 75 percent buying something else in-store and 53 percent buying something extra online.You can capitalize on returns as a sales channel by making the experience positive and seamless. This encourages customers to explore other products or make additional purchases during the return process.Offering instant refunds or store credit can also incentivize customers to immediately use their refund for new purchases, turning a potential loss into a revenue-generating opportunity.
- A chance to mine some useful data. When you dig into return data, you can spot patterns that help you tweak your products and improve the overall shopping experience. This can lead to fewer returns down the line, which is a win for both you and your customers. By using this data to make informed changes, you can boost customer satisfaction and create a more streamlined shopping process. When you receive returns, it’s important to ask the customer detailed questions about their reasons for sending the item back without making them feel like they’re being interrogated. The purpose is to learn more about your shop’s reality versus your customers’ expectations so you can eliminate a high percentage of avoidable returns. For example, if a particular item is returned regularly because customers expected it would be different in real life, that’s a site problem and not a shopper problem. You can minimize that item coming back to you again by improving your product photos, adding a better description or clarifying specific issues.
Reverse Logistics Best Practices For 2025
Returns management has come a long way in recent years, shifting from a back-end headache to a critical part of the customer experience. With shoppers expecting convenience, transparency, and speed, handling returns effectively is now just as important as getting orders out the door. If you want to keep your customers happy and stay competitive in the fast-paced e-commerce world, here are some key strategies you should consider for managing returns like a pro.
Here are 5 best practices for returns management in 2025 and beyond:
- Create a clear and transparent return policy
Make your return policy easy to understand and readily accessible to customers. Clearly outline the conditions, timeframes, and processes for returns. This clarity helps prevent misunderstandings and builds trust with your shoppers. - Offer multiple return options
Give your customers flexibility in how they return items. Consider offering in-store returns, mail-in options, and even third-party drop-off locations. In-store returns can be processed faster and may lead to additional purchases, while convenient drop-off points can improve the customer experience. - Leverage data and analytics
Use return data to identify patterns, improve product offerings, and enhance the overall shopping experience. Analyze why items are being returned, track return rates by product, and use this information to make informed decisions about inventory, product descriptions, and quality control. - Streamline the returns process with technology
Implement returns management software to automate and simplify the process. Offer features like self-service returns, automated return labels, and real-time tracking. This not only improves efficiency but also enhances the customer experience. - Train staff:
Educate your team on proper returns handling, fraud awareness, and customer service best practices. Implement systems to monitor transactions and flag unusual patterns to prevent return fraud while maintaining a positive customer experience.
Take the headache out of Reverse Logistics With ShipWizard In Your Corner
At ShipWizard, we know the value of efficient returns management for e-commerce businesses. That’s why we offer a comprehensive reverse logistics service focused on simplifying the returns process and solving the common headaches related to returns. We provide a local US returns address, handle the inspection and sorting of returned items, and help with inventory optimization. Our web-based dashboard gives you real-time insights into your returns, allowing you to make informed decisions quickly.
For instance, let’s say you run an online jewelry business specializing in high-end, custom-made pieces. Managing returns for such items can be particularly challenging due to their high value, emotional significance, and potential fragility. ShipWizard’s Smart Returns solution helps you by handling the entire returns process, from the initial return request to restocking the item. This includes inspecting returned jewelry for authenticity and condition, ensuring that only genuine products are accepted back into inventory. By partnering with ShipWizard, you can focus on creating stunning jewelry pieces while we take care of the logistics, ensuring that your customers receive top-notch service and that your business runs smoothly and efficiently.
Ready to transform your returns process into a competitive advantage? Partner with ShipWizard today to streamline your returns, enhance customer satisfaction, and boost your bottom line. Contact us now to learn more about how our comprehensive returns management solutions can help your business thrive in the e-commerce landscape. Let’s work together to turn returns into opportunities for growth and customer loyalty.
