Customer satisfaction is one of the key factors in e-commerce success. An important part of this is a smoothly functioning return process. Return pricing plays a significant role in this process, and its careful consideration is beneficial for every online retailer.
Clear Pricing Builds Trust
1. Define Clear Return Terms:
Before starting to price returns, it is essential to define clear return terms. What are acceptable reasons for returns? What are the condition and time limits for returned products? The transparency of these terms helps avoid potential disagreements later.
2. Consider Consumer Protection Laws:
It is important that your return policies comply with current consumer protection legislation. For example, in Finland, consumers have the right to cancel a distance sales contract within 14 days without giving any reason.
Costs and Practical Arrangements
1. Return Costs:
Many online stores offer free returns to their customers. This can be a competitive advantage, but it is important to calculate carefully whether your business can financially cover this cost and keep in mind that free returns may increase the number of returns.
Certain products "scream" for free returns, such as clothes, shoes, and accessories. However, consider the following regarding free returns:
free returns encourage your customers to order a larger quantity of products at once, as they know they can return some or all products
a tried-on garment is a used garment, in the worst case you will have to sell the returned garment at a discount, reducing its margin
you pay the return cost + lose valuable working time handling returns
clothing margins are limited, making it challenging or even impossible to allocate shipping and return costs to the product price if you want to stay competitive
sustainability: the more products are returned, the more trucks drive, planes fly, and ships travel
Consideration:
Will you lose customers if you charge a small fee for returns? You can check your store's average shipment cost and halve it for return costs, meaning if your average shipping costs are €9.90 per shipment, you can price returns at €4.95. This way you share return costs with your customer and
may avoid unnecessary returns
save your own working time
maintain your product/clothing margin without having to sell products at a discount
contribute to sustainability
– You can highlight the sustainability aspect in return pricing, getting your customers involved in the sustainability campaign. Many customers today are very aware of sustainability and want to promote it, tips Shipit's Sami Hakanen.
For larger products, such as electronics, spare parts, furniture, sports equipment, and also cosmetics, you can confidently request a return fee, as these products are not impulse purchases and return costs hardly affect the customer's purchase decision. Remember to clearly state the return costs in your store's terms and on the returns page / FAQ page if you have one.
– However, it is absolutely important to listen to the customer and be flexible with return costs when needed to maintain customer satisfaction, Hakanen reminds.
2. Clear Pricing:
If you decide to charge for returns, ensure that the pricing is clear and easily available to customers.
– Don't hide costs, as it can cause distrust among customers, advises Hakanen.
You can also separately price uncollected deliveries in your pricing. In this case, you can charge the customer the full shipping costs and even add a few extra euros for your additional work.
– Remember to be flexible again, as returns are rarely left uncollected intentionally, but this is also good to have visible in your store's terms so you can use it when needed, Hakanen emphasizes.
3. Efficient Return Process:
A well-designed return process saves time and effort for both the customer and you. Quick and clear return instructions help keep the customer satisfied.
– But remember, you don't necessarily need to provide a return card with the shipment, as this is also one proven factor that encourages returns. With clear instructions, customers can for example print a return card from your store or use your return code from the returns section or by logging into their customer account, Hakanen tips.
Customer Feedback and Continuous Improvement
Listen to customer feedback about the return process:
Feedback can provide valuable information about how you can improve return pricing and make the process more customer-friendly. Listen to your customers and actively interact with them.
– Correctly priced returns can improve customer satisfaction and give your online store a competitive advantage. Customers appreciate transparency and flexibility in the return process. This can increase customer trust and loyalty, Hakanen reminds.
Return Pricing in Marketing
If and when you don't normally offer free returns, you can use this opportunity in campaigns. You can advertise for example
order between x-x and get possible shipping and return costs free
order for x amount between x-x and get shipping costs free
But at this point, you need to be aware that you might get a bunch of impulse purchases and the number of possible returns might increase.
– Playing with shipping costs in marketing doesn't take away from your product margin, but remember you can't constantly keep a campaign running, or the campaign will lose its effect and customers will get used to free returns, notes Hakanen.
Finally, it's important to remember that every online store is different. Therefore, return pricing must align with your own company's strategy and financial situation.
– Discuss with Shipit's experts when needed to ensure your return process is both customer-friendly and profitable. Remember that a satisfied customer is the best marketing channel, summarizes Hakanen.
Shipit's professional customer service helps you on weekdays from 9-16:00
+358 (0) 20 752 8488
asiakaspalvelu[at]shipit.fi
in website chat
Read more about Shipit's services for online stores
Also check out our freight services
as a business customer free of charge