We explore why ecommerce return rates are so high and give advice on how to reduce their impact on your business

According to Shopify’s 2023 trend report customers who shop online return 20-30 per cent of purchases compared to 8-10 per cent of in-store purchases. Worse still, the average return rate for luxury items is 50 per cent.

High return rates can pillage profit margins, cripple conversion rates and ultimately destroy a business. But it’s not all doom and gloom – by looking at the problems causing high return rates and seeking to solve them, we can reduce and even maximise on returns. 

Why do customers return products and how can we discourage them?

Problem: Customer bought multiple sizes and options

Let’s be honest, we’ve all been guilty of it, haven’t we – 30 per cent of online shoppers intentionally overbuy and then return items they don’t want, according to Soocial. 

This is particularly common when a company offers free shipping and returns, enabling customers to buy clothes in numerous sizes and colours with no intention of keeping every piece they buy.

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Solution: Charge for returns

One way of dissuading customers from buying en-masse could be to introduce return fees, something that Zara has done for online purchases. In 2019 ASOS also famously started banning the accounts of customers associated with serial numbers of returns.

Be cautious though as customers, particularly loyal ones, might be enraged at such a change in company policy. As By Association Only’s Head of Growth George Linton says, “Make sure your most valuable customers are given the right treatment, or they won’t come back.”

Allowing them to return items to physical stores for free might lessen the blow, for example.

Problem: Ill-fitting clothes

You probably won’t be surprised to hear that clothing has the highest return rate in ecommerce at 26 per cent. This is usually because pieces don’t look or fit as the purchaser anticipated.

Solution: Accurate and easy-to-find product descriptions

There are many ways in which you can attempt to reduce returns caused by ill-fitting clothing or items being the wrong size. Ultimately, customers need to be confident that what they see online mirrors what they will take delivery of and the more detail you give at the time of purchase will help ensure that happens.

Reduce returns and increase conversions by including the product’s weight, dimensions, and materials used to make it. If appropriate always provide a size guide, including referencing the size of clothing a model might be wearing as a comparison – something Oh Polly is great at.

Some brands use quizzes to help customers find the right size or product for them – ASOS has a style quiz that ensures the right size of clothing is pulled through depending on the item the customer is looking at, whilst Champo’s quiz helps you discover which shampoo and conditioner is best suited to your hair type.

Solution: Customer reviews

Reviews are also a great way for customers sharing feedback on how a piece fits – for example, if it comes up quite large and therefore it’s best to buy the size down, or if it’s a slightly different colour in real life than in the pictures.

Yotpo, Trust Pilot, Okendo and Feefo are all fantastic apps that help merchants to gather reviews and use them to boost sales and reduce returns. Although of course, pictures should be as detailed and accurate as possible in the first place.

Solution: Allow customers to try at home before they buy

Some luxury retailers including Victoria Beckham use companies such as Harper Concierge, which allows customers to order clothes online and then try them on in the comfort of their own homes. 

As well as benefitting busy customers who struggle to get to a physical store, consumers can embrace the advice of expert advisors who also take away the unwanted clothes at the end of the trying-on session.

Solution: Use augmented reality 

It’s becoming increasingly popular for brands to bring products to life for customers through augmented reality – something that particularly suits furniture brands who want to help show how large pieces would look in their consumer’s homes.

In fact, Shopify reports a 40 per cent decrease in products being returned when visible in 3D before purchase; purchasers are better able to inspect items up close, “try them on”, and picture them in situ without the faff of having them delivered first.

Eyewear brand Cubitts’ website has multiple tools to help customers find the right product, including a virtual try-on feature on the product pages, 360-degree views and customisation of product previews. There is also a custom frame-finder quiz. Read the full case study here.

Problem: Products are damaged or broken

A particularly frustrating figure is that 80.2 per cent of returns happen because a product is damaged or broken. Whilst some breakages can’t be helped, action can and should be taken to prevent them from happening. 

Solution: Pack and ship items securely

It’s unlikely that an item is damaged when it leaves your warehouse, but it is up to you to choose a trustworthy delivery partner and package pieces sufficiently enough to stop them from being broken.

Before packing, make sure each item is in perfect condition. Once you’re satisfied it is, use the correct protective material to wrap it – it’s also key to choose the right size box or bag to post the item in, so it doesn’t jiggle around inside during transportation. Use fragile labels if necessary too.

Problem: Products arrive too late

As well as products arriving broken, they can often arrive too late, resulting in seven per cent of pieces being returned. 

Solution: Keep customers informed

Again, you can’t always help delays caused by strikes and issues with your delivery partner, but what you can do is keep your customers informed at multiple points of the delivery journey.

Clearly defining delivery times at the point of purchase is the first step to decreasing the number of enquiries about where someone’s shopping is. Include countdowns on your product pages as well as clear descriptions of what different types of delivery actually mean – for example, express might mean 48 hours or longer, not the implied 24.

The next step to keeping your customers happy is to let them know if and when their shopping is delayed, and when it might turn up. Providing a tracking ID as part of the dispatch notification is a great way of keeping purchasers informed.

It also pays to keep customers informed about the status of their return, if they do ultimately return an item. Brand perception and reputation are key, so do everything you can to keep customers happy before they resort to social media to make a public complaint.

Updates can be sent by email, social media or SMS using apps such as Gorgias, Dotdigital, and Klaviyo, and should include when the parcel has been received back to your warehouse and when the refund should be expected.

How to do returns well

When there are returns, which there inevitably will be, it’s important to do them well. Here are our top tips on how to improve your returns process.

Utilise useful tools

Shopify has recently launched customer self-serve returns, a tool that helps customers easily request a return through the merchant’s online store. 

Customers will receive a decision on the return, instructions to return the item, and other updates whilst merchants will be notified of pending return requests which they can then approve or decline as well as provide instructions for returning the item. 

They can also easily track returns in the admin to save time. Click here to find out more

Another useful tool is Loop Returns, which encourages customers to exchange goods rather than request a refund. Consumers are asked why they are returning, offered an alternative product and provided with a shipping label. You could even use returns as an opportunity to upsell.

Allow customers to return items to a physical store

Another way to potentially upsell is allowing customers to return items in a physical store if indeed you have one. As well as creating an opportunity for customers to try on alternative sizes or see different options, they might be enticed into buying additional pieces that catch their eye.

Make your returns process sustainable 

Last but not least, Shopify’s 2023 trend report documents that, “three-quarters of customers intend to shop more with retailers that are making their returns process more sustainable. Another 71 per cent would be willing to pay more to return with a sustainable option.”

One simple way of making the process more sustainable is by forgoing the prepackaged free-return labels in packages and encouraging customers who wish to return to go online and print only the label that’s needed from home.

About By Association Only

By Association Only is the Shopify Plus agency for the world’s most design-conscious luxury brands. Get in touch to discover how our team of experts can support your brand’s Shopify ambitions.