Returns Best Practices: How to Make the Returns Process Work for Your Brand

No matter what your customer experience looks like, the journey with your brand should be easy and engaging. It’s exactly what your customers want, expect, and deserve.

Including—or especially—those customers who decide they’ve made the wrong purchase.

A brand shows its true colors when dealing with dissatisfied customers. From the customer’s point of view, there’s no gray area when it comes to returns: either you’re clearly invested in making your customers happy, or you’ve laid the burden entirely at their feet.

Whether online or in store, the returns process is a critical touchpoint. By making the process transparent, helpful, and hassle free, you’ll benefit your customers, your brand, and your bottom line.

Your Returns Process Should Be a Top Priority

Many brands see the returns process as a cost of doing business rather than an opportunity to build customer loyalty and lifetime value. By minimizing their investment, these companies are costing themselves long-term revenue growth opportunities.

Take Zappos, for example. Zappos is one brand that has mastered the art of happy returns. Its most profitable customer group? Those who return 50% of their orders.

Think of the returns process as your last, best chance to make things right with customers who aren’t happy with their purchases and to build loyalty and trust. You can help customers find a better solution to save the sale or, at the very least, help them get a refund with little effort—and as quickly as possible—so they can spend that money with you on a future order.

Online Returns: 3 Best Practices

Just like the online shopping experience, the online returns process should be transparent, consistent, and fast. There should be no policy surprises or failed expectations. And there should be very little effort on your customer’s part. Here’s what the process should look like in practice.

1. Make Return Shipping Free

We believe customer convenience is more important than cost. But leading retailers are split on this issue. Just half of the 30 brands in our StellaService Ecommerce Index offered free return shipping in some capacity in 2016.

At a minimum: No matter which camp you’re in, provide shipping costs and policies up front so customers can make informed purchase decisions.

2. Send a Return Shipping Label With Every Order

During our recent returns study, 50% of Index brands sent a return shipping label in the original order packaging. Just 30% offered prepaid return shipping labels. Slightly fewer (26%) provided adhesive prepaid return shipping labels—a best-in-class experience.

At a minimum: Be sure to include printed return shipping labels with original orders so customers don’t have to log into an account page and print labels themselves.

3. Keep Improving Your Speed

Over the past two years, we’ve seen warehouse processing speeds improve significantly among our Index brands. One great example is Home Depot, whose supply chain investments have really paid off. In 2014, it took the company an average of 13.2 days to process returns to its warehouse; in 2016, the average was just 1.3 days.
Amazon and Wayfair lead the pack in refund speeds—1.7 days and 2.3 days respectively. Both brands process returns as soon as items are scanned for pickup by the shipping carrier (rather than after items arrive at the warehouse) and issue refunds right away.

By making returns processing such a high priority, these and other brands in our Index are raising customer expectations across the board—and raising the stakes for their competitors.

At a minimum: Customers appreciate speed, but they insist on knowing what to expect. Be sure to let customers know how long it will take to process their returns and issue their refunds.

In-Store Returns: 4 Best Practices

More returns come back to physical stores than to warehouses. For brands, this is a big positive. In-store returns give associates a chance to engage customers in a friendly, helpful way—and perhaps save the sale. Here’s what you can do to maximize the opportunity.

1. Make Sure Customers Know Where to Go

Many big-box retailers have a designated returns counter in their stores. Department stores, on the other hand, tend to allow returns at any register. In either case, associates should greet customers shortly after they enter the store and guide them to the returns area. If you allow returns at all registers, communicate that online and on the back of your sales receipts.

At a minimum: Don’t allow customers with returns to wander around confused. And don’t force them to look for someone who can help. If your team can’t be proactive on the floor, make sure your signage is impossible to miss.

2. Minimize the Wait

When we audited our Index brands’ in-store returns process, the average time our shoppers spent standing in line was 1 minute, 3 seconds. In about half the shops, the wait was less than 30 seconds. A handful of brands made our shoppers wait in line less than 10 seconds. Not surprisingly, wait times tended to be much smaller in stores where returns can be processed at any counter.

As with online returns processing, customers with in-store returns don’t want to wait very long. They want the transaction handled quickly so they can get on with their day—or get back to shopping in your stores.

At a minimum: Do everything you can to keep the line moving. If you have a designated returns area, consider creating multiple stations depending on the type of return (in-store purchase versus buy online, return in store), or refund versus exchange.

3. Go Beyond the Transaction

Welcoming returns with open arms and demonstrating a sincere concern for the customer and his or her issue make for a best-in-class returns experience. They can also save the sale. In your training, make service a priority by directing associates to: 1) politely ask for a reason for the return; and 2) suggest more suitable alternatives.
This is a great opportunity to engage your customers. And it’s a great way to distinguish your brand, since most of the brands we studied aren’t using this practice consistently (and some aren’t at all).

At a minimum: Your goal should be to make a human connection. Focus on getting to know customers a little better in the limited time you have with them. Even if the sale can’t be saved, you might just guarantee a repeat visit.

4. Be Ready to Answer the Most Common Returns Question

The most shocking results of our Index study involved this simple question: “How long will I have to wait for my refund?” Not one of the brands we shopped gave consistent answers. And the answers varied widely. One retailer’s associates gave answers ranging from “right away” to “7-10 days.”
Every time your associates answer this question, they set a clear expectation. If the expectation isn’t met, customers will lose faith in your brand. Make sure your associates know your systems and know how they’re supposed to respond.

At a minimum: If the best answer your employees can give is “It depends on your bank,” this is a reasonable answer—as long as it’s communicated consistently, and explained when necessary.

Learn How Leading Retailers Are Upping Their Returns Game

We cover all the key findings from our Index brand study in our recent webinar “Understanding Ecommerce vs. In-Store Returns.” In it, you’ll find out which retailers are best in class and why—and which ones surprised us. And you’ll come away with more insights and tips for improving your returns process and distinguishing your brand.

Understanding Product Returns - Ecommerce vs In-store