Taking the Stress Out of Refunds and Returns

By Myles Dawson, UK Managing Director, Adyen

Popular shopping events, such as Black Friday, Christmas and January sales are synonymous with ringing cash registers and bustling warehouses. But the deal-driven euphoria and enthusiastic end of year shopping is often swiftly followed by a spate of returns.

Last year, the pandemic saw the majority of purchases move online. In fact, our recent research report suggests that online will remain the channel of choice for many. Nearly a third (31%) of UK consumers say they’ll shop in-store less even after the pandemic. And 72% want retailers that opened an online offering during the pandemic to keep it going.

Online shopping has many benefits, but it has some pitfalls. Critically, it usually eliminates the ‘try before you buy’ option. This means purchases made online are three times more likely to be returned than those made in store. So it’s essential to have the systems in place to process returns and deliver an amazing customer experience while you’re doing it.

This article will explore how you can prevent refunds in the first place, manage them when they occur, and strengthen your customer relationships in the process.

Stop returns before they happen

One way of lessening the impact of returns on your ecommerce business is to avoid them happening in the first place.

It may seem counterintuitive but having a lenient returns policy is one way to reduce returns. According to a University of Texas study, the larger the window provided to shoppers to return an item, the less likely they are to return it. Most online retailers have a thirty day returns policy, but only 5% of shoppers would consider returning an item after thirty days.

Another major reason for returns is inaccurate product descriptions on the website. In fact, ‘the item did not match its description’ accounts for 64.2% of returns. This is a common occurrence among online clothing stores where items are returned because the size was wrong, the colour was different, or the texture not the same as hoped. To combat this, make sure you provide as much information about an item as possible, and include hi-res images to give shoppers a real feel for the product. Gap’s Dressing Room goes one step further using augmented reality so shoppers can try on virtual outfits.

Use your returns policy as a sales tool

Returns policies are read by 67% of shoppers. So why not put as much effort into it as any other piece of content on your website?

Making the content clear and simple is the first place to start. It’s always best to write your returns policy with limited jargon and legal terminology. You also need to be as transparent as possible and make sure your shoppers agree to all of your terms. Clearly display the two essential tick boxes, Terms & Conditions and Refund/Cancellation Policy on your checkout page.

It’s also important to ensure your returns policy reflects your brand. Too often brands targeted at Millennials have returns policies that seem like they were written by an older generation. If your brand’s tone of voice is friendly and relaxed, your returns policy should match.

Use returns to build loyalty

If items are returned, it’s important to recognise this as an opportunity to strengthen your relationship with a customer. Be clear, open, and responsive in your communications around returns. Just as customers like to be continually updated as to the status of orders, they expect the same level of transparency about their returns. Giving customers options for their returns, such as rescheduling of delivery, or the provision of vouchers, will go a long way towards keeping them happy.

Returns happen

Returns are a facet of any business. Unfortunately, at this time, many businesses may have to refund substantially more than under normal conditions. The best way to deal with refunds is by reducing their frequency. When they do happen, you can manage them through open communication and a well tuned risk platform. Utilising a single payments platform can also elevate some of the pressures on your business, particularly when it comes to reconciling, executing, and disputing refunds.