How to Optimize Your Ecommerce Value Proposition
By Tom Wintaugh
Learn how to shape a return policy that drives conversions.
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A well-crafted ecommerce return policy isn’t just a safety net for your customers, it's an important aspect of your total business strategy that reflects your brand’s reliability and influences potential buyers' decisions. Does that mean that businesses should absorb costs associated with returns, and encourage customers to take advantage of easy returns when they need to? In this blog, we’ll explore the costs and viability of offering free returns, and help you create a return policy that works for your business and buyers.
Here’s an eye opening statistic: 30% of all ecommerce purchases are returned (compared to less than 9% for physical retail), and a whopping 79% of all online shoppers now expect free shipping for returns. However, offering free returns can be a double-edged sword. Free returns can boost customer trust and potentially increase sales but they can also bring added expense that cuts into profit margins.
Creating a return strategy requires a balance between customer satisfaction and maintaining healthy margins/healthy resource allocation. Here are the key pillars of an ecommerce return policy:
Transparency is essential for building customer trust. Ensuring your ecommerce return policy is communicated clearly on your website, with all the terms and conditions laid out in an easy to understand manner, is the baseline. Return policy should also be featured as a conversion driver. Letting customers know that there is minimal risk in any purchase will help them feel more confident in clicking “Buy Now.”
A Harvard Business Review study found that many shoppers treat funds they receive from a return as already “lost” and are more likely to spend that money again on a replacement or new item. To leverage this trend, merchants should consider incorporating a form of upsell messaging along with return communications. This might come in the form of product suggestions, coupons, or feedback surveys to help shoppers connect with a more satisfying item.
If you want to know how to reduce returns, ask your customers directly what about the experience could be better. Encouraging feedback from customers on their return experience can offer real insights into areas of your business or products that need improvement.
Remember that a well-articulated return policy isn’t just a tool for customer satisfaction—it's also a clear representative of your brand’s reliability and commitment to quality service. Take the time to develop and continually refine your return policy, and look at associated costs as an investment in building long-term customer relationships.
Katy Ellquist, Miva’s Digital Marketing Strategist, is an accomplished writer, marketer, and social media analyst who has created sophisticated content campaigns for a broad range of professional clients. She brings to Miva a complex understanding of ecommerce trends and techniques, building upon extensive digital agency experience and a prior role as direct liaison to Miva’s top accounts. Katy is a regular contributor to the Miva blog, covering essential ecommerce topics like design & development strategy, site optimization, and omnichannel selling, with the goal of increasing the actionable knowledgebase of the entire Miva community.
Tom is a Content Marketing Specialist at Miva.