The e-commerce industry continues to grow at a healthy rate as brands heighten their store experiences and more people gain access to the internet. By 2021, worldwide e-commerce sales are forecasted to reach $4.88 trillion, up from $1.37 trillion in 2014.
But despite more customers and revenue up for grabs, one giant detail stands in the way of e-commerce stores enjoying healthy margins. As easy as it is to buy online, it’s just as easy to have a change of heart or receive a product that doesn’t match expectations.
This is evidenced by e-commerce’s return rate, which hovers around 30 percent for all online orders. In verticals with a higher potential for product misalignment, like fashion, return rates regularly exceed 40 percent! Imagine three or four out of every 10 orders leaving your warehouse only to come back at a later date. The wasted time, money, and potentially, product can be enough to sink an e-commerce store — especially one just starting out.
Let’s look at how you can develop — and communicate — effective shipping and return policies for your e-commerce store.
The most effective way to ensure your shipping and returns processes blow up in your face is to keep your policy broad. Think of your terms as a legal statement in that it protects you from varying customer interpretations. If you’re not clear about the details, how will customers know what to expect? Your guidelines should state where you ship (and do not ship); when you ship (including cut-off times if you offer same-day shipping); items that you don’t ship to certain places; which providers you use; the shipping modes you provide; information about shipment tracking; and a whole lot more. Failing to include this information will create a lot more work for your customer service team, potentially lose customers if things don’t go according to their self-conceived expectations and even leave your store vulnerable to legal issues.
Likewise, your return and refund policy need to be equally stringent. Is there a deadline for return requests? If so, is it uniform across all products or are there exceptions? Do you offer refunds, and if so, what are the qualifications (e.g., defective, no longer wanted, etc.) and through which form(s) do you process refunds? Do you allow returns/refunds for items on sale or clearance? How long does your return/refund process take? In what condition does the product need to be for you to accept the return? And the juiciest decision: will you offer free shipping? If you do, does free shipping depend on order value, product or mode of delivery? These questions should get you started developing your own policy but are by no means exhaustive as every e-commerce store is different.
Watch Your Tone and Language
The beauty of language is that the same thing can be said in vastly different ways that completely change the feeling of the message. So, even though you want to leave no stone unturned with your shipping, refund and return language — make sure you’re still communicating your guidelines in a positive tone. This goes hand in hand with keeping your terms digestible and easy to understand. Avoid overtly negative words like “no,” “can’t,” “refuse,” “forbidden,” “won’t,” unless absolutely necessary, which should be rare. Finally, consider how you want to portray your brand, and have your policies reflect it. Even small tweaks in word choice and phrasing can help accentuate your branding.
Accommodate the Customer
You don’t want to entice customers to order products and return them, but in the world of Amazon, brands need to be accommodating to attract business. While not all products are created equal, (such as a store that sells makeup versus, say, appliances), it’s generally a good idea to offer free, timely shipping if you can. If shipping really is a cost burden for your model, feel free to explain that nicely in your terms. Your transparency will leave customers with a better taste in their mouth, and assure them that you’re not needlessly marking up their order.
When it comes to the actual return process, the simpler you make it for customers, the higher your returns. In fact, 95 percent of customers will return to an online store and make an additional purchase after a positive return or exchange experience. Allow customers to self-print a prepaid packing label — whether you charge for returns or not. There are no escaping returns in e-commerce, so you may as well make the process as seamless as possible.
Make it Visible
Having clear, thoughtful shipping and return policies saves you money and customer-service issues. However, if your policy can’t be found easily by users, the only advantage you’ll get is some legal protection. Make your guidelines visible on every page of your site, ideally in the same place so customers know how to find it. Many e-commerce brands include their conditions in the footer of every page, but you can decide where yours fits best.
When done well, shipping and returns policies can earn e-commerce brands repeat business and protect against potential legal issues. When in doubt about how to craft your own guidelines, keep the above tips in mind, consider the customer experience and refer to your operating margins to ensure that an average return rate doesn’t sink your profits.