Why offering free returns can make you more money

September 16, 2015

Do you offer a hassle-free, free returns service to your customers? In the USA, 35% of all online clothing sales are returned so this is a cost right? Wrong. Research suggests that offering a free returns service can actually make you money, not lose it as many of us might believe. Here’s some common thoughts about returns and suggestions as to why they might not actually be true!

Returns cost me money

Whilst there is clearly a cost at the point of return, a long term approach suggests that you will indeed make more money from not passing this on to the customer. An American report from CNBC followed two large online retailers that offer free returns over 49 months. The average customer spend increased incredibly from $620 to $2500.

Most customers don’t read our returns policy

Over 60% of customers do apparently! 92% stated that convenient returns would influence their decision to purchase with that retailer. Mirroring this, a UPS study highlighted at 80% of online shoppers were more likely to make a purchase when the retailer offered convenient and hassle-free returns.

Most returns are made by one-off shoppers

Another American report (ABC News) identified that the majority of returns are made by the most loyal shoppers.

My returns policy has no impact on future sales.

Oh yes it does. Not only does a decent returns policy help with your conversion rate, it brings back repeat sales too, from existing customers that are more likely to become loyal to you because they trust that there will be no problem, should they need to return something. UPS stated that 81% of customers are loyal to online retailers that offer a good returns policy.

So, the decision is yours and it does of course partly depend on the nature of the product that you are selling. You might not be able to offer free returns but you might be able to make the process much more straight forward and customer friendly. It’s well worth taking the time to consider the detail of your returns policy as a few tweaks can have a very positive impact on your bottom line.

Luke Hodgson

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