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Refund & Return Rates

11 Strategies and Areas of Optimisations to Improve Refund and Return Rates

💬 Here's a free checklist of optimisations and 'small wins' to help you manage any rising return and refund rates.
by Dan Siepen
Created On:
17/4/2024

💬 Getting on top of refund and return rates is a lot more than just simply ensuring you're stoping revenue/cost leaks (although this is clearly a critical factor to keep on top of).

In my personal view, refining and optimising processes for reducing returns and refunds is becoming more important than ever for customer loyalty/satisfaction - because let's face it, there's always going to be some sort of return/refunds for any type of eComm store.

If you experience higher volume (than what you would like), these are the key reasons/benefits of why for brands (to keep in mind):

  • It ensures brands provide a better CX - there are numerous solutions that can help build a seamless process for accepting returns
  • Brand reputation is a really key factor - the last thing brands want is bad service reputation being spread/vocalised online
  • It actually can help reduce churn in the long-run when customers come back - having an efficient returns policy in place will keep people around
  • And ultimately, the above leads to having a competitive advantage

Few other areas/benefits I haven't mentioned, but these are the four I often say to keep in mind.

Tactical optimisations and 'quick wins' that are cost-effective to implement for reducing returns and refund rates (and providing an awesome experience for customers)

💬 From product page updates, content to create/illuminate to, and a solid comms strategy - here are some focus areas I recommend to ensure you're keeping across, and hopefully some 'thought bubbles' around better ways to optimise a better CX for visitors/customers in relation to returns and refunds.

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When it comes to refund and return policies, eComm brands should be transparent and have fair policies in place from the start.

Ensure it's clearly written plus accessible across key pages (especially the global footer)Lots of good resources to find policies to write up.

I certainly recommend to check the top stores (especially top stores and competitors in your nice) and what details they have.

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The big thing with good shipping providers is that they're more reliable, which helps manage customer expectations.

Not just related to good shipping, but also quality packaging plays a role and reliable fulfilment, That's why I highly recommend a 3PL - even for brands that may be only doing just over $10k-$20k per month range.

Whilst margins can be tight, you have to weigh up the potential opportunity cost when it comes to fulfilment and packaging, and how refunds/returns affect your bottom line.

Again, costs/margins have to make sense.

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Can't beat good quality customer service and a seamless returns experience.

Whilst using AI agents is fine, if the matter is more detailed, make sure they sync to a human quick to provide a prompt response - so, ensure to train your team for specific queries and to handle multiple chats at once.

One key recommendation I have is to train and encourage support staff to suggest exchanges for items, rather than just pure refunds.

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Speaks for itself really, but you need to make sure you have an awesome UX with your product pages.

Plus, your descriptions and FAQs need to make sense to the specific SKU, and clearly written.

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The best product pages I've found do a stellar job when it comes to including other helpful content mediums - remember, people love watching videos more than ever.

Then of course, imagery related to the product. Having great imagery, especially if there are multiple variants/sizes, can really help paint a picture to the customer of what the product is really like.  Particularly for some niches such as fashion/clothing, sizing plays a role, so combining images and highlighting variants easily is key to minimise possible returns.

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In related to video, use it as a medium to highlight social proof. UGC-style videos always perform well on socials, so why not include it to relevant product pages?

In addition, splash reviews related to the specific SKU, and other images from people who love the product.

It's all about the process of accelerating 'doubt' and giving customers more confidence that purchasing your product is the right decision.

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Have great content and comms across key channels - bold/highlight links about returns/refunds when/where it makes sense.

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Ultimately, exchanges is the best method when it comes to returns, as it ensures to maintain the initial revenue that was generated from the sale.

However, some customers really just want a refund - so as one last chance, consider offering a bonus credit for their next purchase if they do an exchange.

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Highlight customer support to your audience as something you really care about - highlight it across your site, socials and email.

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I mentioned this earlier in regards to "win-back" campaigns, but it's important to break down segments and deliver new offers based on their behaviour/interaction with your store.

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Use a mix of data collection methods, including the likes of pop-ups and asking for 1-click answers, to prompting customers to respond to a personalised email you sent to them.

The main takeaway here is that too many brands rely on "tools" to collect answers and data, which is still very important, but you need to mix with qualitative insights, whether that is through email replies, chat support answers, or via the phone.

👋 G'day everyone, Dan Siepen here from down under 🇦🇺🦘🐨. I'm an experienced growth marketer w/ 8+ years exp. across SaaS, B2B, DTC & eComm. Get to know more about me (check my homepage too) & if you want to connect, just reach out. 👇
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