2 Main Reasons for Returns
There are a number of reasons why a customer would choose to return an order, which can be down to the customer, retailer or shipping provider.
Customer-Related Reasons for Returns
Customers are probably the biggest risk factor contributing to returns in an online shop. A study by ibi Research showed that 40% of online customers already expected to return some of the goods when placing the order. The highest return rate was seen in the clothing sector, with 25%. Similarly, a research from Bitkom revealed that every tenth online order is sent back, especially in the 14 to 29 age category. A consumer survey by PwC Germany showed that almost a third of online shoppers sometimes place orders and simply send them straight back. Consequently, there is an immense burden on returns management in the online shop. A customer’s reasons for returns are quite clear:
- 62%: Item was not suitable
- 39%: I did not like the item
- 30%: Item defective or damaged
- 30%: Item did not match the description
- 20%: Ordered multiple versions to choose from
- 7%: Wrong order
- 5%: Delivery time too long
- 2%: Better offer in a different online shop
- 2%: Other
Retailer-Related Reasons for Returns
The reasons for complicated returns management in an online shop can also be down to the retailer themselves. Many retailers will offer short delivery times to encourage customers to buy, and when the actual delivery takes longer, the customers start to lose trust. Many send the goods back as soon as possible simply out of anger. It follows that accurate information on the delivery time improves returns management in the online shop.
Retailers who deliver their goods in contaminated packaging increase the return rate. The same applies for poorly packaged goods, which lead the customer to doubt the seriousness of the dealer. Introducing after-sales support in an online shop establishes effective returns management. Customers who are not immediately satisfied with a product can simply phone up and questions can be answered in only a few minutes.
Online shops without after-sales support run the risk that the customer will exercise their right of revocation. Retailers who use a rating system benefit from an exchange of opinions between their customers. The reviews of individual products help the customer to buy the right product in the first place. Inaccurate product descriptions or incorrect product images indicate an urgent need to improve return management in the online shop. The most common retailer-related reasons for returns at a glance:
- Incorrect information on the delivery time
- Poorly packaged goods
- Lack of after-sales support
- Incorrect product description
- Lack of quality assurance
- No rating system
The number of retailer-related returns can be reduced using relatively simple measures. It is therefore all the more important that online shops consider this as soon as possible.
Shipping-Related Reasons for Returns
If the shipping provider makes a mistake, the customer does not receive their goods. Occasionally, the goods accidentally remain at the distribution center. Items may be dropped accidentally and goods damaged by employees. Trivial circumstances, such as missing delivery notifications, can sometimes also be the reason for a return. The reasons for returns to an online shop caused by the shipping provider at a glance:
- Accidental damage
- Goods not delivered
- Delivery notification lost
What Does a Return Actually Involve?
The sequence of returns management in an online shop is always the same. A customer buys a product but decides not to keep it. They exercise their right of revocation and send the product back. Then, the store operator transfers the money back or sends the customer another product. Here, the store operator may ask that the customer cover the shipping costs, but personnel and process costs are covered by the operator themselves. Once the goods have been received in the online shop, they must be examined for any damage. Finally, the goods are either repackaged and returned to the goods cycle, or they are discarded.
The Costs of an Online Shop Return
Over 30% of shop owners do not know how much the average return costs. The returns management of an online shop may be a huge cost factor, but it is comparatively easy to monitor. Each free online shop return costs the store operator on average around $40*, which should be reduced with the introduction of returns management. This is because in addition to the
- Postage and packaging costs, there are also
- The costs of processing and re-entering items as well as
- Costs resulting from the loss in value or, in the worst cases,
- Costs of destruction if the product cannot be resold. There are also
- Missed sales and
- Capital tied up due to time differences.
An online shop must rely on other sales in order to cover the $40. So in order to be successful in the long term, the e-commerce manager must use efficient returns management to reduce costs and thus become more profitable in this area. More than 44% of online shoppers also claim that they have never taken advantage of their right of return in an online shop. Online shops that draw on this increase their sales and are able to save on personnel and process costs. Return costs can be reduced in a number of different ways within the three fields of returns management. These areas are preventing returns, processing returns and checking returns.