How to Reduce Returns in Ecommerce

Ecommerce returns aren't new.  They’re more complex, expensive and critical to the customer experience than ever. 

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As return rates rise, brands are rethinking not just how they reduce returns but turn them into retention moments to main profitability. 

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Today’s D2C brands are moving towards ecommerce returns solutions that simplify operations whilst improving the post purchase experience.

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If you run an ecommerce business, average returns hover between 20% and 30%. For categories like fashion and footwear, it’s often higher. That’s why it’s no longer enough to just react to returns, you need a smarter system.

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We’ll unpack how brands are rethinking their ecommerce returns management strategies to reduce refund rates, increase exchanges, and protect lifetime value. 

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What Is the Average Ecommerce Return Rate?

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The average return rate in ecommerce varies by category. Apparel and footwear typically see the highest rates, sometimes climbing above 40%. 

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These numbers stem from behaviors like size bracketing, buyer’s remorse, and unclear product descriptions. 

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When ecommerce brands understand these patterns, this is the first step into optimizing your customer returns strategy.

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What Causes Customers To Make Returns?

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Many customers' returns are avoidable when brands address the key triggers upfront. These include poor fit, unmet expectations, or damaged goods. 

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Occasionally, customers over order with the full intent to return part of their basket. It's not always malicious, it’s a de effect of a shopping sight unseen.

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Common reasons include:

• The item didn’t match the product description
• Multiple sizes were ordered intentionally
• The product arrived damaged
• Delivery delays
• General buyer’s remorse

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How much do Returns Cost Ecommerce Brands?

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Ecommerce returns may seem to be a routine part of selling but costs can add up quickly. Industry studies suggest that a single return costs between 20% and 65% of the original price.

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In addition to this, studies show that online fashion alone generates an estimated $25 billion in processing costs with a 24.4% return rate in 2023.

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With each return brings with it restocking fees, reverse shipping, manual handling, and potential product devaluation. 

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There is also the hidden cost of every refund is a missed chance to retain revenue or build long term loyalty.

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76% of customers say free returns are a key shopping factor, brands must shift their mindset from reactive to proactive to create personalized experience.

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Ecommerce Returns Best Practices

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These ecommerce returns best practices are designed to help brands build smarter post purchase process to turn fewer returns into more revenue:

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Turn Refunds into Exchanges or Store Credit

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Encourage exchanges with product alternatives and small incentives like store credit. By doing so, you’re turning exchanges into more revenue retention which builds customer loyalty. 

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Have a Clear Returns Policy

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State your policy clearly and proactively on product display pages, in checkout, and in order confirmation emails.

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Clear communications around return conditions can help to reduce return rates overall. 

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Keep Customers Well Informed About Their Returns

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Make it easy for customers to start, track and complete a return. A returns portal and automation reduces the manual process for your team.

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Ecommerce returns solutions, including an RMS system, email trigger and RMA workflows to reduce manual errors and speed up the time for you to restock.

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Protect Your Business Against Return Fraud

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Returns fraud is becoming more common like wardrobing, where customers wear the products a few times and then return them for a full refund.

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Having a clear returns policy with automated checks can help you to understand customer behaviour to reduce risk without impacting your relationships with customers. 

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Have a Clear Returns Window

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Create a strong return eligibility process for customers by their order value or product type. Traditionally, shoppers expect 30 day returns for all products, but this varies. 

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Consider different return windows for your products and offer extensions for VIPs where retention is higher. 

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Use Returns as a Retention Opportunity

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Include remarketing nudges, credit reminders, or personalized offers post return. If your return is handled well it could potentially lead to a second purchase, especially if the returns experience is made easy.

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Identify Return Trends in Returned Items

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Track product level return patterns to identify common trends with your customer returns. This can help brands understand if there’s misleading product information or particular SKUs that are commonly returned. 

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This data helps to predict and provide you with opportunities to resolve return issues and increase your profits. 

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Turn Ecommerce Returns into Revenue with Swap Commerce

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Returns don’t have to drag down margins. Investing in an ecommerce returns software, can help you become closer to your customers and provide them with a better quality service & experience.

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More importantly, a modern return experience reflects your brand values. It shows customers that you're easy to do business with, even when something doesn’t go quite right.

Get started and book a demo today!