Top 9 Ways for Successful E-commerce Returns Management [2024]

Businesses, online or offline, have to deal with product return management. The ratio increases with online stores as the customers have purchased a product without physical examination.

According to Statista, in 2017, U.S. return delivery costs were estimated to be 350 billion U.S. dollars. This figure has been steadily increasing and was predicted to reach 550 billion U.S. dollars by 2020.

Ecommerce returns management can be tricky and if not handled strategically, it may not only hinder sales but adversely affect the customer experience of the store.

Customer is the king. The goal of E-commerce businesses should not only selling products to customers but also to provide a delightful shopping experience.

Comparing E-commerce stores and brick-and-mortar stores, the gap of returning products is shocking! According to Invespcro, at least 30% of all the products ordered online are returned as compared to 8.89% in brick-and-mortar stores.

Numerous refund requests become a headache for an E-commerce store and, certainly, it is a sign of worry.

This post explores the top effective strategies for returns management in E-commerce and how to reduce the refund and exchange rate for your E-commerce.

Top 9 Ways for Successful E-commerce Returns Management in 2024:

1. Offer free return shipping
2. Draft a transparent and detailed refund policy
3. Consider Returns as Opportunity to Improve your service
4. Integrate Store Credit System for Managing Refunds
5. A Systematic Refund Process Management
6. Ensure Safe Packaging and Shipping Process
7. Improve Product Images
8. Auditing Warehouse
9. Leverage Product Reviews

Understand each strategy in detail,

9 Ways for Effective E-commerce Returns Management:

1. Offer free return shipping

   Majority of customers would never prefer to pay for returning a product because of defective and duplicate product or the product which does not match their expectations.

   Even if they do so, customers would not like to purchase again from the same E-commerce store.

   To give a satisfying service, E-commerce store owners should start offering “free return shipping”. Customers will not have to pay a penny for returning a product.

   Offering free return on shipping will increase customer satisfaction towards your brand.

2. Draft a transparent and detailed refund policy

   Preparing a transparent and detailed refund policy is extremely helpful to solve any refund-related problems.

   Being an E-commerce store owner, considering various types of refund requests, you should draft a transparent refund policy. Making the refund policy visible to customers helps when they opt to request for a refund, they can read the policy.

3. Consider Returns as Opportunity to Improve your service

   “Your most unhappy customers are your greatest source of learning.”- Microsoft co-founder, Bill Gates

   No matter how frustrated your customer is due to poor service, your initial priority is to listen to your customer.

   As the customer is unhappy with the service, talk politely and respectfully to customer. Committing that it was a mistake from your side and apologizing are two of the best ways to communicate and handle such a situation.

   Listen to your unhappy customers, improve your service and try not to repeat the same mistake.

4. Integrate Store Credit System for Managing Refunds

   Retaining your customers is important to make a long-term profitable business. Due to a bad shopping experience, a customer asks for a refund, and he has the right to ask.

   However, it is even more important how E-commerce businesses treat their unhappy customers. In order to rebuild brand reputation; give store credit on the next purchase,

   For instance.

   We are extremely sorry for the inconvenience. Because it was our mistake, we are giving you 50 credit points which you can redeem on your next purchase.
   
   If you are a Magento 2 store owner, you can use Magento 2 Store Credit extension that automatically converts the refund amount to store credit.
   

   The best advantage of a store credit system is E-commerce stores do not need to refund customers. Instead of giving refunds, leveraging store credit is useful.

   When a customer asks for a refund, we will give the same worth of store credit. Therefore, on the next purchase, a customer can redeem store credit.

   Two benefits of leveraging store credit system:

   • E-commerce stores do not need to refund.
   • Customer will purchase again from the same E-commerce store because of the store credit.
   • Customers satisfaction

5. A Systematic Refund Process Management

   It would be difficult for large E-commerce stores to handle refund management process manually. Systematic refund management process helps to resolve this issue.

   When a customer asks for a refund and the reason is genuine, refund would be done within 5-7 working days automatically. It will save a lot of time, and it makes a refund process easier for customers.

   Meetanshi’s Magento 2 Refund Request extension can be helpful that allows customers to ask for a refund without having to log in.

   Taking it one step ahead, if you want to implement an entire return merchandise authorization system in Magento 2 store for easy returns and exchange management, you can opt for Magento 2 RMA extension. The module makes it easy for the customers to make an RMA request which boosts customer loyalty and trust.

6. Ensure Safe Packaging and Shipping Process

   There are times when customers receive damaged products and hence they ask for refunds. To manage this, ensure that the packaging is outstanding with the smooth and fast shipping process.

   Two benefits are there of focusing more on packaging and shipping process.

   • The chances of getting product damaged reduce significantly.
   • Fast shipping and good packaging increase brand loyalty of E-commerce store.

7. Improve Product Images

   Customers do not get satisfaction and ask for a refund if the product does not match the product image, which is displayed on the product page of a website.

   Instead of uploading images that are given by the manufactures, hire a professional photographer and upload those images. Moreover, leveraging videos for product reviews are even beneficial and effective way to attract customers.

   Images and videos provide good shopping experience in such a way that customers get to know products visually and expect what they will get.

8. Auditing Warehouse

   Products are being shipped from the warehouse. Even if you have an automated refund process, you should keep your eye on auditing warehouse.

   After doing this, you will come to know bottlenecks, mismanagement, stocks, packaging delays etc. By improvising on this fundamental area, the customer shopping experience can be improved.

9. Leverage Product Reviews

   There are several ways to leverage product reviews. When a customer buys a product, after 4-5 days, send him an email to kindly write product reviews.

   Here are effective ways to leverage product reviews:

   • Allow customers to upload an image of a product and write a review.
   • Allow customers to upload a video of a product and write a review.
   • Allow customers to rate the product based on the star rating.

   When a new customer visits the product page, he would see how the product looks and what other customers have experienced after buying a product.

   To remind customers to write reviews, Magento 2 store owners can leverage Magento 2 Review Reminder extension. Automated review reminder emails can be sent using this extension.

After-sales service is more important than assistance before sales. It is through such service that one gets a loyal customer.

How you treat you, customers, even after selling the product, determine the standards of customer experience. Managing refund requests is a challenging task. However, how you react and what actions you take to solve these situation matters the most.

Implement these tactics for return management in E-commerce and let me know how it worked for you in the Comments section below.

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Thank you.