5 Best Practices for Handling Returns

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While no retailer likes dealing with returns, it’s part and parcel of running a business – especially around the Christmas season. In 2011, the US National Retail Federation estimated that shoppers return 9.9% of their purchases, amounting to around $46 billion worth of merchandise being brought back to stores!

No matter how great your store is (and we know our retailers’ stores are pretty darn awesome), there’ll always be people who won’t be satisfied or need a genuine return. However, you shouldn’t let that stop you from putting your best foot forward and accepting those returns with a smile. Instead of seeing returns as costs or chores, see them as opportunities to wow shoppers and turn them into loyal customers.

See, when a shopper returns an item, they’re already inside your store – making it easier for you to engage and convert them. Below are a few ways to do just that:

Grab the opportunity for conversion

Did someone come in to return a pair of shoes because they didn’t like the style? Make a friendly suggestion to take a look at the new arrivals in your footwear department. Maybe they’ll find something they like in there.

Many retailers use these situations as an opportunity to up-sell other items. For instance, when processing exchanges, some e-commerce merchants offer customers the chance to include additional items in their exchange shipment at a discount.

Why not do something similar at your store? If a customer comes in to exchange a product, gently ask if they would like to add other items to their order, and you’d be willing to give them a discount if they make the purchase while they’re still in the store.

Make it painless

Don’t make people jump through a thousand hoops just to return a product. Eliminate paperwork and bureaucratic policies. And for the love of all things retail – ditch the restocking fees! Nothing guarantees that a customer will never buy from you again than asking them to pay a fee for returning something that didn’t meet their standards.

By eliminating the risk and hassles of returns, you are building goodwill and loyalty with your shoppers. When they see how gracious you are, they’ll like and trust you more. They will likely purchase from you in the future and they’ll be more inclined to share their positive experience with their friends and family.

Implement an extended holiday return policy

Impress customers with your flexibility by being lenient with gift returns. A lot of shoppers purchase holiday presents in November (sometimes even earlier) which means that people who want to return their gifts in January won’t make the usual return cutoff of 30 days. Not to mention, people are extremely busy during the holiday season so heading back to a store to give back items won’t be their priority.

That’s why it helps to have extended holiday return policies that give shoppers more time and flexibility. Take a leaf off Apple’s book. Instead of its standard 14-day return policy, Apple gives people up to January 7, 2014 to return items purchased between November 1 to December 25, 2013. Similarly, at Best Buy, gift purchases made between November 3, 2013 and December 31, 2013 may be returned through January 15, 2014.

Use returns to gather insights (and better your business)

Returns can give you a ton of insights about your products, your customers, and even your marketing strategy – so make it a point to gather feedback every time you process a return or exchange. Always ask why they’re returning the product. Were they not satisfied? Did they find a better alternative somewhere else?

Use those insights to improve your store. Maybe you need to change some features or introduce new designs, perhaps you need more Large-sized clothing and fewer Mediums? Or maybe it’s just a matter of cost, and your pricing strategy needs a little bit of tweaking.

Or, maybe the issue isn’t with your product but with your marketing. What messages are you putting out there? Do you need to be clearer when communicating who the product is for (and who it’s NOT for?) Is your marketing attracting the wrong types of customers? In any case, the only way to find out is by asking your customers.

Use returns to build new relationships and strengthen existing ones

As customer service expert, Micah Solomon, says on Forbes:

“Sometimes a return even means a chance to introduce yourself to an entirely new customer who received the item as a gift, but in the wrong size or color, and is now showing up at the slowest time of the year, when you really need traffic in your stores.

Don’t miss your chance to wow them.

Sure, they may be in your store to return an item, but welcome them with open arms anyway; they might just find something that they like. And when they see how accommodating you are, there’s a good chance that they’ll shop with you again. The same goes for existing customers. Being welcoming and cheerful about handing returns shows how much you value them. That in turn, will keep them coming back.

Don’t make the same mistake that Williams-Sonoma did. In an article in TIME magazine, a shopper shares how she felt betrayed by the company when, after years of shopping with them, Williams-Sonoma wouldn’t let her return a gift without a gift receipt. As TIME put it, “she’d expected that due to her loyalty as a customer, as well as the amount of money charged by the store, the retailer would have a more flexible return policy.” Needless to say, the shopper took her business elsewhere.

What about you? Do you agree or disagree with the tips above? Share with Vend’s community of 8,000+ retailers your tips for winning customers over when they’re making returns!

About Sim Ahmed

Sim was a writer and technology journalist in a former life, before coming on board at Vend to help us communicate with our amazing community of retailers, partners and developers. Feel free to get in touch with Sim on Twitter, LinkedIn, and Google+.

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