It’s Time to Take the Friction Out of Returns

As shoppers, we search, browse, buy — and sometimes we return. For retailers, the word “return” may trigger heartburn as it induces instant thoughts of lost revenue, inventory chaos and logistical nightmares. Additionally, with consumers increasingly taking advantage of easy returns processes, including in-store returns or in-home pickup, it’s clear to see why retailers can view returns as the enemy.

While it’s no doubt that returns are a huge pain point for retailers, they can be even more painful for consumers who constantly encounter negative customer service experiences throughout the returns process, leaving a bad taste in their mouths and driving them to seek new brands to engage with. This is especially damaging for brands, considering that 82 percent of customers stopped doing business with a company after a bad experience, according to the Internet Trends 2017 Report by Mary Meeker.

So, the question is, “who is the problem?” Is it the consumer or is it the retailer that actively makes returning products more difficult?

As we know, returns will always be part of the process, but it’s up to retailers to ensure their returns process doesn’t alienate or frustrate consumers, otherwise they risk losing the customer permanently. The trick here is to transition from a cumbersome returns process to a customer-centric and easy experience. Furthermore, think beyond the single transaction with a view to the customer’s lifetime value in order to maximize value from every customer relationship. Here’s how:

Be There for Your Customers

Returns are a critical touchpoint in the customer journey. If executed well, this touchpoint can serve as an additional opportunity to provide personalized engagement and to truly “be there” for each customer, leading to future purchases and a sustained relationship.

The critical first step is understanding the reason for a return and working to create a customer-centric, streamlined returns process that accurately addresses customers’ needs and boosts future engagement. Once retailers understand their customers’ return needs, they can then move to develop an effective program focused specifically on returns. For example, creating additional incentives during the returns process — e.g., free "returns" if exchanged for equal value or including a coupon towards a future purchase during the returns process — can be a way to effectively engage your customers during their returns journey and create an opportunity to recover lost revenue.

Eliminate Returns Barriers by Improving Communication

Creating an environment in which customers can communicate 24/7 with retailers and brands through the preferred channel of their choice during every step of the returns process will help deliver the customer-centric returns experience that's critical to nurturing the relationship. According to Deloitte’s 2017 Holiday Survey, 44 percent of shoppers surveyed prior to the holidays answered that one of the list of perks they planned to take advantage of in the 2017 holiday season was “policies for easy returns.” To achieve an easier returns process, retailers should look to artificial intelligence-enabled communication channels such as chatbots (e.g., Facebook Messenger) or voice assistants (e.g., Amazon’s Echo and Google Home) so that customers can complete a return in less than one minute. These technologies can allow retailers to offer their customers real-time assistance during returns, making the process an easy and convenient experience.

Give Consumers What They Want (i.e., Choices)

As a consumer, we value retailers and brands that provide multiple product and fulfillment choices during our purchasing journey; the returns process should be no different. Offering customers multiple return options such as the ability to self-service returns 24/7, return online purchases in-store, get immediate service via automation, or get a pick up from their home, not only makes the entire process more convenient, but also provides a positive return journey by eliminating the friction that customers could experience with a phone- or email-based return.

View Returns as a Moment to Impress the Customer and Drive Revenue

Though once relegated to a strictly operational strategy, returns today represent a touchpoint with a customer that's highly engaging, and gives brands the chance to give the customer exactly what they want and leverage the moment to drive revenue. Though this may sound counterintuitive, converting a return to a purchase of another item isn't as difficult as it sounds. You must leverage order history-based product recommendations that suit the customer, and follow up with communication about the return that includes suggestions of what they want to shop for next.

Take Friction Out of Returns

Trying to slow returns is a little like plugging a dam with your finger. Though some retailers still see making returns difficult as a strategy to keeping their margins high, you have to ask yourself how long the finger in the dam will hold in the face of rapidly changing shopper expectations and behaviors. Spoiler: it won’t hold. Consumers will simply shop elsewhere if they find it difficult to purchase from or get service from a particular brand.

The nature of buying items online will always result in returns, and customers aren’t shy about swapping an item for something they would prefer. Instead of trying to stop returns altogether, retailers need to spend their energy embracing the natural behavior of returning as an opportunity to increase engagement and customer loyalty. Those that do will see greater purchase frequency and increased customer lifetime value.

Luke Starbuck is the vice president of marketing at Linc, a company that connects brands and shoppers through automated customer service.