The 5 Commandments of an E-Commerce Return Policy

E-commerce is hot. In fact, U.S. consumers spent a total of $861 billion online in 2020 alone, which was a 44 percent increase from the year prior. However, this also meant that returns from those e-commerce purchases rose 70 percent year-over-year (YoY) in 2020. Which begs the question: How different is the e-commerce return rate vs. the return rate for brick-and-mortar stores?

CBRE shared a forecast in December 2020 claiming that brick-and-mortar store return rates fall somewhere between 8 percent to 10 percent, while e-commerce return rates land around 30 percent. Needless to say, if a brand’s e-commerce return rate is anywhere around 30 percent they’re doing something right.

For brands whose e-commerce return rate is above 30 percent, there's no need to throw in the towel quite yet. Below are five important yet simple tips companies can take when creating or adapting their return policy in hopes of lowering their average annual return rate:

1. Make sure your return policy is easy to find.

Consumers shouldn’t have to go on a treasure hunt to find your return policy. Display it on your website by highlighting it on the main menu. When consumers know they’re buying from a company that provides clear return options, they'll feel more confident making a purchase.

When creating the return policy, keep your company’s brand in mind. Don’t make it generic or impersonal. A policy should be unique and include a variety of testimonials that stress the company’s commitment to supporting customers throughout the entire e-commerce journey.

2. Set clear expectations: what, when and where.

A good return policy will have the big three: what, when and where. What will the customer be receiving for the exchange? This might be in-store credit, money back on their card, or an outright exchange. Next, what time frame will they need to make the return? This should be crystal clear to prevent customer frustration. Lastly, where does one go to start this process? Outlining the specific steps is vital for customer satisfaction.

3. Make your return policy an extension of your customer service.

If your policy is rigid and includes harsh language that intimidates, a consumer will be less inclined to buy from your brand. Carefully evaluate your current policy and determine what language needs to be adapted. In terms of cadence, overcommunication is key. Provide customers with consistent follow-ups via email or SMS to keep them in the loop throughout each step of the return process.

4. If it doesn’t make sense to your employees, scrap it and realign.

No shortcuts about it. Employees processing returns must be well-versed in all aspects of your policy. If they know it inside out, they can prevent confusion and make the entire experience more comfortable for the customer. Done well, this can help retain customers and earn their loyalty.

5. Design your return policy to be agile.

One thing the global pandemic has taught retailers is that when the going gets tough, agility is paramount. With shipping delays, low inventory, backlogs, and staffing shortages, returns can be extremely tricky. If circumstances arise that require your company to change its return policy, do so quickly, as it will reassure your customers.

At the end of the day, striving to attain an e-commerce return rate of 30 percent or lower is a great goal to achieve. These five recommendations are the perfect jumping off point for making strides towards that goal. As online shopping continues to skyrocket, utilizing these guidelines to craft a unique and personalized e-commerce return policy will be extremely important for the success of every retail brand.

Shelley Schmidtlin is the director of enterprise marketing at CleverTap, a user engagement and retention platform.