Online Product Returns Policy – What to Know

The ecommerce world is ripe with competition. Millions of e-retailers are competing for their share of pie, making it tough to meet the ante tit for tat. Even in an industry that is as competitive as this, there are ways that you can make your store stand out from the rest of the pack.

Consumers like doing business with online stores that make returns easy, simple and free. One proven way to make your store stand out is by assuring that your online product returns policy is hassle-free.

But how can a no-questions-asked returns policy with free return shipping and no restocking fees help increase your conversions and reduce shopping cart abandonment?

Influences 80% of Online Sales

A recent study that was conducted by comScore, called “2014 Pulse of the Online Shopper™,” found some surprising facts. The online product returns policy that’s offered by an e-retailer influences as much as 80% of the sale.

According to the study’s findings, when hassle-free, no-cost returns are offered that don’t require a restocking fee or return shipping fee, consumers are as much as 82% likelier to close the sale. In addition, the study also found that 61% of consumers actually read the online product returns policy before they buy a product.

Shoppers Want Hassle-Free Returns

It’s not just the recent studies that demonstrate how your online product returns policy factor into sales. In 2008, Forrester created a study on behalf of UPS. It found that 81% of consumers would not be interested in making a purchase if the returns policy in place was not hassle-free. What’s more, the study also concluded that consumers were loyalists to the e-retailers that featured no-questions-asked returns.

Big Spenders Make More Returns

All in all, concurrent studies show that one-third of all products that are ordered online will be returned by consumers. While many online retailers would view these returns as a pain-point for their bottom line, such as actually not the case.

This is for two reasons.

Firstly, the customers who will initiate the most returns are usually your most loyal shoppers. These are customers you want shopping at your store because their conversion average is the healthiest.

Secondly, when customers do place a return, you can offer them a value-added option. For instance, you can give them a 10% increase with in-store credit, on the value of the return, to encourage a future shopping trip. You can also offer them a special deal to win over their business again. And you have a chance to reconnect with a consumer and engage your brand in a positive light.

Most Returns are the Retailer’s Fault

Another thing that you should be aware with online product returns is that they are not usually the fault of your customers. In fact, in most instances, they are the direct result of the online store.

In recent studies it was found that:

    • 23% of returns are due to the wrong item being shipped.
    • 22% of returns are due to the difference in product appearance.
    • 20% of returns are due to a damaged item being received.

Another related factor should also apply. In 55% of all cases, shoppers have stated that they do not want to pay any restocking fees. They also have voiced the fact that they want online product returns to be simple, fast and convenient to make.

Easy Returns = More Profits

A common concern about offering free online product returns is the cost. Most e-retailers are worried about the cost of shipping to begin with, much less offering free return shipping on products that are being sent back. But a hassle-free online product returns policy can actually improve your revenue stream.

According to a CNBC report, free returns actually make you a lot of money over the course of just two years. The report covers a study that followed two large online retailers over more than 40 months. Both started offering hassle-free returns with free return shipping. The average spending by consumers increased by $620 at one store and by a whopping $2,500 at the other.

Making a Winning Return Policy

Creating an effective online product returns policy that caters to consumers is a lot simpler than you think. A wise method is to base it off the information that has just been revealed to you. Since we know that most consumers want hassle-free returns, and that offering these returns actually improves profits and attracts more sales, you can bet that featuring this in your returns policy is a solid approach.

Also, considering that most returns are not the consumer’s fault, and that one-third of products will be returned anyways, you’ll want to base your returns policy on retention and conversions, as opposed to fretting over the immediate cost.

  • Base your online product returns policy on consumer engagement and with improving loyalty.
  • Offer free return shipping with no restocking fees. Realize that doing so is actually a smart marketing move that improves loyalty, attracts more sales and reduces shopping cart abandonment.
  • Make sure you clearly state what your online product returns policy is. Place this in plain view with an easily accessed link available on your header. Make sure that shoppers aware that this is an integral aspect of your unique value proposition.
  • Integrate online product returns software so that you can better manage, predict and project your returns while bringing synergy and logistics to this process.


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