Strategies for preventing returns – testing will pay off

Many shop operators have come to accept returns as a “necessary evil”. However, it can actually be worthwhile to combat a high return rate proactively. Because there are new services and features coming onto the market all the time aimed at alleviating the problem.

You should be aware of these strategies.

There is no such thing as an average return rate in online trading. Returns just depend too much on the type of product to be able to make a general statement. While the return rate is around 15 per cent in the case of technical items, returns can easily exceed the 50 per cent mark in the fashion business, explains Dieter Urbanke, CEO of Hermes Fulfilment GmbH.

Especially in the fashion trade, shop operators have always been up against “selection orders”. These involve the customer deliberately ordering an item in different sizes and colours. The customer keeps the item which fits them or which they like and the other items are sent back to the trader as returns.

Of course the shop operator incurs additional costs for the return shipment and for inspecting, refurbishing and placing the goods back into stock. It may therefore definitely pay to deal with so-called serial returners in a proactive manner and try to exert some positive influence on their returning behaviour.

Obviously, shop operators might also find that the causes of a high return rate are closer to home. For instance when packing errors are made, when product images are unrealistic, or when the staff are inefficient in cleaning up addresses.

Traders have tested various strategies to reduce the return rate. It is up to each shop operator to test whether and to what degree any such measure is effective. There are a great number of measures for preventing returns that a shop operator should be aware of. We have put together a list of the most important strategies based amongst other things on the book “Versandhandelsmanagement” (Distance Selling Management) by Dr Jan Thieme:

Customer-focused measures

• Addressing “serial returners” by telephone or in writing with comments on return behaviour (e.g. reference to size charts, virtual fitting room or body scanner).
• As a follow-up measure, if required, refusal to deliver or selective deliveries to serial returners with a negative profit margin.
• Deactivation of serial returners with a negative profit margin, no more newsletters, no more catalogues, etc.

Product-focused measures

• Improvement of quality control regarding efficiency, fit, etc.
• Inspection of suppliers or of specific delivery batches
• Removal of items from product range
• Provision of replacement items to avoid further returns

Communication-focused measures

• Check whether displayed images of goods are too unrealistic
• Improvement of operating instructions
• Use of size charts, fitting guidelines, virtual dummies or body scanners
• Review of returns information (are the options for cancellation/return highlighted too strongly?)
• Monitoring of agent behaviour in the call centre

Fulfilment-focused measures

• Quality management and research into error causes in the picking & packing department in the case of packing errors
• Optimisation of packaging
• Selection of a delivery service provider who offers flexible delivery scheduling with multiple delivery attempts
• Review of processes involved in address cleanup
• Complete deliveries
• Prompt deliveries (the later the delivery, the higher the likelihood of returns)

Measures focused on material requirements planning

• Better goods availability reduces returns

Confidence-boosting measures

Their purpose is to evoke a positive emotion in the customer when he or she takes hold of the goods:

• Welcome gifts for new customers
• Surprise gifts
• Renewed confirmation of reliability through use of a seal of approval logo on a parcel insert, the exterior of the packaging or the paperwork (invoice, delivery note, etc.)