How to Manage Returns in Your Ecommerce Business?

• Ecommerce returns equated to 17.6% in 2023. However, sellers can reduce the number of returns and improve their handling of them in many ways.
• Orderback is a self-service customer portal that enables customers to exchange products easily and automates the returns process, improving customer satisfaction.

If you run an ecommerce business, you must be prepared for returns. Although we can take steps to reduce their occurrence, customers will always return products.

Many ways exist to simplify the returns process, increase customer satisfaction, and reduce friction in your returns workflow. In this article, we’ll examine the ecommerce return rate and provide tips for handling returns, reducing their occurrence, and making them easier to deal with. We’ll also explain what returns management software is.

What Is the Return Rate for Ecommerce?

According to a report by the National Retail Federation, “As a percentage of sales, the total return rate for 2023 was 14.5%.” This means that “for every $1 billion in sales, the average retailer incurs $145 million in merchandise returns.”

However, for ecommerce retailers in particular, the rate is much higher. The report continues: “Online sales do see a higher return rate, with 17.6% or $247 billion of merchandise purchased online returned. That compares to 10.02% for pure brick-and-mortar returns (excluding online orders that are returned in-store), or $371 billion.”

Interestingly, according to a Shopify blog post, the average return rate for ecommerce is between 20% and 30%.

What Is a Good Ecommerce Return Rate?

A good ecommerce returns rate depends on the products you sell. Different ecommerce businesses will experience different return rates. For example, according to Statista data, when asked about their most returned online purchases by category, 24% of US respondents said ‘clothing.’

Other significant categories include consumer electronics (11%), furniture and household goods (11%), toys and baby products (11%), and books, movies, music & games (10%).

How Are Returns and Refunds Handled? Top 10 Tips

1. Start with a Robust Returns Policy

Think of every possible scenario and how it could fit into your policy based on the category of products you sell.

Examples of considerations:

• What is your return window?
• What condition should the products be in?
• Are there certain products that customers cannot return?
• Product cost considerations for low-value items.

Looking to learn more about creating a solid returns policy? Check out: 12 Considerations When Creating Your Perfect Ecommerce Return Policy.

2. Have a Process for Handling Received Returns

You just received a return; now what? Evaluate the quality of the returned product and ensure a process to grade returns and re-list them efficiently.

3. Speed up Return Handling Times

Returns should be quick. The longer customers wait for a refund, the more frustrated they will become. Look for ways to improve the efficiency of your returns process.

4. Offer Exchanges

One clever way to reduce refunds is to offer exchanges. This keeps customers happy, retains revenue, and avoids costs associated with processing returns.

5. Offer Flexible RMAs

Simplicity is key. Allowing customers to easily obtain RMAs can enhance their shopping experience and encourage repeat business.

6. Customer Communication

Clear and gracious communication is essential when handling returns to avoid escalating frustrations.

7. Use Serial Numbers to Check for Fraud

Ensure you can trace products back to the original purchase to prevent fraudulent returns.

8. Consider Using a Fulfillment Center

Fulfillment centers can manage warehouse and shipping tasks, freeing up your time but might increase costs due to associated fees.

9. Improve Product Descriptions

Detailed product descriptions can reduce the likelihood of returns by providing adequate information.

10. Periodically Analyze Your Returns Data and Listen to Feedback

Study your returns data to understand trends and address issues that may lead to higher return rates.

What Is Returns Management Software?

Returns management software helps automate the returns process, allowing customers to request shipping labels through a dedicated self-service portal. This can save time and resources for both customers and sellers.

Automate Your Returns Management Workflow with Orderback’s Self-Service Customer Portal

Orderback helps sellers automate every aspect of their returns management workflow, allowing customization to fit their brand and services offered, such as exchanges and defined returns windows.

Key Points

You are now equipped with insights to improve ecommerce returns management. Remember these key takeaways:

• The ecommerce return rate was 17.6% in 2023, with significant variations across product categories.
• Having a solid returns policy, offering flexible RMAs, and improving product descriptions are best practices.