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Why Do Shoppers Return Products? Best Cost-Saving Ways To Handle Returned Products After Holiday

Why Do Shoppers Return Products? Best Cost-Saving Ways To Handle Returned Products After Holiday

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Gone were the seasons for joy and laughter, and ‘tis the season of ... returns? As the holiday frenzy ensues, online merchants - brace yourself for the whirlwind of product returns!

But fear not, dear mighty retailers! In this article, we’ll unravel why online shoppers return their purchases and help you focus on the not-so-jolly part of your eCommerce business: tackling return shipping and even turning holiday returns into your small wins.

So grab a cup of joe, and let’s dive in!

2023 holiday selling season: consumers buy more but also return more

As expected, during the 2023 holiday season, online shoppers did their seasonal shopping more than ever!

  • Shoppers showed their willingness to spend by generating a record-breaking $9.8 billion online sales on Black Friday in the U.S.
  • Also, according to Adobe Analytics, online holiday sales during the recent Thanksgiving shopping weekend reached $38 billion, a 7.8% increase compared to the previous year.
  • On Cyber Monday, customers spent $12.4 billion, marking a 9.6% increase from 2022, as reported by Adobe.

Per a study by Zebra Technologies, shopper satisfaction has reached a commendable 85% for in-store and online experiences. However, shoppers have also become more selective when deciding what to keep from holiday shopping hauls.

This year, the estimated volume of returns has increased by 28% compared to the previous year. Data from Salesforce suggests that return rates are expected to surge up to 20% in the weeks following the holidays and into 2024 as individuals begin returning gifts.

Why do customers return products after holiday shopping?

reasons why customers return products

Source

Reason #1: The product didn’t fit

Let's face it, we've all been there - buying clothes online only to realize we got the wrong size. It happens more often in the apparel industry compared to others. But hey, even in different product categories, returns are something to remember. 

Your shoppers are also humans like you, who can be confident in their choices but sometimes end up making incorrect assumptions when purchasing something new. And when that happens, chances are they’ll want to send it back.

Reason #2: The product didn’t match your website’s information

Picture this: when people shop online, they're counting on you to give them the lowdown on your product. Shoppers rely on your descriptions and the photos you provide to make their decisions. 

So, if your descriptions are lacking or misleading, or your product photos are blurry or inadequate of necessary manufacturing information, it's like a one-way ticket to Returnsville

Reason #3: The product is a gift

This happens, too. During the holiday season, people will shop for presents and gifts. Chances are, the recipients sometimes want another item, so they will return it in exchange for another product. 

Now, here's the deal: these returns mostly come from customers who aren't your regulars. So, don't freak out when January rolls around and you start receiving holiday-gift-giving packages.

Reason #4: People shopped for a quick trend

Impulsive or pragmatic shopping for a hot trending item might as well be why your shoppers return a product.

Buying something on a whim makes it easier to feel regret later on. Your customers might start doubting their purchase and feeling anxious about it. And guess what? That feeling, known as buyer's remorse, often leads to returning the product

Reason #5: People bought with the intent to return

It turns out that 41% of consumers admit to buying multiple items with the intention of returning some of them. It's their way of dealing with the uncertainties of online shopping.

Some customers have a sneaky trick up their sleeves called "bracketing return fraud." They'll buy multiple versions of the same item, like different sizes, colors, or styles, fully planning to return the ones that don't fit or meet their needs.

It's like a shopping experiment. They'll buy from your store and your competitors just to compare and see what works best for them.

Why do you need to take good care of returns?

ecommerce return infographics

The total number of eCommerce returns in 2022 (Source)

Returns are a pain in the neck. They don't just result in lost sales but also bring a lot of headaches, losses, and costs. 

One major issue is that returned items often can't be sold again at the original price if they can be sold at all. It's a bummer all around.

So, while your shoppers might already be on their way to Valentine’s Day gift-hunting, you must prepare for the impact of January’s returns! A high return rate can pack a punch with several negative consequences, including:

  1. Reduced Profit Margins: Brace yourself for some financial blows. Each returned item means lost revenue for your store. High return rates can take a toll on your profit margins, leaving you with less dough.
  2. Increased Costs: Returns come with additional expenses like restocking fees, return shipping costs, and reduced inventory value. These costs can quickly stack up, denting your store's profitability.
  3. Decreased Customer Satisfaction: A high return rate can be a red flag for customer dissatisfaction. This could lead to negative reviews and a decline in customer loyalty.
  4. Increased Workload: Buckle up for some extra work. Processing returns can be a time-consuming task that requires additional resources. 

Best Cost-Saving Ways To Handle Returned Products After Holiday

Update your return policy before the peak selling season

Although this is a preventive tip, it is worth mentioning as this should always be included in your holiday selling strategy

🗒️ Did you know?

90% of retailers have given their return policies a makeover this year. 44% of retailers have bumped up their return and restocking fees, while 40% have gone the extra mile by introducing or expanding their return drop-off locations.

(Source)

It's a sign that retailers are shaking things up to adapt to the evolving eCommerce return landscape.

HM return policy

H&M expanded its policy of charging for online returns to more markets worldwide (Source)

Shorten your holiday return window

When it comes to return policies, retailers are making changes. 

Around 33% of retailers currently provide a seven-day return window, while 27% offer a more generous 14-day window. Another 28% give customers a whole month to make returns, and a small fraction, about 7%, offer an impressive 90-day return window, according to a survey by goTRG

During the holiday season, over 40% of retailers are planning to shorten their return windows. By doing this, retailers can streamline their operations and have a quicker turnaround on processing returns. 

It's a win-win situation that helps both the retailers and the customers. So prepare for some changes in return policies for your next holiday season strategy!

Launch a post-holiday sale

What goes around gets sold again!

When your brand is stuck with a pile of holiday gift returns, it's time to get strategic and avoid drowning in excess stock by putting returned items on sale.

Here's what you need to do: 

  1. Assess the Returns: Take a close look at the returned items and categorize them. Determine what can be resold, what needs refurbishment, and what needs to be written off as a loss. 
  2. Optimize Inventory: Use your return data to make smarter inventory decisions. Identify trends and patterns to understand which products are more likely to be returned and adjust your future inventory accordingly. 
  3. Implement Clearance Sales: Offer discounted prices or special promotions on returned items to quickly move them off the shelves and recoup some revenue. 
  4. Explore Partnerships: Partner with other retailers or online platforms to offload excess stock. This can help you reach a wider audience and reduce the burden of excess inventory. 

Encourage customers to exchange loyalty points or credits

Here's a smart move to prevent revenue from slipping away: incentivize consumers to accept exchanges or store credit instead of outright returns. 

By offering attractive incentives like added loyalty points, discounts, bonus items, or loyalty program rewards, you can encourage customers to choose exchanges or store credit options.

convert returns to credits

Resell your returns as second-hand products

Have you heard of reCommerce

❓ What is reCommerce?

reCommerce is all about buying or selling used items online at lower prices. It's like a second-hand marketplace where people can find great deals on pre-owned stuff. 

You might also hear it called "resale commerce." The cool thing is that reCommerce has taken the concept of selling used items out of traditional stores and brought it to the digital world of online marketplaces.

Online retailers have found a clever way to handle returns by selling them as used items at significantly better prices than clearance sales.

This approach offers several benefits: first, it helps swiftly move returned items off the shelves, reducing inventory costs. Second, it aligns with the brand's sustainability promise, enhancing its image by promoting the reuse and recycling of products.

💡 A good example of reCommerce for returns (usually mismatch, misfit items that are already “gently used”) is Allbirds. 

Allbirds has developed a nifty idea called Allbirds ReRun, where customers can trade in their used Allbirds shoes and get $20 of store credit in return. 

Considering Allbirds wool runners are priced at $98, it's a pretty sweet deal. But here's the cherry on top: the company will also sell slightly imperfect or gently used shoes on its website at lower prices. 

So, not only can customers get credit for trading in their shoes, but others can snag a pair of Allbirds at a discount. It's a win-win situation for sustainable fashion lovers and bargain hunters alike!

Allbirds rerun

Automate post-holiday returns

During peak return periods post-holidays, you can optimize your operations by automating the returns process, freeing up time to concentrate on more valuable tasks, such as creating personalized customer experiences or researching new products for the new season. 

By automating aspects like label generation, tracking, and refunds, you can streamline the returns process and ensure efficient handling of returns, allowing them to provide better service to their customers.

A good return automation tool such as Rich Returns will be a good choice for less hassle monitoring all post-holiday returns. With the Auto-Approve Shopify returns feature, this app enhances customer satisfaction and boosts your team's efficiency by implementing auto-approval for Shopify returns. 

Last but not least, protect your brand against fraud

During the holiday season, returns tend to increase, and unfortunately, some of those returns can be fraudulent. You just can’t completely prevent this.

However, you can protect your business from such fraudulent returns:

  1. Address serial returners: If customers consistently return products without valid reasons, you can consider blocking their email or payment cards from your systems. However, be cautious not to ban loyal customers with a high lifetime value mistakenly.
  2. Invest in fraud protection: Consider purchasing fraud protection services that can help safeguard your business against chargebacks. Many eCommerce platforms, such as Shopify with its Fraud Protect feature.
  3. Implement tracking numbers: Attach tracking numbers to every product you ship and encourage customers to sign for the packages upon delivery. This way, customers cannot falsely claim they never received their order.
  4. Request receipts: When customers request refunds, it's a good practice to ask them to provide receipts as proof of purchase. This allows you to cross-check and verify the authenticity of their claim.

Final words

While return rates may impact your profit margins, shifting your perspective and viewing them as opportunities to enhance the customer experience is important. Instead of solely focusing on the potential financial implications, consider the positive aspects that come with returns.

Author

Doki Nguyen
Shopify Growth Advocate
Doki loves digging into empowering businesses to achieve remarkable growth on the Shopify platform. While not working, she reads comics and plays with her cat.
Doki loves digging into empowering businesses to achieve remarkable growth on the Shopify platform. While not working, she reads comics and plays with her cat.