The returns process can be complex and even introduce friction to the buyer journey, which can cut into profitability. But businesses that embrace returns can turn them into an opportunity to delight customers, improve their product offering, and increase customer lifetime value.
Having a proper system for handling returns is key, since these requests can take up a lot of time and money, with hours spent on customer service emails and calls. To transform returns into an advantage, you need to have the right return management process in place.
Shopify’s built-in tools can help you design a returns management process that’s simple, reliable, and focused on your customers’ needs.
What is returns management?
Returns management is the process of managing the flow of returns between customers and businesses. This involves connecting with customers, managing returned orders, receiving the returned products, dealing with returned inventory, and more. Many parts of the retail supply chain are impacted by returns, such as warehousing, inventory management, and profitability.
Why is returns management important for your business?
Returns have become an integral part of business operations, especially for ecommerce stores. The returns experience a retailer provides can strongly influence a customer's likelihood of buying from that store again.
In a world of rising costs, retaining customers is more important than ever. You can spend five times as much on attracting new customers versus keeping existing ones. This is why it’s important to invest in the returns experience—you can retain more customers, improve loyalty, and increase customer lifetime value.
What are the benefits of managing returns on Shopify?
With Shopify, you can manage returns and refunds, pinpoint common reasons customers return products, and improve your product assortment, all from one powerful back office.
Manage your returns and refunds in one place
The first step is making sure you have return management functionality in place to help you handle all returns and refunds seamlessly in your store.
Shopify’s return management solution can help you improve the post-purchase experience for your business and your customers. These free, built-in tools are at your disposal:
- Centralized returns: Create manual returns and manage buyer-initiated returns from your sales channels, in one central place.
- Exchange management: Create, track and manage exchanges all within your Shopify admin, helping you retain more revenue.
- Automated notifications: Keep your customers up-to-date with fully customizable email notifications sent automatically throughout the return process.
- Return fees: Set up, track and report on fees associated with returns, such as restocking or return shipping fees, helping you minimize the impact on your bottom line and refine your return policies.
- Return shipping labels: If you’re in the US, use Shopify Shipping to email a return shipping label to your customer, as soon as the return request is created. You can even generate return labels and include them in the box at time of fulfillment. Merchants who use Shopify Shipping also benefit from discounts with carriers for both outbound and return shipping. Return labels are “pay on scan,” which means they are only charged once they’ve been used. If you’re in a region that doesn’t support Shopify Shipping labels, you can upload your own label and email it to your customers. You can also generate return labels with our very own 3PL, Shopify Fulfillment Network.
- Restock inventory: You can track the return from your customer, restock the returned inventory, and make it available for sale again on your online store.
- Refund the customer: Once the product is returned, you can refund the customer to their original payment method with the click of a button.
Make returns easy for your customers
Shopify’s self-serve returns let customers initiate returns whenever it’s most convenient for them, without the hassle of contacting a representative over the phone or email.
With Shopify’s self-serve returns, your customers can:
- Easily manage and initiate returns from their customer accounts page
- View a convenient list of all their orders in one place
- Choose the products they want to return from the order
- Share a reason for returning the products
- Keep track of the returns process
Transforming the returns process into a consistent and hassle-free experience can help your business in multiple ways:
- Reduce friction: Easy and customer-centric returns make for a smoother customer experience.
- Improve buyer trust: Buyers are more likely to purchase from an unknown brand when the returns process is easy and clearly communicated.
- Better visibility of incoming products: Track what your customers are sending back ahead of time.
- Reduce customer support cost and time: Your business can save significantly on support costs, and you can use their time for the more complicated requests that genuinely need live support.
- Build customer loyalty: 92% of consumers said they’d buy from a business again if returns were easy. When a customer has a simple, positive returns experience with your brand, they’re more likely to come back for another purchase.
One great example comes from Phenom Boxing, a high-quality boxing and coaching gear store. It streamlined its returns experience with Shopify’s self-serve returns by allowing its customers to initiate returns without the hassle of filling in details by email or contact forms. With this solution, it’s able to provide its customers visibility of the return’s status, from beginning to end.
Shopify's customer self-serve returns save me so much time. I no longer need to respond to requests via email and ask for missing order details. I also have visibility into all open returns at various stages.
Retain more revenue and streamline returns management with exchanges
You can create, manage, and track product exchanges all within Shopify, empowering you to optimize revenue retention while efficiently handling returns.
This capability allows you to:
- Effortlessly create exchanges: With just a few clicks, you can initiate an exchange, select the replacement product, and automatically notify your buyer at every step. This streamlined process saves you valuable time and resources, allowing you to focus on your business growth.
- Manage and track exchanges from one place: Gain full visibility into the status of each exchange and manage them efficiently, all from your Shopify admin. This centralized approach allows you to stay organized, monitor progress, and a better customer experience throughout the exchange process.
- Provide flexible options for customers post-purchase: You can offer exchanges across your full product catalog. Whether it's a net zero, net refundable, or net payable scenario, Shopify provides the flexibility you need during the returns experience.
- Seamlessly manage inventory: Restock products back into your Shopify inventory effortlessly when needed. This ensures that your stock levels remain accurate and up-to-date, preventing any discrepancies or delays in fulfilling future orders.
Improve efficiency and customer satisfaction with return rules
If you are offering self-serve returns, it's a great idea to set up return rules to avoid receiving return requests on ineligible items, saving you valuable time and improving the customer experience.
With return rules you can:
- Define a custom return window: Specify a custom return window in addition to selecting from a list of common return windows, giving you greater control over your returns process.
- Set final sale items: Easily mark specific products or collections as final sale, meaning customers cannot request a return with these items.
- Define your return shipping strategy: You have the flexibility to offer free shipping, charge a flat shipping rate, or have the customer pay for shipping.
- Set a restocking fee: Set a restocking fee as a percentage of the item's price. This allows you to recover some of the costs associated with processing returns.
An estimated refund amount for eligible items will also display during the self-serve returns process, promoting transparency and helping you build trust with your customers.
Create customer-friendly return policies
A return policy is a set of rules to help you manage how customers can return products they’ve purchased from your store. Return policies tell customers how they can initiate returns, what items can be returned and for what reasons, and the time frame over which returns are accepted.
It’s important your policy is clear, helpful, and honest, so you set the right expectations from the get-go. Return policies not only assist you in quickly handling returns, but they also encourage customers to make informed purchasing decisions.
Make it easy to find! Sixty-seven percent of customers often check out your return policy before making their first purchase. You also want to make sure the policy is easily accessible in your site by adding it to the footer and even your product pages.
Learn from your returns
Use returns data to improve your business. Analyzing your returns can tell you a lot about your customers' buying habits and what they think about your product. Data can also help you optimize your assortment offering and pinpoint issues, like product defects, early on.
A great way to get started is by collecting return reasons and reviewing them often. Feedback from shoppers is a critical component of success in ecommerce. Compare these reasons with Shopify’s return report to help you identify your most returned products.
Manage your returns and refunds with ease from Shopify
Implementing simple changes to make your returns management process more efficient can help you delight your customers and improve their trust with your brand. The returns experience should get as much attention as all the other parts of the buyer journey, and getting it right can set you apart from competitors.