Only about 10 percent of all holiday purchases are returned, but when it comes to online orders, that number can triple to 30 percent, according to the National Retail Federation. As etailers look cheerfully at surging sales from the fourth quarter, there’s still a question mark hanging over their heads about the costs they’ll incur from returns. For the first couple months of the year, it’s a line that weighs heavily on their balance sheets – and their minds.


An analysis from BI Intelligence found that the cost of return logistics can cut into annual profits by 10 to 20 percent. And with most of them coming back after the holidays, that’s a difficult way to start the new year.

But it doesn’t have to be this way. By implementing a returns strategy that’s tightly integrated with the overall brand experience, online retailers can actually drive profit from returns. And believe it or not, a good returns strategy will have an impact on the bottom line both pre- and post-purchase.

“By implementing a returns strategy that’s tightly integrated with the overall brand experience, online retailers can actually drive profit from returns.”

Here a few tips for realizing the potential upside of holiday returns.

  • Define a clear returns policy. It’s important to make sure your returns policy is clear, concise, specific and easy to find on your site. This is all about setting expectations – consumers want to feel comfortable clicking the “buy” button and know that they’ll be able to easily return something if they have to. If they have that level of comfort, they’re more likely to make a purchase in the first place.
  • Make returns convenient. There’s already a level of inconvenience associated with having to make a return, so make the process as easy as possible. Print-at-home labels are a great first step, and pre-paid labels are even better. Next, make sure your carrier has convenient drop-off locations, or better still, work with a carrier like the U.S. Postal Service that will pick up at any location.
  • Be consistent. This sounds like a no-brainer, but consistency can sometimes get lost in the shuffle between the many different customer touchpoints. It’s important to ensure that return policies and procedures are consistently conveyed in locations where consumers can easily find them.
  • Communicate. There are a few different areas where good communication is essential in an effective returns strategy. The first is being proactive about conveying transit times and movement of a package. This can save a lot of money by reducing call center volumes, but also leaves customers with a positive reflection of your brand. But on top of that, these types “transit triggers” are the perfect vehicle to market additional items or present promotional offers that will drive revenue.

Many of the tips above are tactical and practical ideas that retailers should strongly consider implementing. But it’s important to also recognize the intangible benefits of raising the overall brand experience in order to delight customers and keep customers coming back. Together, these things will turn around the negative outlook on returns and help you realize the upside.

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