Returns.
It is important to check for any distance selling regulations and returns policies for your specific country, and to detail them on your website. In the UK there is a 7-Day Distance Selling Regulation called the ‘Consumer Protection (Distance Selling) Regulations 2000’. This means a customer can return a product within 7 days, if bought online or by mail order. This is called a cooling-off period and must be detailed on your website—usually in the help or customer support section. Many online retailers or customers are not aware of such return policies.
Money Back Guarantees.
In addition to this standard 7–day policy, I always give at least a 30–day or more Money Back Guarantee for one simple reason; it removes the perceived risk from your customer’s purchase and builds trust, resulting in more sales. You may not have to give as much as 30 Days or more. Try 7 days, 14 days, 21 days, etc, and test the returns/refunds percentage. However, highlight the guarantee that you give on your website to build immediate trust.
In many tests offering and advertising an explicit ‘No Risk Money Back Guarantee’ suggests the risk is removed from your customers’ buying decision, and more sales are made as a result. Refund rates will be different for each product, customer type, market, business positioning, website, sales and quality of after sales support you provide.
Reduce Returns.
Offer and honor your returns guarantee. However, you do not have to make it too easy to return goods; how you do this is entirely up to you. For example, I would advise against displaying your returns address on your website. This would make returning goods too easy, and your systems would not be able to track returns efficiently.
Moreover, this is not for anything other than to ensure that a customer wishes to return the product for the correct reasons. I say this as many customers struggle with the most simplest of products or procedures; be it set up problems, operation or technical issues, looks too complex, didn’t work, I can’t install it, install costs too much, etc. So help them out with their product issues and your returns rate will plummet.
Returns Process.
My websites have a returns process in place giving the customer every reason to keep their product. I say this because they really want to keep the product. The process goes like this. A customer raises a returns request—through the ‘returns’ link inside of their user account. They are then presented with a returns email ‘confirmation page’, on this website page it explains; why they shouldn’t return the product just yet, what the top five technical issues are and how these can easily be resolved, where to find PDF manuals to download and where to find help guides and help videos in the support center pages. In addition, an email is automatically sent to them, with the same information.
You can track your returns in the back-end site admin area, or by spreadsheet, and a returns rate percentage should be determined, on a monthly basis at least. My average returns rate across multiple websites was 2.7%, and the internet average for physical products I believe is 5–10% plus. When you establish your returns rate, you can then hone and refine your returns process to get it reduced by any means possible.
Suspected Faulty Products.
There are various ways you can handle this. You firstly need to establish if the products you have sent are indeed faulty. The majority will not be. So using the ideas above ensure your customer goes through your problem resolution process, has access to help guides, installation guides, Troubleshooting and Fault Diagnosis guides and videos where possible. In addition phone them up if required.
My employees or I often phoned customers up directly to establish the reason for return and to help sort the problem out fast. Do not be afraid to speak with customers. Often a quick call can sort a problem in minutes—this will result in them cancelling their return request and profits from the sale remain in your bank account.
Replacement Product for Testing.
Depending on what products you sell, sometimes you will need to send out a replacement product or perhaps just an individual part only. In such a scenario, you can do one of two things.
Option 1: Send the replacement product or part in good faith at no cost to the customer.
- Here you need to stipulate what to do if the product is in fact faulty and how and where to return it—to you or to your supplier.
- Stipulate a return by date for either the faulty product or the replacement.
- You need to detail that if the faulty or replacement is not returned within X days (mine was 30 days) you will bill their card accordingly.
- They must return the faulty or replacement product to you using a tracking number for their protection to insure against loss or damage. You could even send them a pre-addressed padded envelope bag, etc. I did in some cases. But If it has a big box, don’t bother.
Option 2: Send the replacement product or part and bill the customer.
- Stipulate that upon receipt of the faulty or replacement product you will refund them in full.
- Stipulate a return by date for either the faulty product or the replacement.
- They must return the faulty or replacement product to you using a tracking number for their protection to insure against loss or damage. As in Option 1, you could even send them a pre-addressed padded envelope bag, etc. depending on the type of product and its original packaging.
Collecting Products.
If you wish, you can offer free returns like many catalogue and clothing websites offer. Just make sure to factor this into your prices and evaluate how much it costs you in returns employees and software to handle this—as you will definitely get more returns as a result. You could even offer a collection service for customers, be it free, or at a cost to the customer. This will definitely give you a Unique Selling Proposition (USP) but will also cost you time, money and employees to operate smoothly!
Repeat Return Offenders.
The need to reduce returns is important to reach higher profits. Typically, 80% of your returns will come from 20% of your products. So establish if specific products are breaking down and if they are, consider dropping them from your range if they are serial return offenders. Then investigate further to see if you are getting returns because your customer support is poor, for example. Are your emails excessively slow in response? Do you ignore the phone for long periods of the day, with the result that your customer’s trust has waned? Do you need to include more install and technical manuals or PDF’s in the box or on website as support? All are important areas to look at.
RAM Number.
A Returns Authorization Number is generated by your ecommerce software returns module, and is your way of tracking customers’ returned products. If your product range does not a have high returns rate, this system may be unnecessary. Many return requests can be reversed by phoning customers to assist them—as mentioned above—in addition to advertising on your website that a RAM number is a mandatory requirement before they can send the item back to you. This is because to get this number they must follow a ‘step-by-step’ returns protocol exactly. This gives you the chance to assess, address and reverse their request for a return.
