Last year, UPS delivered 1.4 million packages back to retailers on January 3rd, also known as “National Returns Day.” Brick and mortar retailers see about 8 percent of all purchases returned. For ecommerce sellers, that number swells to 30 percent of all purchases. Online apparel purchases are returned at a rate of nearly 40 percent. Holiday return rates can be even higher.
According to Shopify, return deliveries are estimated to cost retailers an eye-popping $550 billion by 2020. Ecommerce returns are growing even faster, increasing 94.8% over the most recently measured five-year period.
Why Are Online Return Rates So High?
When people buy in-store, they can see the true colors of products, feel the material and quality, and try on the fit of each item. When customers buy online, it’s harder to guess accurate fits and product photos can be misleading.
The same Shopify study shows:
- 41% of online shoppers buy multiple sizes or variations with the intent of returning
- 77% of returns come from repeat customers
- 89% of shoppers have returned an online purchase
How to Cut Down Online Return Rates
Some retailers opt for strict return policies. But, studies show that not having an accommodating return policy can drastically reduce your sales. 67 percent of customers check the return policy before making a purchase. 58 percent of shoppers want a no-questions-asked return policy or they won’t make a purchase.
Instead of making it harder to return products, and potentially sacrificing sales, many retailers are making it easier for customers to make better-informed purchasing decisions. This year, Amazon debuted a try-before-you-buy (TBYB) program called Prime Wardrobe where shoppers order apparel and accessories and have seven days to decide what they want to keep and send the other product back. Then, customers are just billed for the products they keep.
Retailers that have both an online store and physical location are taking advantage of Buy Online, Pickup In-Store (BOPIS) strategies. This lets the customer see products in-person before bringing them home. While this strategy won’t necessarily prevent returns, if customers return the items to the counter or dressing room before they leave the store, retailers will at least get the items back in a saleable condition.
Other ecommerce brands are using more sophisticated fitting guides so shoppers can select their correct size with more accuracy and confidence such as Fit Finder, True Fit, and Fit Freedom. Some of these personalized fitting tools ask customers to enter size information and measurements, then ask them what sizes they wear from a number of national brands. The guide will then recommend a size for that specific ecommerce brand based on all of the information. Other newer tools, like Fit Freedom use augmented reality to take a full body scan of the customer to create a 3D “fit model”.
An even simpler solution that can help customers make better informed purchasing decisions is having diverse product photos and detailed product descriptions. Show products from all angles and include measurements. If you sell apparel, have models showcase a variety of clothing sizes. Ecommerce sellers of every size can help reduce their return rates by using any one of these strategies to help customers make informed purchasing decisions.