The State of E-Commerce Returns in 2023

As ecommerce continues to grow, so does the number of returns made by customers.

The State Of E-Commerce Returns In 2023

As ecommerce continues to grow, so does the number of returns made by customers. Understanding the state of ecommerce returns is crucial for any business looking to maximize profits and minimize losses. In this blog post, we will explore some interesting statistics about ecommerce returns and provide tips for handling them efficiently and effectively.

The State of Ecommerce Returns

Ecommerce returns are a major cost for online retailers, with an estimated $550 billion spent on return deliveries in 2020 alone. This statistic is a stark reminder of the immense financial burden that ecommerce return deliveries are placing on businesses in the United States. Clothing has the highest return rate among all ecommerce verticals, with over 56% of total returns. Other industries have average rates between 20-30%.

Consumers often consider a retailer’s return policy before making purchases, as 92% will buy something again if it is easy to do so. Furthermore, 41% of shoppers purchase items with the intent to return some or all of them – up to 10% according to one statistic – and 67% are considered “serial returners.” Free and easy returns can increase sales by 357%, but 27% abandon carts when they find that process unclear or complicated.

Looking ahead to 2023, ecommerce returns are expected to rise even futher, with most experts predicting that returns will double this year and beyond. This trend is expected to continue, with return volumes remaining higher than pre-pandemic levels through at least 2026. Retail and e-commerce return volume combined is forecasted to reach $627.34 billion 2023, accounting for 8.5% of overall sales for the year.

One of the major reasons for e-commerce returns is the disparity between the actual product and the images or descriptions provided in the online catalogues. In fact, around 65% of the time, it is the merchants who are responsible for the returns, not the customers. Some key reasons for product returns from e-commerce websites include a disparity between the displayed and delivered product, delivery of wrong merchandise, and products failing to match expectations.

The average ecommerce return rate hovers around 20-30%, depending on the industry. Clothing has the highest return rate among all ecommerce and retail verticals, with over 56% of total returns, as customers often struggle to find the correct size and measurements. Providing proper measurements and sizing charts can help reduce the rate of e-commerce returns for these products. To minimize the risk of returns, e-commerce businesses can implement strategies such as providing comprehensive product descriptions, clear product images, and angle-views to give customers a better understanding of the product.

Ecommerce Returns: A Pain or Advantage?

commerce returns are an inevitable aspect of running an online business, but they can also serve as a valuable opportunity to increase the Customer Lifetime Value (CLV). By implementing effective return strategies and policies, businesses can turn this seemingly negative aspect into a positive driver for customer retention and loyalty.

One way to improve CLV is by providing high-quality images and descriptions for their products, implementing size guides and fitting tools, encouraging customer reviews, and ensuring accurate order fulfillment. These measures can help reduce the likelihood of returns and improve overall customer satisfaction. A well-crafted return policy can also contribute to increased customer trust and loyalty. By offering a clear and fair return policy, businesses can encourage consumers to make purchases with confidence, knowing that they have the option to return items if necessary. This can lead to higher sales and attract new customers.

Typical return policies for ecommerce businesses range from 15 to 90 days, with 30 days being the most common timeframe. It is crucial for businesses to establish a clear and easily accessible return policy to manage customer expectations effectively. Having a good return policy can also provide valuable insights into product improvements, sizing corrections, and website adjustments. Returns data can be analyzed to identify trends and patterns, which can then be used to optimize the shopping experience and reduce future return rates.

How to Handle Ecommerce Returns

Handling ecommerce returns efficiently and effectively can be a challenge, but there are several tips and strategies that businesses can use to make the process smoother. Here are some ideas:

Send returns back to the warehouse for processing and restocking

Sending returned products directly to the warehouse, businesses can quickly assess the condition of the items and determine whether they can be restocked or need to be repaired, refurbished, or recycled. This helps to minimize losses and ensures that undamaged items are promptly made available for sale again.

Offer in-store returns for online purchases

Allowing customers to return their online purchases at physical store locations can simplify the return process and improve customer satisfaction. This option not only saves customers the hassle of shipping the item back but also provides an opportunity for businesses to engage with customers in person and potentially upsell or cross-sell other products.

Use a third-party fulfillment service to handle returns

Partnering with a third-party logistics (3PL) provider can help businesses manage and process returned items more efficiently. 3PLs have the expertise and resources to handle returns, which can lower costs, increase visibility into the return process, and ultimately improve customer satisfaction.

Provide clear and concise return policies that are easy to find on your website

A well-defined return policy that is prominently displayed on your website can help set customer expectations and reduce confusion. Make sure your policy is written in simple language, outlines the steps customers need to take to initiate a return, and specifies any conditions or restrictions that may apply.

Offer free returns to reduce cart abandonment rates

Online shoppers are more likely to complete a purchase if they know that returning an item will be hassle-free and cost-effective. Offering free returns can encourage customers to buy with confidence, knowing that they can easily return the product if it doesn’t meet their expectations. This can lead to higher conversion rates and increased customer loyalty.

Proactively reach out to customers with high return rates to identify potential issues and offer solutions

Monitoring return rates can help businesses identify trends and address any underlying issues that may be causing dissatisfaction. By proactively reaching out to customers who frequently return items, businesses can gather valuable feedback, identify areas for improvement, and offer personalized solutions to enhance the customer experience.

Implementing these strategies, businesses can streamline their ecommerce return process, reduce costs, and ultimately improve customer satisfaction. A well-managed return process not only helps retain existing customers but also attracts new ones, contributing to the overall success of the business.

The Future of Ecommerce Returns for Retailers

Ecommerce returns are a major challenge for businesses operating in the online space. However, they are also an opportunity to build customer loyalty and increase profits. By understanding the state of ecommerce returns, analyzing return rates by industry, and implementing effective returns strategies, businesses can stay ahead of the curve and maximize their success.

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