Mastering e-commerce returns: Strategies for reverse logistics

As an e-commerce merchant, a smooth and hassle-free returns process helps you enhance customer satisfaction and build lasting relationships, encouraging shoppers to return in the long-term. In this guide, we’ll explain the benefits of developing a clear returns policy, and explore some strategies you can adopt to optimize the returns process for both you and your customers.

Returns are a natural part of the e-commerce journey, and managing them effectively can play a significant part in your business's success. As the e-commerce market continues to grow, so does the volume of returns. By 2029, the reverse logistics market is projected to reach €865 billion ($954 billion), so efficient returns management is becoming a more and more important part of any e-commerce business:

By adopting some simple strategies, you can streamline parcel returns, reduce costs, and enhance customer satisfaction - turning your returns process into a positive experience for both you and your customers:

• Keep it simple: Make sure your online store displays your returns policy in a clear and customer-friendly way, with clear instructions for the process. If you need to provide legal protection clauses, link to these in your simple overview and display the detail elsewhere, so you are still covered.
• Give a clear timeframe: Specify a window for customers to receive their refund or exchange (such as 30 days) to avoid confusion and manage expectations. You can make this a number that suits your business - it’s less about the length of time and more about making sure your customers know what to expect.
• Customers appreciate pre-paid shipping labels: They help streamline the returns process for both you and your customer. You could also consider label-free returns that let shoppers scan a QR code at drop-off.
• Allow your customers to process their returns themselves: A Self-Service returns portal allows customers to manage their returns independently, reducing effort for both parties. If you don’t have this option in your store software, you could use the built-in functionality provided by eConnect from DHL eCommerce.
• Gather insights: Requesting a reason for the return can help you identify any issues with a particular product, or could highlight insufficient product information on your site. It could even provide insight into issues in the delivery or packaging used to ship your goods –our 2024 Delivery and Returns Report found that 15% of returns are made because the customer’s item was damaged in transit. Regular analysis of your return data helps identify trends, common reasons for returns, and opportunities to improve your whole sales and delivery process.

As a business, you may be unable to prevent customers from returning items, but you can do a few simple things to reduce the amount of returns that come in. Here are three quick wins that could help reduce your volume of returns:

Social media is also a great way to see the items ‘in real life’, especially if posted by customers alongside reviews of the product. Seven in ten online shoppers are using social media for either inspiration or direct purchasing, so don’t underestimate the power of Social to reduce return rates.

For more information about shopper preferences and insights on improving customer experience, read our 2024 E-commerce Trend Reports.

So who should pay the bill for returns – you or the customer? Providing free returns has proved to be a very successful way for many e-businesses to rebalance the customer satisfaction factor. However, recently, fashion giants like Zara, H&M and Uniqlo have all begun introducing fees for online returns, whilst promoting free in-store returns. For omni-channel retailers, this is an obvious way to encourage shoppers into physical stores - but what if you’re an e-commerce merchant? Covering the cost of returns may affect your overheads but in the long-term, it can pay dividends.

• Cost Savings: Recovering return shipping costs can significantly improve your profit margins, especially if your business has a naturally high return rate.
• Reduced Returns: Charging for returns can lead to a decrease in return rates, as customers are more likely to carefully consider their purchases.
• Environmental Impact: Fewer returns can translate to fewer emissions and a smaller carbon footprint, as less transportation and packaging is required.

Cons

• Customer Dissatisfaction: Charging a customer for a return could create negative sentiment towards your brand. Consider ways to mitigate this, perhaps by providing free returns above a particular sales threshold, or by offering more cost-effective options such as returning to a DHL eCommerce ServicePoint.
• Reduced return business: In our 2024 Online Shopper Trends Report, we found that 37% of online shoppers are frustrated by having to pay for returns, while 13% won’t buy at all if there are no returns options listed. Free returns are the second highest improvement that online shoppers want to see from e-commerce retailers.
• Competitive Disadvantage: If competitors offer free returns, charging for them could put your business at a disadvantage.

While cost savings are tempting, it's important to weigh them against the potential impact on brand loyalty. Carefully consider the pros and cons, and don't be afraid to experiment to find the best solution for your business. You could take a lead from ASOS, who partnered with DHL eCommerce to develop a streamlined, customer-friendly return process, absorbing the costs of returns themselves. This investment in customer satisfaction led to improved brand loyalty and better repeat purchases

The smoother, faster and more efficient you can make returns, the better. Not only will this help to create a better customer experience, it will make the process more efficient (and cost-effective) for you. For this, you need the most reliable partner – and that’s why we’ve designed Parcel Return Connect. From having the option to print out a returns label to go with the purchase, to making returns simple for your customers by dropping off at over 140,000 Access Points, Parcel Return Connect is convenient, efficient and offers all the reassurance you and your customers need for a smooth returns process.