From the Blog
Converting returns into exchanges is critical to maximizing revenue and improving customer loyalty. But why are exchanges so important? Shouldn't we want shoppers to love what they purchased in the first place?
In a perfect world, yes. But in reality, returns are a major part of the customer life cycle because let’s face it, not everything online is the same in person. The goal is to turn those returns and refund requests into exchanges to keep the customer relationship alive. Let’s dive into how you can get more exchanges for your apparel brand:
Don’t make customers pay for return shipping
It’s a myth that offering free return shipping is a cost suck for brands, but it can be if you’re not smart about it. You can save on return shipping costs by:
Reusing original packaging for returns
Taking advantage of cost-effective shipping services like USPS for lighter weight items
Gathering data from customer return reasons
How can data help cut down on shipping costs? If your customers are consistently returning items for the same reasons, you need to see what you can do on the backend to resolve that. Maybe the colors are off, the size chart isn’t accurate, or the description didn’t mention the removable straps—whatever it is, the data will lead you to it and help solve the problem.
But when it comes down to it, the benefits have to outweigh the costs, so it may not be as easy as offering free return shipping on everything. You can get more strategic with it and charge a shipping fee for refunds, but waive that fee for exchanges. The idea here is to make customers think twice before they go through with a refund.
The cost of shipping has a massive influence on consumer behavior. Fun fact: 90% of consumers said they would shop online more often if given the option of free shipping and 73% of consumers are more likely to buy an item if it includes free shipping.
The moral of the story is that offering free shipping across the board could be a game changer for your brand. It could be a deciding factor when a customer is choosing between you and your competitor.
Offer a bonus credit to incentivize exchanges
It’s important to reward your customers who choose an exchange over a refund. One way to do that is to offer a “bonus credit”.
Here’s how it works: if a customer opts to exchange an item, you reward them for it by giving them an extra $5 or $10 bonus (the amount is up to you) which will be reflected in their overall total.
The customer sees it as ‘free money’, your brand should view it as an opportunity to:
Lead to more upsells
Increase repeat purchases
Strengthen brand loyalty
Note that bonus credits do not apply to future purchases and can only be used during the exchange transaction.
Similarly, brands can offer a ‘Higher Price Exchange Credit’. This means you can choose to waive off additional charges during an exchange up to a certain amount. For instance, if you’re exchanging for something that's $5 more expensive than the original item, that fee would be waived.
Don’t underestimate the value of convenience
The goal is to make the process as easy as possible, without sacrificing revenue (trust us, it’s not impossible). Two things you can do to make your customer’s lives easier is to offer full catalog exchanges and instant exchanges.
A full catalog exchange means that your customers can exchange their product for any in-stock item in your store. So if the dress doesn’t fit, they can exchange it for a pair of pants that do. This keeps the relationship with the customer and your brand open, which is vital for customer retention.
For instant exchanges, you would send the customer's exchange package as soon as the customer has shipped the original product (or as soon as the order has been created). That means that your customer doesn’t have to wait even longer to get the product they really want.
Consider extending your return window (especially with the holidays)
Most brands default to the classic 30-day return window, but who says that’s the right amount of time? There’s no evidence that 30-days is the perfect time period for customers to return a product, so maybe it’s time to venture out.
If anything, your brand should consider an extended holiday season return period. $6.3 billion in sales occurred between Black Friday and Cyber Monday for Shopify stores this year, which is a 23% increase from 2020. That means more gifts were purchased and there’s nothing worse than giving someone the wrong gift and having them be stuck with it. That’s your opportunity to retain a customer, don’t lose it.
You can also offer a different return window for returns versus exchanges. For instance, brands can offer a 30-day return window for returns and a 90-day or 180-day return window for exchanges.
Take Sweat Betty, a women’s athletic apparel brand, for example. A few things to call out about their return policy:
Returns postage is free for all US orders
Customers can print their return label or use a mobile QR code
Customers have 45 days to return an items
Orders place from October 28th onward are eligible for returns until January 31st
It’s all about convenience and making your customers happy long term.
Make the exchange process so easy a 5th grader could do it
Avoid back and for exchanges between the customer and support team. A tedious process can prompt the customer to ask for a refund instead of going through the entire exchange process.
Plus, 92% of customers stated they will buy from a brand again if the returns process is easy. That’s why automated returns management systems are the future of eCommerce. They:
Save you time and money
Boost customer loyalty
Increase customer acquisition
Ready to hear the best part? All of this is possible (and more!) with Return Rabbit. See why we’re leading exchange-first returns platform on the market in our on-demand demo.