How to Reduce Your eCommerce Store's Returns and Chargebacks Rate
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Every eCommerce website owner hopes that their customers are always happy and satisfied with their products. But despite efforts to make customers have a positive experience, reverse product returns (a.k.a reverse logistics) remain a necessary evil all retailers must deal with on an almost daily basis.

Depending on your business’ policy, returns can be a no-questions-asked affair or it can be something that you are trying to resist. Either way, product returns can be a costly expense of selling online. Not only do they occasionally result in chargebacks; it’s also your company’s responsibility to pick up the tab for the reverse supply chain expenses – the process to retrieve a used product from a customer and either dispose of it or reuse it.

According to Chargeback, the most common reasons customers return products are:

  • Incorrect product or size ordered

  • Product no longer needed

  • Product did not match description on website or in catalog

  • Product did not meet customer’s expectations

  • Company shipped wrong product or size

  • Customer unfamiliar with retail interface

  • Customer unfamiliar with product

  • Purchased during holiday season

  • Wardrobing (when a buyer purchases an item and uses it for a one-time purpose with the intent of returning it after the fact)

  • Deliberate fraud

While product returns and refunds cannot be eliminated entirely, there are a few strategies that you can implement to prevent them. To help you do that, we’ve put together a list of solutions that can help reduce the rate at which customers send back previously purchased merchandise.

Start with a solid returns policy

Publish the conditions of returns and refunds in a place on your site where it will be easily noticed by customers before they make a purchase. While retailers are under no legal obligation to accept returns, Section 56 of the CPA does, however, make provision for the return of merchandise that does not comply with the prescribed manufacturer’s warranties. When drafting a policy, consider things such as whether or not a customer may return items without a receipt, how the customer can send items back, the return and cooling-off period, who will be responsible for shipping charges and how the money will be refunded to the consumer’s card or account. A clear and fair returns policy is the doorway to successful relationships with customers you’ll instil confidence in shoppers and show them that you’re serious about customer service.

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Invest in a secure online payment gateway

The recent data breach in South Africa shows how effortless it is for criminals to get hold of customer’s personal data. Access to consumers’ sensitive information can result in account takeover fraud where criminals change the official contact information or adds another user to an existing account. Once they have taken over a customer’s account, they are able to do transactions without the cardholder knowing about it. While it is up to consumers to protect their personal information, your eCommerce store can also do your part in preventing credit card fraud by adopting a secure payment gateway in South Africa. These are robust systems that detect fraudulent activities through technology such as 3D Secure (additional security authentication) and brand-specific services like MasterCard SecureCode and VERIFIED by VISA.

Provide clear product information

In eCommerce, a picture is not always worth a thousand words, especially when that’s all your customers must base their judgement on. Unlike brick-and-mortar shopping customers cannot feel or test your products therefore it’s crucial to convey as much information as possible. This includes product sizes, materials used, ingredients, colors, among others. If you conduct cross-border eCommerce business, ensure that you include international size conversion. For an enhanced product experience, you can also provide 3-dimensional angles on product images and virtual fitting rooms.

 

Encourage reviews and gather feedback

E-tailers very frequently undervalue product reviews as they fear negative publicity. Reviews will always be a mix of the good and bad but, regardless, they can help customers make an informed decision and save you a lot of effort down the line. Nothing quite persuades consumers to click and buy than a review that tells them what they can expect from a product. The more reviews you include, the better your conversion rate and the lower your returns rate may be. Consumers are less likely to send products back when they’re convinced they’ve made the right decision. There’s another benefit here: gathering feedback such as why consumers have returned products will enable you to identify areas for improvement.

 

Final thoughts

Apart from the above preventive measures, you should also know how to handle returns and refunds. Rather than viewing it as a downside of business, why not embrace as an opportunity to keep customers happy and inspire brand loyalty. This is where an accommodating returns policy comes in. If you make it easy for customers to return products, you are improving the way they experience your brand.