Best Practices for Processing Returns on Shopify

Best Practices for Processing Returns on Shopify

Before we can discuss best practices for processing returns on Shopify, consider these numbers:

Numbers like that are why it’s so important for Shopify retailers to balance customer-friendly policies with the real-life costs of processing returns. Here are seven best practices for processing returns on Shopify.

Adopt a simple return policy 

A great Shopify return policy is explainable in a few sentences, and features key details such as the number of days a customer has to start a return and how refunds are issued. 

Policies that offer 30-days to initiate a return and receive a full-refund are something of the ecommerce standard.

Beyond time limits, a simple return policy should stick to other core details such as:

  • How an item may be returned
  • What way the customer will be credited 
  • Instructions on how to start the return process

Convert returns to exchanges or store credit

Returns don’t need to equate to refunds—exchanges and store credit are fantastic alternatives.

 Lululemon, for example, offers a Fast Track refund option, allowing shoppers returning three or fewer new items to receive a refund via e-gift card within two hours of dropping their items off at a FedEx or USPS location (rather than waiting days or weeks for the return to be received, processed, and approved at the warehouse). 

Shopify can utilize the Narvar Returns & Exchanges app to turn up to 60% of returns into exchanges. After entering their order information and reason for return, the customer can exchange their purchase for a different item or size, giving the retailer a better chance of retaining revenue. 

Automate the return flow

Ecommerce thrives on the thrill of immediacy. If you don’t make the customer wait hours for a purchase confirmation, why would you make them wait hours for a return confirmation? Shopify retailers can use Narvar’s Shopify app to initiate a return, offer feedback for why they’re making the return, and receive instant confirmation and instructions for next steps. Shopify retailers can even automatically extend special return perks to VIP customers or decline returns from blacklisted customers. 

Get ahead of WISMR 

Once a return is underway, customers want a refund or exchange to be processed within 30 days. Thanks to instant refunds and credits, many ecommerce customers expect their money even faster—in a matter of days or hours. For retailers that cannot implement instant refunds, automated “Where Is My Return?” (WISMR) communications are critical for keeping customers happy and reducing retailers’ overhead costs.

In WISMR communications, the best practice is to notify customers by text or email when their return is received by the carrier, and either when it reaches the warehouse or when their refund is issued. Some retailers choose to do all three. 

An added benefit of multiple WISMR communications is it presents more opportunities to suggest products to the customer, or offer limited-time discounts to encourage another purchase.

Offer more choices

Digital returns and boxless returns are cheaper, more efficient alternatives to the old-school practice of enclosing a pre-printed return label with each order. Aside from wasting money and being bad for the environment, this old-school approach leaves you with zero visibility into what’s coming back and why. 

(Did you know that by ditching pre-printed returns slips, retailers can save as much as ¢ 0.40 per order?—It may not seem like a lot, but that can quickly add up to thousands of dollars every year.)

Amazon popularized the boxless digital return, giving customers the option to go to a store and present a QR code when dropping off an item to be returned. Shopify retailers using the Narvar Returns & Exchanges App can choose to offer their customers an equally-convenient experience with more than 200,000 return drop-off locations between carrier stores and partner locations such as Walgreens, FedEx Office, Simon Malls, Mall of America and Nordstrom. 

Utilize logistics to reduce shipping costs

Many retailers are no longer bound by a one-warehouse-services-all approach to inventory management, which means they can customize their reverse logistics policies to minimize losses. Policies can be tailored to account for shipping costs, warehouse space, categories of goods, and third party drop-shipments. 

Let’s illustrate that idea with an example.

A customer in Florida orders a pair of shoes from a Shopify partner that has stores in New York and California. The California location has the size the customer wants, so the shoes are shipped cross-country from California to Florida. If the customer returns the shoes, the order doesn’t necessarily have to go back to California. If the retailer has space in their East Coast store to receive the return, it could be cheaper and faster to direct the return to New York.

The best reverse-logistics rules aren’t fixed on a single data point, but fluid to account for a retailer’s day-to-day needs. Even if your ecommerce system doesn’t offer this option natively, you may be able to add it through third-party technology

Analyze and act on return feedback 

Every return tells a story. With customizable “reason for return,” retailers can gather feedback about their:

  • Materials
  • Manufacturing
  • Shipping process
  • Product photography
  • Product description pages
  • Number of returns in transit
  • Cash value of returns received

And much more.

Example of Narvar Return & Exchange Dashboard for processing returns on Shopify
Example of Narvar Returns & Exchanges dashboard for processing returns on Shopify

Shopify retailers can act on some of this information in real-time to improve their business. For example, if an unusually large number of customers are returning a dress because the size is wrong, the retailer can instantly adjust their product detail page to mitigate future returns. 

In sum…

Customers love patronizing smaller ecommerce retailers, but they also value complete convenience in their online shopping experience. Thanks to app makers like Narvar, it’s becoming faster and easier for smaller Shopify sellers to reach, impress, and retain online shoppers. 

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