In this article
Summarise article
ChatGPT
Claude
Perplexity
Returns are a major burden for online retailers. Not only is revenue lost as a result, but additional costs are also incurred for return shipping. On average, a return costs a hefty €7,93 – a considerable proportion of which are shipping costs – an amount that can quickly add up. Nevertheless, e-commerce returns are unavoidable.
Given the challenges associated with keeping costs low, it is important to be proactive as a retailer, to weigh up how best to respond to such situations, while securing revenue and minimising shipping costs – but without losing sight of customer satisfaction.
In our article, we therefore shed light on the legal basis of returns and show you specific measures you can take to retain the revenue you have already generated. Ultimately, it’s all about finding a middle ground: How can you deal with returns efficiently without getting into financial difficulties?
Innovative approaches to handling returns profitably
Returns management plays a decisive role in the long-term success of a company. A survey of German consumers has shown that uncomplicated returns conditions have a decisive influence on their purchasing behaviour. A full 47 per cent stated that they attach particular importance to simple and problem-free returns. After all, if customers can return their products easily, their trust in the company increases. However, returns also mean a financial outlay and loss of time, which can have a negative impact on profitability.
It is therefore important to understand the importance of returns in e-commerce in order to fulfil customer expectations and improve the overall customer experience. But first, let’s take a look at the legal basis of returns.
Returns under the EU Consumer Rights Directive
The right of return under the EU Consumer Rights Directive is an essential part of online shopping. Consumers have the right to initiate a return within 14 days. Some online retailers even go beyond the legal requirement and generously allow up to 30 days for returns. To exercise this right, the customer must clearly formulate the cancellation and return the goods. The online retailer is then legally obliged to refund the purchase price within 14 days.
Who pays the return costs?
When it comes to returns, the question always arises as to who actually has to bear the return costs. According to Section 357 of the German Civil Code (BGB), it is clearly regulated that the consumer should bear the direct costs of returning the goods, provided that the trader has informed them of this. In legal terms, this is a clear regulation.
In practice, however, this often looks different and varies greatly depending on the retailer. Many online shops offer their customers to pay the postage for the return shipment as an additional incentive to buy. However, this generous gesture can also have negative effects.
If consumers become accustomed to the retailer always covering the return postage, this could lead to them ordering more products and simply sending them back when in doubt – without thinking about their actual needs or the value of the product. This behaviour can lead to increased effort and costs for the retailer. Online retailers should therefore carefully consider whether and to what extent they are prepared to bear the return costs.
Thinking new ways: efficient returns concepts for all needs
As has already become clear, returns are and will remain an unavoidable reality in e-commerce. Every return represents a lost sale, as not only are sales lost, but the costs of returns also have a significant impact on profit margins.
As an online retailer, you should consider that there are other options besides refunding the value of goods in the event of returns. Many customers are also happy with a shop credit or a voucher code. By offering these alternatives, you can maintain customer sales.
But how do you ensure that customers opt for a shop credit?
The solution is simple: offer clear benefits for this decision.
Let’s take a closer look at this topic. When it comes to refunds, online retailers often have two options: refunds with or without return shipping costs. But why should you as a shop operator decide in favour of a specific option? A skilful presentation of the return options can lead to customers being steered in the direction that benefits both parties.
Give the customer a choice and customise the returns form as follows:
– Shop credit with free returns: This option allows customers to return products for free in exchange for store credit in the online shop. In this way, there is no charge for the return.
– Refund with a return fee: Alternatively, customers also have the option of opting for a refund option but must pay an amount to cover the shipping costs.
The key to success lies in the combination. This strategy has proven to be extremely successful, as many shoppers are willing to choose shop credit due to the attractive conditions. Even if they are against this option, refund fees cover part of the shipping costs. Does your shop system have multi-carrier connectivity? Then this opens up even more possibilities for you as an online retailer. In this way, the return costs can be flexibly adjusted depending on the parcel service, thus creating further savings opportunities.
Check this article to create this type of settlement proposal within the Shipcloud Platform.
Would you like to know how you can integrate the returns policy into your current process? We will be happy to provide you with information!
Shop credit as a clever solution for customers and retailers
Overall, refund options offer a win-win situation for you and your customers. By strategically presenting return options, you can guide your customers to take a specific action that benefits both parties.
Customers benefit from the ability to use voucher codes or shop credit as a convenient solution for exchanges. Unlike the traditional returns process, vouchers allow customers to choose another product at any time without having to wait for their return to be processed. Customers can use their shop credit immediately or later and, in the best case scenario, even lead to additional sales as customers with a voucher code are likely to spend more money on their next order.
Online retailers can save time and avoid confusion in stock management by skilfully using vouchers in the returns process. Instead of complicated exchange processes, the returned item is simply replaced with a voucher code and returned to stock. This relieves the burden on customer service, as fewer enquiries are received about the whereabouts of the return, and frees the accounts receivable department from unnecessary remittances.
Conclusion
There is no way around returns – they are an inseparable part of e-commerce and unfortunately cannot be completely avoided. However, as you can see, there are several strategies for reducing the number of returns and lowering the costs per return. With Shipcloud, these strategies can be easily implemented.
Overall, the Shipcloud platform offers a variety of options to make the returns process more efficient and customer-friendly. By creating digital returns forms and setting up intelligent workflows, individual guidelines for returns can be defined. This flexibility makes it possible to offer different options and automate the process. In addition, the risk of potential returns can be reduced in advance by analysing data.
With the integrated returns processing in the Shipcloud platform, numerous shipping options are also available that access Shipcloud’s multi-carrier network. This allows customers to choose from various shipping partners and process their returns quickly and easily.
Use the diverse functions of the Shipcloud platform to optimise your returns process and satisfy your customers. Visit our blog for more exciting articles on logistics and e-commerce – get inspired and discover new opportunities to develop your business!
