eCommerce returns can feel like an unstoppable drain on profits, chipping away at margins. In 2023, the average retail return rate was 17.6%, equal to $247 billion merchandise purchased online returned.
Many consumers today now buy with the full intention of returning some or all of their items. To keep up, brands are expanding warehouse capacity, hiring more staff, and investing heavily in reverse logistics. Returns have become the rule, not the exception, shaping customer expectations and the cost structures for online stores.
But here’s the good news: A well-crafted returns strategy doesn’t have to eat into profits. In fact, it can set your brand apart, boost customer loyalty, and increase holiday profits.
eCommerce returns are an unavoidable challenge in today’s retail landscape, but they don’t have to be a costly one. As the holiday season ramps up, return rates will spike, especially in high-return categories like apparel and electronics. A strong returns strategy during this period isn’t just a nice-to-have—it’s a competitive edge.
- The Cost of eCommerce Returns
- eCommerce Returns: Strategies for Reducing Costs and Simplifying Your Returns Process
- How ShipperHQ Helps with Returns
- Turn Returns into Your Advantage This Holiday Season
The Cost of eCommerce Returns
In 2023, for every $1 billion in eCommerce sales, the industry incurs an average $145 million in merchandise returns. The desire to appeal to consumer demand for free returns comes at a cost, requiring merchants to invest more in staffing, warehouse space, and logistics just to process returns.
These challenges compound during peak season. From December to February, returns surge, adding to resource and financial strain during the busiest time of year. The question isn’t whether returns will impact your bottom line—but how much.
Strategies for Reducing Costs and Simplifying Returns
When you think about your eCommerce returns process, you likely focus on what happens after the customer receives their order. But there’s a way to get ahead of that and make returns easier by planning your returns strategy at checkout.
Here are four checkout strategies that can help you cover costs and simplify the returns process.
1. Give Customers the Option to Pre-Pay for Returns
Offering a pre-paid return option at checkout lets customers decide if they want the convenience of paying for returns upfront. It’s an effective way to simplify the eCommerce returns process while offsetting the costs of returns.
2. Bundle Return Costs with Shipping Fees
Including return costs in the upfront shipping fee—especially for items with high return rates—simplifies the experience for shoppers and covers your bases. By bundling these fees, you ensure a smoother returns process. It also opens the door to generating extra revenue from shipping. When customers pay a small fee upfront for return shipping but decide to keep their items, that return fee becomes added revenue for your business.
3. Segment Policies for eCommerce Returns Based on Customer Profiles
You don’t have to treat all shoppers the same when it comes to returns. Loyal customers who rarely return items could be offered free returns, while “serial returners” or high-return categories might incur a nominal fee. This targeted approach not only reduces costs but also rewards loyal customers.
4. Offer Optional Add-Ons to Boost Order Value
Beyond managing eCommerce returns, the holiday season is the perfect time to introduce optional add-ons like gift wrapping or expedited handling. These value-added services add convenience for your customers and help generate revenue. This way, customers have more choices, and you see a boost in order value.
How ShipperHQ Helps You Take Control of eCommerce Returns
When it comes to managing returns effectively, ShipperHQ’s Simplified Returns feature is designed with merchants in mind. It gives retailers the flexibility to manage returns on their terms. Here’s how ShipperHQ can transform your returns process:
Offset the cost of returns
Include return costs in the shipping total at checkout to cover your costs while simplifying the returns process.
Customize returns options for different segments
Choose who sees the returns option at checkout. For example, you could offer a paid returns option to high-return product categories or specific customer groups, while offering free returns for VIP customers. This selective approach helps you manage costs without compromising on customer service.
Drive additional revenue with flexible add-ons
Beyond returns, ShipperHQ’s Simplified Returns feature lets you offer paid add-ons at checkout, such as gift wrapping. These optional services can help increase order value, making the returns feature more than just a cost-saving tool—it’s a profit driver.
Test your returns strategy before it goes live
With ShipperHQ’s “Test Your Rates” calculator, you can ensure that every setting is ready to go before you push it live on your site, giving you peace of mind that your strategy is reliable and effective.
Turn eCommerce Returns into a Competitive Advantage This Holiday Season
The holiday season brings returns—it’s inevitable. But with ShipperHQ’s Simplified Returns feature, you’re in control. Let returns work for you, not against you, with a proactive strategy that protects profits and enhances the shopping experience. Ready to simplify returns and increase profit? Start a free trial with ShipperHQ and see how simplified, profitable returns can help your eCommerce business thrive this holiday season.
