How to lower Shopify return abuse rates
JP Arnaud-Marquez
·November 2, 2022
You know it’s important to have a generous return policy.
But sometimes customers take advantage of policies or conduct outright fraud. And that can cost you.
Return abuse can take many forms: Sometimes, it’s a serial returner who buys many items from your store without ever keeping one.
Sometimes it’s a shopper who returns an item in worn condition, so it can’t be resold. And sometimes you have shoppers who are deliberately trying to scam you by returning a counterfeit or stolen item, or a box full of rocks. Seriously, we’ve seen some weird stuff.
To make matters worse, the National Retail Federation found that customer abuse of return policies costs merchants up to $15.9 billion each year.
So how can you curb return abuse for your Shopify brand, while still providing a generous returns policy that shows customers that you care about them?
Try these strategies.
Identify and ban serial returners
While there’s nothing strange about a customer wanting to return an item once or twice, what if it happens with every item they purchase from you – and they’re a frequent shopper?
This is especially common when it comes to clothing. Almost one in 10 shoppers admits to buying apparel products just to wear them for Instagram and other social media shots, and then return them.
Don’t let your store become a wannabe Influencer’s free closet – if customers are frequently taking advantage of your return policy to send back items, you can use data analytics to identify the most frequent offenders, and block these customers from sending back returns to your store.
Build workflows to verify that a product is return-eligible
Customers often send back items that don’t meet your return criteria simply because they don’t know better – and rather than risk alienating them, you may opt to just assume the loss instead.
By using automated returns management technology like Loop, you can set conditions to ensure that each item qualifies for a return. Customers will see the list of their return-eligible items directly on the returns screen, and can initiate a return there.
Once they do, you can provide them with a list of questions that apply to their specific item category. For instance, if the item is a swimsuit, and your policy states that it must be in unworn condition, you can ask the customer if the tags and sanitary protection have been removed – if they have, you can automatically decline the return authorization.
To keep the customer happy, you might offer them a certain amount of store credit to put towards a new item while keeping the unwanted swimsuit. This prevents the unnecessary cost and environmental impact of shipping back a used product that will only end up in a landfill.
Build a return inspection process
While customers who are requesting refunds would ideally like to get their money back as quickly as possible, it’s also important to ensure that the products are in the condition that the customer reported they were.
To avoid misrepresentation, or prevent outright fraud (such as sending counterfeit products or bricks), make sure that you build in a process of inspecting high-value products when they return to the warehouse before authorizing a refund.
For electronics products, for instance, you should make sure that the serial number matches the original item, and make sure that the item hasn’t been damaged due to customer actions, such as neglecting to follow your packaging requirements.
Once the item has been inspected, you can process the refund to the customer’s credit card if it passes inspection. If not, you can deny the refund outright, or contact the customer for follow-up to explain the situation and offer an alternative solution.
Stop return abuse, and improve the experience for non-abusers
Don’t let a few rotten apples spoil the bunch. There’s no need to implement Draconian return policies to mitigate the impact of return fraud or abuse – putting too many restrictions around your return policy will just encourage customers to shop elsewhere in the first place.
Instead, focus on using technology to build workflows that help you instantly identify problems.
By using a returns management solution like Loop, you’ll be able to monitor customers’ return behavior and ID problem customers, set up conditional workflows to authorize or veto returns, and build processes for inspecting returns prior to authorizing a refund if required – all without putting a burden on your customer support team.
This enables your brand to focus on building a delightful customer experience that ensures that the customers you do want to keep will come back, again and again.
Ready to stop return abuse in its tracks? Try a demo of Loop today.
In this article
Stay in the loop
Subscribe for product updates and Loop's biweekly newsletter.
Retain more revenue with Loop today
With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.