How to manage customer returns for your Shopify store
Kelli Trapnell
·March 23, 2023
Whether it’s before the checkout or post-purchase, a shopper’s engagement with your brand should be seamless and positive, encouraging them to come back to your store. This doesn’t stop when a shopper initiates a return. In fact, a smooth returns experience can be a key opportunity to improve the overall impression of your brand and build customer loyalty.
Read more about how returns affect brand loyalty in the Future of Shopper Experience.
At first glance, a successful return seems quite simple: All you need to do is have the customer send you the product, then issue a refund. In practice, the returns journey provides many moments where your brand can either step up and impress, or fall behind the competition.
This article will break down the best practices of managing onsite returns, including:
- Seeing returns as an opportunity, not a liability
- Best practices for returns on Shopify
- Upgrading the returns experience
- Converting a return into a win
Seeing returns as an opportunity, not a liability
While no one wants to have to deal with returns, everyone understands that sometimes they’re inevitable. Buying online can make it difficult to fully know what you’re purchasing, so as ecommerce sales increase, so do returns. CNBC reported that retail returns in 2021 jumped to 16.6% from 10.6% in 2020. And the rate of returns continues to increase.
The good news is that return rate grows in tandem with sales. Shoppers are comfortable buying online, and more often than not, they’re also used to making returns, too. Rather than seeing the returns process as an exercise in damage control, merchants should embrace returns as an opportunity to demonstrate their customer service and show shoppers they care.
Related: See how our partner Zendesk integrates with Loop for elevated customer support
A return doesn’t mark the end of the customer journey. Some shoppers may be willing to exchange an item or accept store credit for a future purchase. Others may be won over by a discount code or a related product recommendation. For those that do decide to accept a refund, a positive experience may still encourage them to come back to the store in the future for a different item. By showing them that you’re invested in making this right, you can make the shopper feel valued and confident in your brand.
But what makes the returns process a positive experience? A few key factors can transform your returns strategy from painful necessity to pleasurable opportunity.
Best practices for returns on Shopify
Here are a few great ways to optimize your Shopify store’s returns strategy:
Clearly communicate your store’s return policy
Invesp reports that two-thirds of shoppers will check a company’s returns policy before making their purchase. Shoppers care about your returns policy.
Make returns easy for both you and your shoppers
Shoppers also want returns to be simple. In fact, 92% of shoppers are likely to make a repeat purchase with a merchant if the returns process is easy. Automating your returns process with a software like Loop is a great way to keep returns easy for your shoppers while streamlining your team’s workflow.
Offer free returns (when it makes sense)
Consider offering free returns if your margins can allow for it. You can tailor your returns policy to only offer free returns to your VIP shoppers, for instance. However you leverage them, free returns show that you’re willing to make returns easy, which can help build a positive image of your brand.
Related: Learn 4 tips to fight the rising cost of returns
Upgrading the returns experience
Another way to improve the returns process is to generate free returns labels on-demand for your shoppers, whether you’re working with USPS, UPS, or a Loop integration partner like EasyPost. This simplifies the end-to-end process, while also ensuring that you get an alert when a shopper is initiating a return. If you put a manual return slip in their package, you won’t know to expect a return until the item has been processed at your warehouse facility.
To learn more about the shipping partners that Loop integrates with, check out this directory.
You may also want to consider implementing a dedicated returns workflow, to simplify the experience for your shoppers while also protecting your bottom line. This workflow can include the option to return only part of an order, as well as the ability to identify the reason for returning an item. By pre-determining the acceptable conditions for a returned item, you can educate your shopper in a polite way while also reducing the risk of receiving something ineligible. And if an item doesn’t meet the right conditions, you can create a prompt to offer partial store credit instead—a great way to preserve customer loyalty.
Converting a return into a win
If you’ve followed all these steps, any shopper who returns an item to your store should walk away with a positive impression while leaving you with useful information to inform future retail strategy. If they filled out the reason for return, you’ll know why they returned the item and possibly detect a trend. If something is consistently being returned for being too small, you may want to add a recommendation to the product page to size up. In the long term, this Shopify reporting data can help you improve your merchandising and reduce returns.
When a shopper tries to initiate a return, pay attention to their reason. If the item is faulty in some way or simply the wrong size or the wrong color, this is a great time to suggest an exchange rather than a straight return. By processing an exchange rather than a refund, you avoid any complicated financial steps and can keep that revenue in the bank. It also saves the shopper from having to make a repeat purchase—a win-win.
You can also prompt them to consider buying a related item, perhaps a more expensive one at a discount, or offer them store credit to use at a later date. Store credit is more beneficial to your Shopify store than a straight refund because it requires the shopper to revisit your business and potentially spend more than the value of the credit. There are many useful Shopify add-ons that can help facilitate this for you, combining store credit, gift cards, and loyalty points in a single useful account.
To learn more about store credit solutions, check out Loop’s integration partner Rise.ai
The bottom line
When it comes down to it, a return doesn’t need to mean lost revenue, let alone a lost customer. Streamlining your returns process to maximize convenience and ease for your shoppers will reap dividends in the short- and long-term. What’s more, by leveraging the right technology partners, you can provide elevated customer support and smarter shopping services, without straining your resources.
Want to learn how Loop can benefit your brand? Book a demo today.
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