Introducing Offset, a new way to cover return fees
Samir Kamnani
·September 25, 2024
Here at Loop, we talk to merchants about their pain points every day—and one of the biggest is the high cost of returns and reverse logistics.
Labor, rent, and 3PL costs have jumped by 55% over the last five years, taking a big hit out of merchants’ profit margins. And factoring in all of the costs associated with the reverse logistics process, it can cost two-thirds of the original item cost to send back a single product. The burden of paying for return shipping costs is often more than brands can justify—particularly when many industries see return rates in excess of 25%.
Fortunately, Loop has a new solution in place to help you manage your return costs, while also delivering on the great customer experience that your shoppers expect from your brand.
Enter Offset.
What is Offset?
Offset is a new consumer-paid returns solution that helps you offset the high costs of returns and reverse logistics. With Offset, you can give your customers the option to pay a small fee upfront during checkout in exchange for free returns later. The solution helps you recoup return costs while giving customers peace of mind with easy, free returns.
With Offset, you can deliver profitability and customer satisfaction at scale. Being transparent about return fees up-front reduces friction and dissatisfaction among shoppers later.
You’ll be able to choose from two different pricing models, based on your business needs:
- Offset Free: Merchants looking to free up cash flow can have Loop cover all return software and shipping costs, including Return Bar® drop-offs. In exchange, Loop collects return fees from shoppers through Offset.
- Offset Flex: Merchants who want to shift return costs to consumers in a targeted way can own the Offset revenue stream and recoup return software & shipping costs. Offset Flex allows merchants to personalize the experience for different customer segments, regions, and return outcomes.
“Offset marks a major step forward in helping merchants recoup the rising costs of returns while continuing to deliver a stellar customer experience,” said Hannah Bravo, CEO of Loop. “At Loop, we’re committed to ensuring our partner brands improve both profitability and customer loyalty, especially as they prepare for the peak shopping season. Offset offers the world-class, convenient return options consumers expect today and represents the evolution of the returns experience."
Offset your return fees
Explore OffsetEarly adopters including Mac Duggal, TA3 Swim, Grant Stone, and more are using Offset to cover their return costs ahead of peak season. Loop’s merchants testing Offset in beta witnessed a nearly 10% increase in net average order values by giving shoppers the assurance of a free return, without increasing overall return rates. Additionally, over 80% of shoppers given the option to purchase Offset choose to do so, demonstrating that shoppers value the peace of mind from free returns.
“We are excited to see a significant portion of our customers embracing Offset,” said Emily Greenfield, Director of E-commerce at Mac Duggal. “With the high cost of returns, we look forward to leveraging the tool to continue to optimize savings as we approach the upcoming holiday shopping season.”
A premium returns experience
By using Offset, you’ll be able to delight your shoppers with a convenient and premium returns experience, with no surprises when it comes to return fees. And your brand can either offset the cost of Loop’s returns management software and return shipping by using Offset Free for all your customers, or develop personalized customer experiences by selectively using Offset Flex to recapture revenue from returns.
Paired with Loop’s other revenue-retaining features, such as Shop Now & Later and Instant Exchange, you’ll have the post-purchase tools in place to overcome the challenges of rising costs, and scale your brand sustainably.
Ready to learn more? Book a demo now.
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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.