How to use returns technology to promote upsells and cross-sells
JP Arnaud-Marquez
·October 6, 2022
While most ecommerce brands are conscious of their return rate, and look to keep it as low as possible, returns aren’t always a bad thing. In fact, returns can be an opportunity – as companies can use returns and exchanges to promote upsells that add revenue to the customer’s original purchase.
Just because a customer returned an item doesn’t mean they’ve written off your brand. Returns happen for any number of reasons – maybe the item was a gift that was similar to something they already had, or they loved the style but not the fit.
When a customer returns something, it’s important for your brand to deliver a great returns experience that encourages them to give you another try – either with an exchange, or even an upsell. In fact, 84% of customers say that a positive returns experience will encourage a customer to buy again, so it’s essential to make sure that your brand shines throughout the post-purchase cycle.
Using returns to cross-sell and upsell products
Returns and exchanges can be good opportunities for both cross-selling and upselling.
The difference between cross-selling and upselling is simple: while cross-selling is the practice of selling items related to or which complement an initial purchase, upselling is selling a similar, but higher-end (and often higher-priced) item to the initial one sold. Upselling can also mean selling the product with add-ons, like selling a pair of wireless headphones and adding in a phone case.
When a customer processes a return, they may intend to keep several items from their original purchase – so you can use their purchase history to provide them with customized recommendations based on items they might like.
If one of the items they held onto was a dog bed, why not recommend a rubber chew toy with the store credit that they’ll receive from returning another item? That’s a good example of presenting a cross-sell opportunity.
Now, let’s say they’ve returned that dog bed from their original purchase. Maybe it turns out that Fido needs a little extra leg room to stretch out his paws. That’s the perfect opportunity for an upsell, by recommending the item in an extra-large size for a few bucks more.
Converting refund requests into cross-sell and upsell opportunities
Many customers may hit your returns page with a singular goal: Get a refund.
But if you do your job right, you may be able to convert many of these refund requests into cross-sell or upsell opportunities.
To find out what the original product was lacking, it’s important to conduct a multiple choice survey to understand the customer’s reason for making a return. Then, you’ll be able to present customized recommendations from your shop’s real-time inventory that showcase items that may be a better fit for their needs.
Concerns about the durability, quality, or wear of a given item can often be addressed with an upsell to a longer-lasting, if slightly more expensive, item. This is also true for items where the return is due to the item lacking certain features, as is often the case with products like electronics, home appliances, and other home equipment.
If the customer doesn’t want a similar version of the item they’re returning, you can offer customized cross-sell opportunities based on their past purchase history.
Did they buy a pair of Clarks sandals from your shoe store last spring? Now’s the perfect time to present your store’s inventory of the brand’s leather boots.
By tapping into their psychology to understand which items from their purchase history they’ve loved, which ones don’t work, and why, you’ll be more likely to retain revenue from returns and build customer loyalty with a customized post-purchase offer that meets each customer’s unique needs.
Using returns management technology to increase cross-sells and upsells
By using a streamlined returns management solution like Loop, you can increase the ease of customer returns, and make it more likely that they’ll remain loyal to your brand.
Loop has a 29.7% conversion rate of returns to exchanges among merchants who use it. And it doesn’t stop at the exchange process – Loop helps merchants generate an average of $1.82 in upsell value per return, leading to higher revenue retention without your team needing to lift a finger.
When a customer requests a return on a Loop merchant’s site, they’ll fill out a short survey that asks why they’re returning an item. If a sweatshirt is too big, you can offer a like-for-like exchange for the next size down, with no need to go through the refund and new-order process.
But what if the customer doesn’t like the item at all?
That’s when you can use Loop as a secret weapon to maximize your cross-sell and upsell opportunities.
Loop can pull recommendations based on the customer’s past purchase history, more premium versions of the item they’re returning, or a sampling of some of your store’s hottest products, encouraging the customer to exchange for one of these items.
You can offer “bonus credit” that the customer can apply towards any item(s) in your store, if they opt for store credit over an exchange. By offering a slight discount on an upsell opportunity, you’ll stand a better chance of retaining a customer – ensuring that you can continue driving revenue and brand loyalty from that relationship for years to come.
Want to learn how Loop can help you maximize your cross-sell and upsell opportunities? Try out a demo today.
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With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.