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Shopify Returns and Exchanges: 3 Ways to Improve Your Returns Process

Peter Sobotta
Updated 01/16/20 4:33 PM

Shopify Returns and Exchanges Done Right:

When a shopper decides to make a return or exchange from your Shopify store, they expect to find a customer friendly return policy and an easy-to-use experience to quickly complete their return.

Purchasing a product online or on mobile is a surprisingly uniform experience, whether you’re buying a button or a weed trimmer. That’s why retailers of all sizes and types flock to Shopify for the easy, seamless shopping experience it can deliver.

But ecommerce returns are as individual as the retailer and the products they sell. That’s why most eCommerce platforms don’t have built-in returns management functionality.

Frustration with Shopify Returns & Exchanges

The fact is, returns are a lot more complex than purchases. Food returns have different rules than consumer electronics. Furniture requires different handling processes than apparel. And returning that button would be very different than sending back the weed trimmer, both for the buyer and the retailer.

But retailers across all those categories experience the same vexing issue of rising product return rates. According to the Wall Street Journal, eCommerce return rates are hovering around 33%.

How To Manage The Shopify Returns Process 

Because most popular ecommerce platforms don’t offer returns management, retailers are left to cobble together multiple plug-ins to match returns process to their product types. Some also rely on manually-created, error-prone spreadsheets to collect returns data. As a result, product returns processes are slow and cumbersome.

Many Shopify retailers have adopted the belief that product returns are simply a byproduct of doing business online, and can be difficult to gain control over.

The simple truth of the matter is, retailers have much more control over the volume of returns they receive. The sooner you realize that products returns are a controllable problem, the faster they can work to reduce them. To help, here are 7 detailed strategies to kick start the process of reducing Shopify returns.

When you gain control of your Shopify returns process, you transform that negative into a positive. Better returns processes help you better understand your customer and deliver what they want, helping to increase the customer lifetime value while preventing future returns.

Here Are The Three Components Of Returns Optimization

1. RETURNS ORIGINATE: Generating a Return Merchandise Authorization (RMA), creating a return label, collecting reason codes and tracking the return.

A variety of plug-ins are available on the Shopify marketplace to handle each of these functions. However, most carry on the unfortunate tradition of using generic reason codes: did not fit, product did not match description, damaged. Many don’t even have a function to create a return label. And most only allow you to refund, not exchange a product which can be a problem. That doesn’t sound like a good customer experience, does it?

Wouldn’t you like to know what the customer means by wrong size? Was the sweater too tight across the chest? Were the sleeves too long? Was the collar too itchy? Was the jewelry too heavy? Was it broken? Reason codes should be much more specific, and tailored to the product in question.

That’s information you can use to improve product descriptions, sourcing, and processes – because it turns out, according to Chain Store Age and Trueship, most (67%) returns are the retailer’s fault, not the customer’s.

Since a majority of the Shopify products being returned can be attributed to retailer error, it's important for retailers to take proactive actions that will limit the damage product returns have on their bottom line.

Here's how smart retailers are optimizing their Shopify returns policies to convert product returns into returning lifetime customers:

If you’re struggling to manage your Shopify returns and exchanges, start with solving the generic return reason code problem and improving the customer return process.  These will provide an early warning system into returns volume, not to mention providing insights to prevent future returns.

2. RETURNS COLLECTOR: Receiving product, initiating refunds and determining product disposition. 

Returns aren’t just a lost sale: they also put the customer relationship and inventory investment at risk. Retailers need to move quickly to process the refund – or ideally, an exchange (check out next week’s post on managing Shopify exchanges, or subscribe now to get it in your inbox) – to keep the customer happy and increase the likelihood of a future purchase. Aberdeen Group found 64% of businesses are targeting returns management as an avenue to improve overall customer satisfaction.

They also need to move fast to determine if a product can be returned to stock, or diverted to a secondary market or other disposition. The sooner they act, the greater the value they can preserve.

Shopify, like many eCommerce platforms, doesn’t offer a returns processing function within their platform as this is usually a responsibility of the warehouse or 3PL. For this reason, retailers turn to additional software or manual spreadsheets to track returns received. This a good first step, but because it’s manual and/or creates additional manual steps, it often means delays and errors.

If operational efficiency is slowing your growth, it is time to move beyond spreadsheets. Start with removing repetitive and error-prone cut and paste processes which will save time and enables a better customer experience with faster refunds. You can preserve the bottom line while keeping your customers happy.

3. RETURNS IQ: Leveraging data to understand and prevent Shopify returns and exchanges. 

Automating and tracking returns goes a long way to taking the sting out of returns for both retailer and customer. But the biggest opportunity hidden inside your Shopify returns are the insights that help you fine-tune your business, better understand your customers and prevent future returns.

Shopify users who also employ a customer service software such as Zendesk can leverage that tool to start picking up on problematic trends in returns. By combining that with the data you’ve already acquired from steps one and two – origination data and return processing activity – you can start to gain insights into why products are coming back, and take fast action to prevent more returns of those items. You can alert your warehouse about an incoming influx of a difficult-to-handle SKUs, or take action to prevent more returns, such as correcting a mis-slotting in the warehouse, canceling orders with that scratchy fabric or modifying a description to improve fit guidance. 

Your help desk software can provide additional photos, free form reasons for returns, and assist your overall returns analysis. In addition, customer service reps can use that data to advise a customer about an alternate product and save the sale. Advanced users can even customize the returns experience according to user history.

Returns data empowers retailers with the insights and actionable tools to optimize the entire returns process and maximize the bottom line.

Consider downloading your data into CSV files and utilize a tool like Tableau to gain valuable insights.

Filling The Gap In Your Shopify Returns Process

You chose Shopify for the powerful ecommerce shopping experience it can deliver. But because returns are so different than sales, it’s now up to you to put together an effective process for managing and preventing returns.

The first step is to start with the customer and work to create an experience that is both efficient an optimized for data collection.

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