Interviews, insight & analysis on Ecommerce

Uncertainty ahead: Why getting returns right will strengthen your bottom line

By Anton Eder, Founder and CoS of parcelLab

After a surge in online sales during the pandemic, the ecommerce boom is quietening down. Insider Intelligence reports that, in 2023, total retail sales growth worldwide will muddle through at just under four percent and within this, the gap between ecommerce sales growth and retail sales growth has shrunk.

The potential for a recession and rising inflation has made some customers think twice before buying, paving an uncertain path ahead for retailers. Now is not a time for complacency but a time to look at pain points both for customers and within ecommerce businesses – and the returns process is high on the list. 

Price of returns

Returns are a pain point to profitability and revenue for every ecommerce business, especially when done manually. According to the National Retail Federation, $212 billion worth of merchandise was returned to retailers in 2022 which ended up accounting for 16.5% of all online purchases. Retailers like Amazon, Anthropologie, J. Crew, and more have chosen to charge a fee for returns in an attempt to curb the practice.

Yet, customers have come to expect a hassle-free returns process, making it difficult for brands to add restrictions without affecting the overall customer experience. Our research has shown that 92% of shoppers are influenced by a retailer’s return policy when purchasing a product, and 62% will not be likely to return to a specific brand if they have poor returns experience. 

Being strategic with your returns process will entail both fewer instances of returns and cost savings on reverse logistics to strengthen your bottom line.

Minimise economic impact

The good news is that an efficient returns management process that is transparent and easy for customers can reduce the negative impact of returned products as the amount of customer returns continues to grow – it’s also efficient for your employees. Here are several ways you can maximise your purchase experience and reduce your economic impact: 

  • Improve product sizing, descriptions, and imagery: Customers only have online images and descriptions to determine if a product is right for them and you want those assets to increase the likelihood of the product being the best fit. Make sure images are high quality and include what size the model is wearing and how tall they are. Offering a detailed sizing chart with specific measurements and tips on how to select the right size will decrease the need for a return.
  • Include a fair policy for handling ecommerce returns: Striking a balance for what can be returned will reduce ecommerce returns at the source. Include your return policy at checkout so customers know they won’t be stuck with unwanted merchandise. 
  • Be proactive in returns-related communications: Order status and delivery pages on your website will give customers everything they need in one place, decreasing calls to customer service. Only 18% of shoppers think retailers are proactive with returns-related communication, so making sure your team has the right data to deliver critical and personalised delivery notifications will be a strong differentiator and increase customer satisfaction.
  • Process and restock inventory quickly: You don’t want returned products to sit around for long as every minute off the shelf means another unsold item to a customer. With a centralised platform for managing the returns process and real-time data, you can forecast return volumes each day and reduce processing times by understanding what’s in each package and why it’s being returned. 

Interactive experiences like self-service returns are also great ways to let customers easily choose items to return or exchange, provide feedback and print labels. When retailers focus on improving the entire purchase journey from the point of sale to the return, they can retain customers and build long-term loyalty. 

Increase brand engagement

A strategic approach to retail returns management is an opportunity to convert customers into loyal brand advocates and ultimately increase retention and revenue. 

A successful product returns process that’s quick, efficient, and hassle-free for customers goes a long way in building trust and loyalty. If it’s confusing or expensive to return a product to your store, then customers will find somewhere else to shop. In fact, 62% of consumers have reported being unlikely to re-engage with a brand after having a poor returns experience. Remember – customers dislike returning products just as much as ecommerce businesses. In a time of continued economic instability, the way an ecommerce business handles returns could be the difference between growth and failure to thrive. By focusing on personalising your post-purchase communications and simplifying the returns process for customers, you will cultivate and strengthen customer relationships


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