Crafting A Return Policy That Works For Your Brand

Happy returns season! Return rates have been rising for the past ten years and are expected to top 35% this year. This is a massive cost to your brand, how can you reduce them? First the most popular advice going around right now is how to make returns harder.  -Charge a restocking fee -Keep a small returns window -Make them jump through hoops to force an exchange Do not do this. This is what my grandfather called being penny wise and pound foolish. Trying to save some money with combative customer service is only going to hurt you. 1. It doesn’t turn people away from returning, it makes them dig in   2. You will be remembered in their minds as an enemy making a stressful time harder 3. Paying a restocking fee on a gift you didn’t want is going to appear, at best, as greedy. This is a great way to obliterate future sales. What should you do? Make it as easy as possible. Counterintuitive but here is why: Someone looking to scam you is going to do it anyway. You aren’t deterring those people by making it harder. But, making it easier will create a sense of camaraderie and good associations, which you will benefit from down the line when you DO have something this person wants. Retention is notably difficult and one of the better ways to achieve it is to be known as a “good” brand. It is one of the few ways to create real loyalty in a product that isn’t addictive or one-of-one unique. It also makes people want to do you a favor. This is the more important part. If you lean in first, you can then: -Ask for feedback directly -Email more often -Get a better social following -Get better word of mouth This matters because it will help your actual problem, year round return rates. Gift giving season has high returns because it isn’t the user who is shopping. But high seasonal returns are hurting you because you also have high returns year round. To combat that you need to know what the problems are and the best way to get that is by having a good enough relationship with the customers so that they will tell you to your face. You have to give to get and to be able to afford that giving you need to have a year of profits that isn’t tanked by a month of high returns. TLDR: Short term: be super easy to deal with, build up your relationships Long term: fix the root issue (bad web UX, weird sizing, unclear use case etc) #ecommerce #retail #profitability

Last year I had a call with the VP of ecommerce of a $300M+ retail company who was convinced their 32% return rate was "just the cost of doing business" When I dug into their data I discovered that almost half of post-purchase revenue loss is preventable. This happens all the time, retailers are pouring their heart and budget into hitting sales targets, only to watch a third of that revenue disappear due to inefficiencies and refunds. It's demoralizing to be a retailer these days. It doesn't have to be this way! Here's the playbook we used to help that company recover over $6.8M in just 4 months: Most retailers focus on the wrong metrics, for example they celebrate $10M in sales while silently losing $3.2M to returns, and another $1M to operational inefficiency, plus $800K to return fraud and abuse. Quick observations: Your "best customers" are killing you! 37% of "VIP shoppers" are serial returners, they look great in your CRM but they're negative margin customers. We found one customer returning over $14K → this is totally preventable! This is our framework that we developed after working with hundreds of enterprise retailers in the past 5 years: Prevent returns Enable size/style swaps and allow for uneven exchanges (more expensive or cheaper options) Store credit options instead of refund Relevant product recommendations for exchange and upsell Analyze the return reasons by product - this can save you a lot of products from being returned! Results: Over 60% reduction in refunds b) Prevent fraud and abuse Fraud rules to prevent return abuse Automate policy enforcement and verification of product quality before the product is sent back Product inspection workflows at the warehouse level Results: the highest we seen last year for a customer was over 90% c) Streamline Operations Setup rules for returns routing to the closest warehouse or outlet stores Minimize clicks and enable a scan, scan, refund workflow Centralize all returns data and actions into one system, to prevent system switching Results: 42% faster processing Returns are not a cost of doing business. They're a goldmine of hidden opportunities. But here's the truth: Most retailers will read this and do nothing. They'll keep losing millions because "that's just ecommerce." The smart ones will see this as the competitive advantage it is. What side do you want to be on? P.S. If you're a retail executive seeing 20%+ return rates, DM me. I'll share our full framework as it’s way more detailed.

Why most brands lose customers after the first order. And don’t even realize it. It comes down to these 4 overlooked factors in your returns process: 1. Return = Emotion, not logistics When customers return, they’re not just returning a product. They’re returning an experience, one that fell short. If your return flow feels cold, rigid, or punitive… They won’t come back. Even if they got a refund. 2. Hidden friction kills future purchases Forced emails. Confusing portals. No clear timeline. Each step adds mental drag. The more clicks, the less chance of re-conversion. Fast, self-serve, no-questions-asked returns win loyalty. 3. No post-return nurture = missed CLTV After a return, most brands go silent. But that’s when retention magic should begin. We helped a brand recover 28% of returners with a simple 3-email “win-back” flow. 4. Data black hole Returns are feedback goldmines. But most brands don’t tag reasons or track SKU patterns. Fixing top-3 return reasons improved product margin by 11% for a client in just 60 days. The most surprising finding? Customers who return and buy again often become your most loyal buyers. If you make the process painless, they trust you more. Fix your return experience, and you don’t just lower costs. You increase lifetime value. P.S. What’s one return experience you loved (or hated) as a shopper?

What allowed my company to grow so fast is that we got really, really good at overcoming customers objections over the phone. We sell laptop kits priced upwards of $10,000 and customers would tell us they wouldn't buy until they "saw it work" and wanted an onsite demo. We couldn't do that, it would never scale. The customer didn't really want to see it work. They wanted to know for certain that it *would* work when spending that much money. The idea to overcame this came from my first (and only at the time!) sales person, William R. Ward. One of the key ideas he introduced was giving the customers a 30-Day Money Back Guarantee. This essentially gave them a demo to use for 30 days and hook up to as much equipment as they wanted. Between that, customer references, and a pile of YouTube videos showing the product in action we could now over come a lot of the sales objection. But a new problem emerged -- All our competitors started to do it as well. All of the sudden we found it wasn't that big of a deal to customers any since everyone offered it.... so we adapt and we change. Customers can now get a 60-day return policy on all our kits but now must do 2 things: Complete the online training and call into tech support at least once. They can still return for any reason, or even swap to a different brand or product. While we just announced this recently, we've been running it this way over the last several months and the results have been better than we hoped -- Only 2 returns by clients, and even better, the clients that did onboard have been much more engaging to learn the product.