How can you afford to pay return shipping?

[dylandog1987]

I'd like to start offering Free Returns on my listings as an added benefit and assurance. However, my margins are pretty small and return shipping cost on any single item would offset the profit made on a relist. What's your experience with Free Return shipping? Does it happen a lot to you?

[dirk12955]

I offer "Free shipping"  and my average sale is about $10.00

That said,   I never get returns.   Maybe twice in 25 years.

[itsjustasprain]

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@dirk12955 wrote:

That said,   I never get returns.   Maybe twice in 25 years.

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Same here. I offer Free Shipping (in my selling account) for anything under 1 pound in weight. I cannot remember the last return I had.

(This is my buying account.)

[reallynicestamps]

The retail industry average is reported to be 1%.

Most eBay sellers report a Return rate lower than that.

You are allowed to refuse the Return - which means you are abandoning the product BUT you will still be refunding.

It seems to be the general opinion that accepting Returns for Refund makes Claims less likely, since unhappy customers tend to think the No Returns seller will not be cooperative.

Then there is Cookie Jar Insurance.

Which means adding a few pennies or dimes to the asking price for all your items ($4.99 instead of $4.95) as a sort of insurance policy against problem transactions.

Those virtual pennies go in a virtual Cookie Jar.

When a customer reports a problem (INR or NAD) you refund from the Cookie Jar.

As a bonus, this not only covers questionable situations where the customer is fussy (the red sweater was cherry instead of scarlet) but also where you messed up (you sent a blue sweater instead of a red one).

We can have a No Returns policy.

We cannot have a No Refunds policy.

[dylandog1987]

The under 1 pound thing is definitely an interesting angle to consider!

[dylandog1987]

The "No Refunds" is a completely separate topic but I like your stance on accepting Returns will make claims less likely.

[golfingaddict]

Cost vs Value

You can't think of it as a free return on every item.   Nor can you look at one item and determine that it would be too costly.

Just figure out how many returns you get and what those returns would cost you. 

Then figure out how much that is per item sold.

(you can pick any time frame or you can pick 3-4 random months to use.)

If you think of it as an overall cost, spread out over all your sales, rather than a per item cost, you can determine if it is worth it to you.

For example, if you get 2 returns a month and sell 200 items a month.  2 returns would cost you about $10 per month.

But really it is a cost of about $.50 per item sold.

Do you think that it would increase your sales over $10 per month? If so, it may be worth it to use free returns.

[dylandog1987]

Yeah, maybe I'll just do it for a month and see if sales uptick!

[dolcetreasures]

What 1%? This is not even in the realm of reality. 

https://www.richpanel.com/blog/ecommerce-return-rates

[kensgiftshop]

Kind of depends on how many returns you get now.

If you get 1 or 2 a year, it wouldn't be bad.

1 or 2 a month could add up.

[chapeau-noir]

---

@reallynicestamps wrote:

The retail industry average is reported to be 1%.

Most eBay sellers report a Return rate lower than that.

You are allowed to refuse the Return - which means you are abandoning the product BUT you will still be refunding.

It seems to be the general opinion that accepting Returns for Refund makes Claims less likely, since unhappy customers tend to think the No Returns seller will not be cooperative.

---

eCommerce return rates are between 20 and 30%.

[dirk12955]

It depends on what you're selling.   I sell stamps and get zero returns.

I'm guessing clothing sellers and some other categories can't make that claim.

The cookie jar thing is good.    Virtual cookie jar I've always called it.

If you make a profit on everything including the shipping,   You can absorb

an occasional return without suffering too much of a loss.

If your margins are that close that you worry about the cost of a return,   You have other 

issues to be concerned about.    It might be more cost effective to refund the money 

and let the buyer keep the item,  Or let them toss it.    

If you're getting enough returns to REALLY be concerned,  Well that's 

an entirely different subject.  

[iart]

We rarely get returns. We offer free returns on all but our heaviest sales.

Give good descriptions and show good photos and you should be okay.

[meme6253]

With an average sale at $10 & free shipping, Your profit can't be very much at all, It's really good you don't get many returns.

[dirk12955]

  That's an issue on these boards to judge how another seller operates.    I don't have any clue as to what you sell or how 

you gather inventory and how much profit you earn and don't much care and wouldn't presume

to suggest that your business model is faulty.

It's easy to suggest I'm not making a profit without having the slightest clue as to how

my business works.    You have no inkling of the $$ I take out of my ebay business per month.

$10.00 is an average.    Maybe the next sale is $5.00 and the one after that is $50.00   You don't know.

You also have no idea if a good month for me is 400 sales or 800

Only the actual seller doing the actual work has any idea at all whether his efforts

are profitable or not.   Everybody else can take a WAG.