The biggest—and busiest—shopping season of the year is fast approaching. As a knowledgeable seller, you now have your inventory sourced, and your holiday listings are prepared. You’re ready to tackle selling this Holiday season—almost. Your returns policy can mean a lot to your buyers during this hectic, yet joyful time of the year. So if you haven’t already, take some time to think through how you offer returns.
A surefire way to attract more buyers this Holiday? Consider implementing a free returns policy to your business. Yes, we said it—free! Offering a noticeable return policy can catch buyers’ attention and lift your sales.
There are a number of reasons why a competitive returns policy can give your store a major selling boost. We share why free returns are the way to go:
Don’t be afraid of returns.
The smartest thing you can do as a seller is look at your business from the perspective of your buyer. Imagine when you’re making an online purchase - you want to feel assured in your choice. Your buyer wants to be confident in their decision too, and that requires them knowing where to find information about your returns policy in your item listing. It will also require searching for exceptions.
A 2016 UPS Pulse Study found that 88% of online shoppers reviewed a retailer’s returns policy, and 67% did so before making a purchase. The point is that your returns policy matters, so much so that it influences your buyers’ decisions. Offering free returns isn’t a negative reflection on your business. In fact, providing free returns has become a customer expectation.
The truth is, returning an item isn’t a personal attack on you or your store. In fact, it’s an effort to continue a positive business relationship. Yes, your buyer decided not to keep you item. But, in the grand scheme of things of what could have resulted (e.g. a negative product review or a forever-lost customer), a painless return transaction is harmless.
Look at the business advantage.
Offering free returns shows that you are confident in your business—which increases buyer trust. Plus, the numbers don’t lie. eBay offers several resources to help you determine what return policy is best for your business. If you currently offer no returns, adding even a 30-day free return policy can lift your conversions close to 17%, according to eBay Data Analytics. The conversions increase from there, with a 60-day free return policy lifting conversions by an average 34%.
You may be thinking that 60 days is a long time for a buyer to determine whether they want to keep your item. However, 60 days accommodates gift-giving buyers who want to make purchases in early November, but not give gifts until late December. Plus, here’s some more good news: eBay research shows that the number of returns does not significantly increase when you raise your return window from 30 days to 60 days—so making the change, even just for Holiday, can be a smart move.
Adjusting your returns policy does not have to affect your bottom line. You can manage the return costs required of your business by adjusting your margin amount. Let’s break that down: before you set out to adjust your margin, we’d suggest that you audit the health of your return rate. Your return rate is calculated by dividing the number of returns, by the number of items that you sold for a period. The retail standard suggests that a 2-5% return rate is a fine range.
Let’s say you find your return rate is far off from the retail standard. We’d suggest that you experiment with your margin amount. You can do so by dividing the costs of returns, by total number of transactions that you’d expect in a year. The amount you will get is that dollar amount that should be added to each of your current listings, to cover any expense from potential returns. This blog post can offer some more detail on calculating return variables.
Follow best practices.
Here are several insights to consider when offering free returns.
The season of giving
The holiday shopping season is an advantageous time to adjust your returns approach. Your customers have spent weeks preparing their holiday gift-giving lists. They are eagerly searching for the right gifts for the special people in their lives. 39% of holiday shoppers look for free returns when buying online, according to the eMarketer Survey. A free-return option shows your buyers you care about their ultimate goal; finding the perfect item and purchasing it from a seller they can trust.
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