Returns are the new normal. The online retail landscape has been shifting fast lately. The world of e-commerce is reaching a critical point where a majority of the adult population is actively shopping online. Shoppers have formed a baseline expectation of what a good experience should be like based on comparison across the multiple online retailers they actively shop with.
How ubiquitous has e-commerce become in 2017? Here’s an interesting data point: Amazon.com has passed the 300m annual users mark. The US has an adult population of 249.5m. While not every Amazon user is in the US, the “.com” domain is primarily used by US customers (other countries have .co.uk, .ca, .fr, etc. as main local site). Therefore Amazon set the baseline expectations around level of convenience that is possible for the masses.
In order to meet increasing shopper expectations of convenience, it’s key to invest in a compelling return experience. It can decide between profit or loss with fashion retailers now facing 25%+ return rates. When asked about the state of returns in 2017, consumers had three key messages:
- Returns are the new normal. There is a baseline expectation of convenience formed by comparing the return experience across multiple retailers. They expect to return easily and be able to try at home without incurring extra costs or risks if they decide to return.
- Returns affect their decision to purchase or not. Most shoppers do read the Shopify returns policy and they will stay away from any retailers that make their policy unclear, complex or simply not customer-centric enough.
- Returns build trust and loyalty. Shoppers that return the most are also the most loyal. They engage with the brand and the return policy can encourage them to buy more, growing long term customer lifetime value.
Let’s take a look at the data behind each of these three topics:
1: Ecommerce returns are the new normal
- 89% of consumers have returned an online purchase in the last three years. The return touchpoint is now mainstream and affects most of your customers.
- 41% buy the same item in multiple sizes or variations, with the intent to return some of them.
- 58% of shoppers mentioned that adding return friction with extra email or phone communication results in a negative return experience. One irritant that came up often is the lack of clarity to track a return status. Many shoppers are worried about their returns getting lost.
- 80% of consumers expect free returns, while only 25% of retailers offer free returns. This tells a lot about the challenge retailers face to meet the shoppers expectations.
2: Returns affect their decision to purchase or not
- 83% of consumers read the return policy before buying. It pays to optimize your policy for conversion like any other part of your site. Unfortunately many retailers show their policy in fine prints, using long and complex language which is not customer-centric. Changes in the return policy should be tested to understand impact on conversion and costs.
- 71% of customers find that a restocking fee or shipping fee can prevent them from making a purchase. This varies by country and product category. Fashion is the category where most shoppers expect free returns.
- 57% of customers believe that the return window should be at least 30 days. Increasing the return window gives them comfort that they will have time to make up their mind without risking missing the window. A long return window decreases urgency to return; shoppers tend to forget they bought something about two weeks after they bought it. So with less urgency more shoppers tend to keep their purchase.
3: Returns builds trust and loyalty
- 72% of consumers said they would spend more and buy more often with merchants that make the return experience simple.
- 77% of returns are done by repeat shoppers. Or to say differently, people who return a lot also tend to spend a lot, and they trust the brand. It means that they are actively engaged with the brand.
- 89% of repeat customers who had a good return experience are likely to buy again. The return experience is a good predictor for customer loyalty and overall customer NPS.
On the topic of returns and loyalty I find myself often sharing this great quote by Tony Hsieh, CEO at Zappos. He makes a good case for more convenience to grow customer lifetime value:
“We also offer a 365-day returns policy for people who have trouble making up their minds. (Originally our returns policy was only 30 days, but we kept increasing it at the urging of our customers, who became more loyal as we lengthened the returns period.) Our returns run high — more than a third of our gross revenue — but we’ve learned that customers will buy more and be happier in the long run if we can remove most of the risk from shopping at Zappos.”
Shopify Returns Management Apps Reviewed
Just like any other part of your store, returns can be optimised by following best practices – you can read more about it here.
The current native Shopify returns management process, ‘shopify returns manager’, is quite basic; if you want to leverage returns there are a number of solutions available. These solutions have been built with different target merchants in mind, and each solution has relative advantages and drawbacks.
Let’s take a look at the main returns management software available today to understand which one is right for your store.
|Return Magic||Bold Return Manager||Returnly||Aftership Returns||Clicksit Return Center|
Per return pricing
For 10+ Returns
|From $9 USD/month||From $0.00 per month. Per return pricing|
|Coverage||Australia, Canada, United States, or Spain||US/CA||US/CA||Global||Global|
Gift card / cash refund
Labels (UPS Only)
Gift card / cash refund
Emails, Portal, Return policy
|Best for||Medium & Large Stores||Small & Medium Stores||Medium & large Stores||Small & Medium Stores||Small & Medium Stores|
Pricing: $19.99 / month
Best for: Small and medium sized merchants that require some automation and customisation, but wouldn’t suit a large merchant. Set up is quite complex and better suited for technical person.
- The Bold app provides the ability to customise the return portal and embed with your returns page.
- The wording of portal and emails can be controlled by the merchants, as well as the from email used to send email communication during the return journey
- Although automation is limited, it is possible to generate automatic labels with UPS in the US.
- There is a CSV export function available (but we never received the email mentioned when trying to download)
- App can be buggy at times as reviewed by customers, although it seems to have improved lately.
- Setting up the app is long, hard and can be frustrating to navigate the settings section.
- Bold manages dozens of apps, so focus and customer service divided across a range of other priorities.
- There is no automation of refunds, gift cards or exchanges, therefore leaves a large part of the return process to be handled manually.
Pricing: Pay-as-you-go pricing starting at $0 / month; fixed annual agreements for high volume merchants.
Best for: Medium and large merchants with highest need for customisation and automation. Merchants with a global customer base.
- High level of customisation of returns portal and emails. Ability to fully brand the portal and emails (wording, CSS, etc.) to look and feel like your main store.
- Highest level of automation for merchants who need to process high numbers of return: automated approvals, labels, emails and cash of gift card refunds.
- Powerful rules engine to personalise the return experience based on variables like the country of order, level of discount, reason for returns and more.
- Only solution that supports over 50 carriers globally using your own carrier account at no extra fee. Ability to translate and support multiple languages for international stores.
- Can Integrate with most 3PLs, ERPs, WMS, etc. via its API.
- Team is entirely focus on solving problem of returns. Fast, friendly and proactive customer service, based on app reviews.
- Pricing scales with your store, so it works for store of all sizes
- While the automation and customisation can be powerful, it requires some initial time and effort to set up initially. Return Magic provides support to make onboarding faster and easier.
- Depending on which carrier integration you want to use, it can generate label errors. While only a small fraction of labels for some carriers will go into error, it impacts the shopper’s experience. Main carriers like USPS, UPS, Fedex, Canada Post, etc. are not subject to label errors.
Pricing: Tiered based on monthly return volume. Starting at $59 for 10 or more.
Best for: Medium and large merchants with higher needs of customisation and automation.The instant refund feature is innovative. However does justify a 15% fee on the orders coming through instant refund? Given that 90% of shoppers that wait for their refund will go on to shop again, the fee paid is not really on incremental revenue.
- Team dedicated exclusively to returns.
- Automated labels in US, however the default is using Returnly’s account to which they apply an extra fee on each label; need to pay to use your own carrier account.
- Instant refund feature allowing shoppers to buy again with a gift card or exchange at the moment of requesting a return; avoids having to wait for the refund.
- Exchanges: Automated exchange flow which makes the replacement order easy to handle, and good experience for the shopper.
- Customisation: Potentially high levels of customisation for merchants willing to pay. The base solution has limited to no branding, so it may look generic.
- Expensive, complicated pricing structure with lots of different extra fees to the base tier pricing: e.g. more than 1 return, customisation, using your own carrier accounts, reporting.
- Slow service at times based on app reviews.
Returns by Aftership
Pricing: From $9 USd/month
Best for: The Aftership returns app is best for the small merchants with few returns, given that the returns and refund need to be processed manually. Larger merchants usually will care more about the on-site brand experience, but smaller merchants are ok with a basic, generic-looking return portal. Works best when also using the Aftership shipping app. App now supports auto label generation. Refund to original payment and refund by issuing gift card are also available too.
- Aftership is easy to install and you can have a live return portal on your site in a few minutes. It’s overall a simple app that focuses on the most basic functionalities for shoppers to request a return. It works well, it’s built by an proven team and overall reliable.
- The return portal and emails have very limited customisation features: it’s not possible to brand the portal to look like your store. Email wording cannot be controlled, so it needs to follow a standardized communication template.
- There is no automation. It is not possible to generate labels automatically. Refunds need to be issued manually and it does not support gift card refunds (unless you manually generate a gift card within the Shopify merchant admin).
- The Aftership team divides their focus over a series of apps; this return app is a complement of their main app and not their core focus.
- No reporting, so really possible to learn how to optimize returns.
- The Shopify integration was buggy when first tested.
Clicksit Return Center
Pricing: Free – with the option to use CollectPlus in UK (charge per return)
Best for: Small and medium-sized stores in the UK, with a UK customer base, and requiring some customisation and automation.
- Highly customisable and automated return portal setup in line with your brand: yourdomain.com/a/returns. Customise wording of emails.
- A hassle-free customer experience, where shoppers can seamlessly track and monitor returns via the self-service customer returns portal.
- Ability to arrange returns by looking up mobile phone number or email provided at checkout.
- Ability to manage and monitor returns via an easy-to-use dashboard – and keep your customers informed of the status of their shipment by email.
- Flexible pricing suitable for small and medium stores: process returns for free using the app or use CollectPlus in the UK and pay per return.
- Ability to process unlimited returns each month and inspire customer confidence with the reputable CollectPlus service: send customers a prepaid label and they can drop off the return at any of the 7000+ stores in the UK.
- Good level of automation for approvals, labels, and emails provided for processing high numbers of returns.
- Simple installation and integration process with your Shopify store.
- Strong customer support available 7 days a week 9-5 GMT, with a chat bot available. Backed up by strong reviews.
- UK stores can produce return labels; international stores can manage returns but not produce return labels.
- Currently only able to produce return labels for one UK carrier, CollectPlus. Expanding to international soon.
- A few compatibility issues with certain Shopify themes.
How to pick the right returns management software for you
In order to select the most best rma software for your store it is ideal to test out each solution and consider the quality of the product itself, as well as the level of service provided. Problems with returns that take time to resolve are a sure way to lose customers. It is important to access a responsive team when needed. Also important to consider is your budget and level of investment needed in automation, customisation, etc. It may not always make sense to go for the top solution depending on your product category. The more you rely on repeat orders from a customer to achieve an attractive lifetime value, the more you should invest in your return experience. Since most of your returns are done by loyal customers, it can pay off by increasing loyalty and building brand trust. Stores with one-off or infrequent customers may not need the most cutting-edge solution, especially if the return rate is low. And always keep in mind how these decisions affect your net promoter score.
Overall a solid return solution should make returns easier for both and your shoppers. There are several valid options for Shopify merchants and you are best placed to know which option will best meet your needs and desires.
Sources: Return Magic 2017 Consumer Survey. Canada Post’s How to Transform Returns into Assets, Metapack’s Returns – the new battleground.