Returns are a part of life in retail and even more so in eCommerce. Even four years ago Barclays was reporting on the advent of “Serial Returners” and the impact they were having on UK retailers. Buyers have only got more used to returning items since then. Many buyers will even purchase multiple items with the intention to return the ones they don’t want after seeing them. While this is understandable from a buyer perspective it becomes difficult for retailers.
When the transaction is Cross Border eCommerce returns has several impacts:
- The buyer will be more conscious of the returns policy, they are more likely to read it.
- Buying decisions are more likely to be based on an acceptable return policy.
- The cost of return is much higher than domestically, which you need to incorporate into your costs
- Your return policy will need to be compliant with the rules of the buyer’s country.
All of these point to you need a strong returns policy if you want to optimize your international retail operations. Best practice, if you can, is to offer a policy which is in line with some of the more strict countries. European Regulations are the ones I would normally align to. It means that a buyer can return good brought online within 14 days if they change their mind. Many retailers in the UK and Germany offer 28 days as standard. Retailers are forced to replace, if they can’t then reduce the price or fully refund for damaged goods, assuming they not just minor damage like a small scratch.
The most returned categories, according to Global Web Index are clothing (56%), Electronics (42%), Accessories, watches and jewellery (30%) and Health and Beauty (22%). These are really significant numbers that have a material impact on revenue. Unfortunately I can’t find numbers specifically for Cross Border but experience tells me returns are less than this but with the added impact of buyers just not buying if they don’t like the return process. Overall a bad return policy will cost you more.
So as long as you’ve put in place a strong, compliant return policy the next thing to do is focus on minimising returns in the first place.
The main reasons:
- Wrong sizing
- Item not as described/ expected
- Damaged in transit
- Added taxes on arrival
Make sure you are as clear as you can be on sizes. Where possible put measurements as well as the standard size. Size XL can be very different from one brand to another as can UK women’s size 10. So use measurements.
There are also a few apps you can use now which help to determine the right size for the buyer while they are purchasing. I’ve seen it a few times before but I came across a good example while looking for running shoes a few days ago. On-running.com allows you to select your usual shoe and provides a drop down of other brands you normally wear and gives you a % match based on how many people like the size who are the same size as you. It won’t be perfect but it reassures a buyer and even if the fit isn’t quite as expected when it arrives the buyer’s will question if it’s just how it’s meant to be rather than assuming they need another size.
Implementing such AI solutions is a great way forward with sizing.
Item Not As Described
With international you are likely to either be talking to a buyer who isn’t native to the language or you’ve translated into a language in which you are not native. Either way there is room for error. Keep descriptions clear and to the point in your native language so it can translate easier. Cover all the key areas a buyer needs to know in simple and again clear text.
Ensure your pictures are really descriptive and taken from multiple angles. Where possible include video which will give a much clearer image to your potential buyers. In cross border eCommerce pictures really do make up for potential communication issues and are worth the investment.
Damaged in Transit
Expect your buyers package to be in transit for longer when selling across borders. You also need to expect that, even if traveling with one currier, it will likely change hands and vans a few more times at least. Make sure you package even more carefully than usual and put cushioning around any potentially fragile areas.
Added Taxes on Arrival
Some more detail in this post but if your item is over a certain amount, depending on the country, then you can expect it to be checked by customs. If you haven’t included the taxes in your shipping cost and documents then it’s likely your buyer will be expected to pay the extra when they receive it. This can quickly turn a bargain into a poor purchase decision and quickly lead to return.
Assuming you’ve put in place a strong return policy and done everything you can to limit returns. You’re still going to get them. Managing returns on international sales can challenge your margin so lets look at how best to control costs and return experience and what you can offer.
There are five main ways to manage returns internationally:
- Prepaid Return
- Buyer Paid Return
- Return Locally (buyer or seller paid)
- Work with a Third Party
- Keep the Item!
Prepaid Return Labels
While it may seem counter intuitive to offer prepaid returns while you’re trying to limit returns but it in fact has two positive effects. Firstly it ensures buyer trust and experience while limiting the possible costs for buyers, so aids in the original purchase decision. Secondly, as you were going to offer to pay for the return anyway this method ensures costs are optimized.
Another possibility is to provide a local return option. In which case it’s less of an issue the buyer paying. There are plenty of shipping companies who will provide a return facility, consolidate your returns and ship them all back at once to minimize costs.
Buyer Paid Returns
The simplest solution is telling the buyer to pay for the return. This limits the returns but also the purchase and can be perceived negatively buy a buyer. You may not get a repeat customer here.
Another possibility is to provide a local return option. In which case it’s less of an issue the buyer paying. There are plenty of shipping companies who will provide a return facility, consolidate your returns and ship them all back at once to minimise costs.
Work with a Third Party
With returns and shipping in general being an area of active innovation there are several start-ups who can provide a good return service. Some will resell your goods and pass on much of the sales price. Others will buy them directly and sell on at a profit.
Keep the Item
With some products it can be cheaper just to let the buyer keep the item and send a replacement.
I hope this article gives you some ideas of what to think about when setting up your returns policy internationally. As always we’re happy to hear feedback and how you manage your international returns in the comments below.