Savvy online retailers know that a smooth return process is a major factor in customer retention. In fact, consumer-friendly return policies can even increase your sales by reassuring your customers that they can send back items they don’t like. Yet, returns are tricky for online retailers. You want to be fair to your customers and make the process easy for them, but you also need to control costs and factor returns into your pricing. Some returns are unavoidable in online sales, so figuring out your returns strategy with the help of a 3PL is an essential part of your eCommerce fulfillment plan.
Fortunately, you don’t have to figure this out on your own. When you’re developing return policies for your eCommerce business, the best place to start is to see what other online retailers are doing. We rounded up some of the top online retailers in different categories and analyzed their return policies. We’ve put them together with some handy graphics to give you an overview of how some of the biggest online merchants handle returns.
We updated this post on Sept. 13, 2021 to reflect updates to return and refunds related to COVID-19 policies. Some organizations say they will maintain these changes for the foreseeable future. That said, many exceptions apply to policies and it’s best to look up your specific products for a refund. Electronics, prepaid cards, perfumes, and luxury items almost always have their own special rules for returns, refunds, and exchanges.
The fundamentals of return policies
Many companies changed their return policies due to COVID-19. Companies gave consumers extended time to send back unwanted items. Many extended their time for processing returns and refunds, due to reverse logistics challenges created by the pandemic. As the pandemic fades in the U.S., some retailers have returned to pre-pandemic returns policies. But some of the pandemic-related changes year may linger as the eCommerce industry adjusts to the new normal of a higher volume of online orders and returns.
There are a few features that many of the biggest online retailers include in their return policies to make the process easier for consumers. Interactive returns portals, pre-paid return labels, and the ability to look up past purchases are returns amenities that help make the process smoother and invite repeat business.
Department store return policies
Department stores were struggling even before the pandemic, but most have kept their generous return policies. Nordstrom and Saks Fifth Avenue lead the way with their unlimited returns windows. They have further requirements, such as Saks offering returns free for the first two weeks, and then a $9.95 fee will be deducted from your refund. Macy’s and Kohl’s also make it easy for their customers to return items with long return windows, but remember that exceptions always seem to apply.
However, department stores are less likely than most other large online retailers to pick up the shipping charge for returns. That may be because of their historical focus on brick-and-mortar retail. These department stores do offer free in-store returns for online purchases.
How apparel retailers handle online returns
Apparel is one of the most challenging categories for online retail. Customers often order multiples sizes to try on, with the intention of sending at least part of their order back. That’s why apparel has the highest return rates at more than 30%.
Lingerie retailer Victoria’s Secret, part of the L Brands clothing empire, has the longest return window and shortest refund time among these top apparel retailers. It’s worth noting, however, that there is considerable overlap among retail categories. Consumers who want to buy clothes with longer return windows can shop at department stores like Nordstrom or Kohl’s.
Return policies at some of the largest online sellers
This category includes the only all-online retailer covered in this article: Amazon. One of the foundations of Amazon’s popularity is its customer service. Although Amazon’s return policy is not as generous as the other super retailers, free and fast Prime shipping combined with excellent customer service have built consumer trust.
Sporting goods returns
The top sporting goods companies in the U.S. don’t offer free shipping on returns, which is unusual in eCommerce. However, all four of these retailers have many brick-and-mortar locations where customers can take back online purchases free of charge.
REI is an excellent example of a company that has built its reputation on a great return policy. The company will take back items its customers are dissatisfied with, even if the fault shows up after months of use. REI’s return policy is one of the reasons the company has such a loyal customer base. A few years back, the company made its policy more strict, allowing you to return goods for a year instead of an unlimited amount of time. That said, it still will replace goods that have manufacturing and other defects, so contact their customer service to get the final word on their products.
Return policies for electronics
Companies that sell electronics have some of the most restrictive return policies. However, their stated policies don’t tell the whole story. For example, while Apple only accepts returns for 14 days, it stands by its products and will provide a replacement if a product fault comes to light, even beyond the warranty period.
What makes a good return policy?
The convenience of online shopping can be made inconvenient with a difficult return policy. ECommerce companies can make the process more convenient for customers by reducing the time and effort it takes to send back unwanted purchases.
Having an easy-to-find and understand return policy is a great place to start. The policy should clearly state the number of days a customer has to return the item, whether return shipping is free, and any limitations on returns.
Your eCommerce business can stand out from the crowd if it streamlines the process by giving customers a way to log returns online and print a return label. Your portal should allow customers to look up prior purchases, including their receipt. An online return portal also improves reverse logistics operations because you know what items your customers are shipping back.
The importance of an excellent return policy
Every survey of consumer attitudes about eCommerce ranks return policies as important to consumers. With the influx of new online shoppers during COVID-19, giving your customers an easy way to get refunds if an item isn’t what they expected is more crucial than ever. If a consumer knows they won’t be stuck with a purchase removes one of the most significant barriers to buying online, especially for people who are less comfortable with eCommerce shopping.
Return policies should be seen as a marketing tool as well as a retail standard. Having a customer-friendly returns policy can increase sales. Retailers who operate with transparency when it comes to returns reap the benefits of a loyal customer base.
At Red Stag Fulfillment, we have found that the best way to reduce returns is through accurate order fulfillment. In fact, we’re so committed to excellence that we offer accuracy guarantees — if we make a mistake, we pay you. Of course, returns will still happen, and we can help with that, too. And, because we are experts in oversized fulfillment, we can help you manage reverse logistics for hard-to-ship items — just give us a call.
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