Piggybank And Calculator | FW Logistics

When a business is trying to cut costs that count, many don’t think to look at their customer’s needs. Most of the time, you can put money back in your pocket just by asking why the consumer returned or exchanged the product.

Being in the eCommerce business, you know by now that your consumers hate to pay for product returns. We also know that according to research by Professor Amanda Bower at Washington and Lee University, that customers who paid for their own return decreased their post-return spending at that retailer 75% to 100% in the next two years. Free returns drove customers to spend 158% to 457% more than that, with retailer on future purchases. That is quite a bit of growth.

So why are companies afraid of telling their customers that there are free returns? Because they haven’t dug deeper into why their clients are returning, and avoiding the situation, in the first place.

By doing a bit of research, we find that shockingly 67% of all returned online purchases are the fault of the retailer and not the customer, according to research by Trueship.

  • 23% are due to the wrong item being shipped because of not working with a reliable logistics company
  • 22% results from a product looking and appearing different when it arrives than it did online
  • 22% of ecommerce returns are due to a damaged item being received- again your logistics company

Just by keeping track of where the issues are in these three categories, could save money on returns and increase profits. Two of the categories are immediately associated with your third-party logistics company. So, choosing the right one is directly affecting money in your company’s pocket.

As a bonus, returns data also reveals insights into what your consumers like and dislike about products.

The more you as a retailer can learn about why your products are getting returns, the more you can do to prevent the return all together. Happy consumers=more profit.