How to Reduce Returns in Your Stores

Retail returns aren’t just an eCommerce problem; all retailers should be thinking about ways to reduce returns. While online fashion purchases are returned twice as often as items bought in-store, returns in physical stores are also taking a big chunk out of retailers’ market share.

This year alone, returns will cost companies $550 billion­­ (that’s a whopping 75 percent more than just four years ago!) Consumers return 5 to 10 percent of the products they buy in brick-and-mortar stores.

So, what’s a retailer to do to maintain margins? Let’s discuss the current state of retail returns and review a few strategies to reduce returns in your brick-and-mortar store.

The Touchy Subject of Return Policies 

There’s been a trend of lax return policies in the retail industry lately, but retailers are scaling back to contend with the impact of serial returners. Brands such as L.L. Bean still give customers up to a year to return their purchases. However, that’s a little less impressive when you look at the fact that LL Bean used to offer a lifetime warranty.

Certain retail categories are particularly vulnerable to serial returners. For instance, Forbes reports that in apparel, return rates are double of other holiday gifts, and 85% of consumers plan to return apparel gifts.

Growing return rates due to eCommerce serial returners cutting into profit margins have led many retailers to scale back or to place additional regulations on their return policies. Bed, Bath & Beyond recently reduced its return period to 180 days, according to Consumer World. This happened after replacing its no-limit return policy with a one-year deadline just last year. Macy’s returns deadline was also reduced. Now it’s down to an average of 90 days from its former 180-day limit.

But too strict of return policies can alienate would-be repeat and first-time customers. So, to mitigate returns without reducing sales, you need to be strategic. Here are 3 strategies you can use to reduce returns in your stores.

Enable In-store Product Research

Remember showrooming and webrooming? Well, they’re still happening, but 69% of customers research product reviews on their phones before making a purchase in-store.

Importance of WiFi

This means that if your physical store doesn’t offer a consistent, speedy WiFi connection, you’re not enabling customers to do the product research they need to before making a purchasing decision. Which results in… you guessed it… returns when they leave your store and finally get product feedback from their online communities, family, and friends.

Internet speed vs latency is another factor that can make an impact on your ability to enable product research in-store. Slow page load times can prevent customers from doing the product research they need to inform their purchasing decision.

5G is quickly replacing 4G as the new gold standard in internet connectivity. Raconteur describes the difference, “4G can support about 4,000 devices per square kilometer, whereas 5G will support around one million.”

Up-to-date Product Information

It’s equally important to ensure that all of your product data is available online. Be sure to keep product information up-to-date. Remember, customers aren’t always buying for themselves.

Information such as: whether a product is made with vegetarian materials, how a piece of apparel moves when worn outside, the sustainability of your production process, and whether a product runs small or large. All of this gives customers the necessary product data before they make a purchase.

In-store Tech

Last, think about equipping store associates with tech so they can provide customers with product information and information about availability. Additionally, in-store tech helps you level-up your customer service. Associates can process online orders for customers for items out-of-stock in-store. This helps you secure the purchase while keeping shopping convenient for your customer.

Nordstrom did this over 10 years ago back in 2012. In a an article for NPR, Nordstrom’s public relations director, Colin Johnson contends, “You’ve got to be rapid, you’ve got to be on the spot. You have to have that information at your fingertips.”

Interestingly, 66% of store associates say they could provide better customer service if equipped with tablets. Reduce returns in-store by giving customers what they need and boost your bottom line by equipping employees with knowledge and tools to make the sale.

Reduce Returns by Following Up Online

How often have you had an incredible purchasing experience and then never heard from the retailer again? Modern consumers expect retailers to develop ongoing relationships with them. And to do so across multiple touchpoints––physical stores, email, social media, and even print marketing (in some cases).

Consumers are more loyal when retailers put in the work. Consider that 77% of consumers (and 60% of millennials) have “had relationships” with certain brands for over 10 years!

If you’re a traditional brick-and-mortar retailer, relationship-building across channels can feel like a relatively new concept. But just think of it like traditional clienteling (the old calling from cards in a box method), just done on the worldwide web.

It used to be follow-up calls; now it’s follow-up emails and social media love. Start by getting a customer’s email address at checkout to congratulate them on each purchase.

Next, if you haven’t already, it’s time to create brand-specific hashtags. You can monitor customer use of your brand’s hashtags on social media to thank customers personally (or regram them) each time they share images of your products.

Brand-specific hashtags helps start an ongoing dialogue that can drive repeat purchasing and make customers more excited about the products from your store that they already have. Let’s not forget, a fully-engaged customer represents 23% more revenue than an average customer.

For example, KitKat uses the tagline #HaveABreak across its social media platforms. Their customers know and use it to engage with KitKat and their social community.

Additionally, KitKat’s brand-specific hashtag also allows them to scan social media for customer complaints, reach out, and offer solutions to provide great service and mitigate negative impact.

If You Can’t Beat ‘Em, Reduce Return Impact

There is also an opportunity to be more strategic about the returns that do happen in-store to reduce their negative impact on your bottom line. The cold, hard truth is that less than half of returned goods are resold at full price.

To reduce the negative impact of returns, begin by refining your reverse logistics (aka reverse supply chain) operation. Do this so you can refurbish, liquidate, or put back those returned goods on your selling floor in less time. This means you’ll need to mark down fewer products and take less of a financial hit.

Communication is one of the most important factors in the reverse logistics process. You need to ensure stores are aware of the most efficient way to handle returns. You can use a collaboration platform like Bindy to keep your stores in the know.

For instance, if you’re a small to mid-size SMB you may not always have management on-staff to answer complex returns queries or ensure employees are executing updated policies. With Bindy’s in-app chat, your employees can instantly and securely message management for assistance.

Use tasks to create a direct line of communication between management and your retail associates to send your staff supporting materials (and ensure they have read them).

Your staff can communicate with you by uploading and sharing product images and asking for feedback. You can also create linked tasks so staff have an easy to follow series to repurpose your returns in real-time.

Final thoughts…

Not enabling customers to return products is too risky a proposition for modern retailers. Although in-store returns are costly, they can be significantly reduced by taking preventative action.

By utilizing the tools we discussed here and having an ongoing dialogue with your customers, you will be able to reduce in-store returns through excellent client/retailer communication. Happy selling!

About the author:

Jasmine Glasheen is a retail writer, content marketer, and brand representative. She provides thought leadership on the retail sector for The Robin Report, IBM, Retail Minded, Sourcing Journal, and many more. She’s  a Vend Top 100 Retail Influencer for 2 years running and her Instagram is listed as one of Vend’s 15 Retail Instagram accounts to follow.