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Why a successful holiday season starts with returns

Changing return policies can help boost sales and improve the consumer's experience with a brand.

November 1, 2021

While consumers don’t start thinking about their holiday shopping list until November, retailers have been hard at work gearing up for the hectic months ahead. So much planning and investment is made in driving higher holiday sales, but what about returns? After all, the online purchase is only one part of the customer journey.

Retailers have been racing to keep up with rising shopper expectations post-purchase, and the holidays are no different. With average return rates increasing 10 percent during the holiday shopping period, to achieve success this season companies must apply the same level of investment and care into their post-purchase strategy as pre-sale.

Here are four return strategies retailers can explore to make sure they’re not losing hard-earned revenue and loyalty this holiday shopping season.

Score More Sales With Easier Returns

An easy first step to drive higher holiday sales is to simplify your returns policy and make it readily accessible on your web site. Don’t hide your policy in fine print at the bottom of the page. Instead, surface your “free” or “easy” returns policy across your web site and in marketing campaigns putting shoppers at ease during the decision-making process.

A few places to consider surfacing your policy include the web site header, product pages, cart checkout and FAQ page. Offering a simple, hassle-free return policy will have a big impact on top of funnel conversion, while increasing the chances for repeat business down the road.

Extend Your Policy Window

Making your policy easily accessible is only half the battle. Don’t complicate things by offering different policies for different items or impossibly short return windows that cause unnecessary holiday stress. Roughly $260 billion in retail products are returned each year, and 25 percent of that happens right after the holidays. It may seem counterintuitive, but an extended returns policy grace period will ultimately boost a retailer’s bottom line. Research on existing returns policies uncovered that the more time customers hang onto a product, the more attached they become to it, which decreases their chances of returning it in the first place.

Offering a longer length of time to return products also reduces shopper frustration and the less frustrated shoppers are as they interact with your brand, the more loyal they will become.

Fix the Leaky Bucket of Holiday Returns

Most returns result in lost sales and unhappy shoppers. Retailers like Outdoor Voices and Untuckit have turned what used to be a negative experience and a sunken cost, into a positive touchpoint and a growth engine for their online business.

The process is simple — these brands use Returnly Credit to allow their customers to shop for a new item on their website after their return, rather than being forced to wait the weeks that it takes to ship something back and get a refund. The instant access to “cash” screams “buy something” and as a result, the shopper’s propensity to buy again skyrockets.

Another way to reduce returns and retain more revenue is through data. Retailers have a wealth of data for all things forward logistics but are missing critical insight into the reverse side of the business. Implement a system for collecting return reason insights. Once retailers better understand why customers are returning, they can make the necessary adjustments to merchandising, imagery and product descriptions before the holidays hit.

Eliminate “Out-of-Stock” Exchange Debacles

Let’s take a look at Koio, a luxury leather goods brand that made big changes to scale and accelerate growth for the holiday season. Koio’s success has been built on delivering a premium product at an affordable price. As the company has scaled to service more and more customers, they needed a way to guarantee the same high-quality customer experience post-purchase as well.

In the latest update, Koio is now offering exchanges powered by Returnly Credit to to shop the exchange replacements right away, not once the item has been received and inspected at the warehouse. This not only guarantees immediate gratification for their holiday shoppers, but it eliminates the dreaded “out of stock” nightmare that retailers face while the package ships back.

No matter the time of year, it is important for retailers to find ways to boost happiness and increase loyalty with online shoppers. But this becomes especially important during the high-stakes holiday season, which are fast approaching. So before retailers run out of time, they need to start putting the kind of policies in place that will win their customers’ hearts this holiday season — and that starts with returns.

This article originally appeared in WWD.