Every brand has its own unique return policy that states what can be sent back and how refunds work. But what you might not know is that returns impact customer retention, as well as acquisition. Some customers may choose to stop purchasing from a brand if they don't have lenient return policies.
But how else do different return policies affect consumer purchasing decisions? Keep reading to find out more.
One of the main things that customers look for in return policies is the return period. This is a specific time frame that starts when you purchase the item and is where you can bring it back for a full refund or credit.
Some people are happy with a shorter return period, whereas others look for something a bit longer, and this all depends on the demographic of the customer. Based on a report on return policies and consumer habits, they found the following:
Based on these results, brands can focus on their target market by compiling a return policy based on the consumers they want to shop with them. For example, if you're a company that wants to sell to baby boomers or a more older audience, then you should consider offering a 30-day returns policy.
Many customers also base their shopping preferences on how they can return their items. This will often depend on the brand and where they are based. For example, if a shop has a website where you can place orders as well as a land-based store, it might state you have to take all returns back to the store. Or you might also have the option to send it back via mail. On the other hand, online retailers might only offer mail returns.
How a customer chooses is often based purely on personal preference and what option they find easier. For example, if they find it easier to handle a return by going in-store and communicating with a human, they might not opt to shop with brands that are only online. Others might prefer handling it all from home and by themselves, so they'll look for brands that offer mail returns.
If the return is inconvenient and ends up costing them money, they might not want to make a return. In fact, 92% of consumers have stated they will travel for a free return. It also appears that in-person returns are more popular, as 72% have said they are more likely to buy if they have this option.
Another part of return policies that varies is the form of compensation they give back to the customer. For example, more lenient return policies will often provide customers with a 100% money-back guarantee if they give back the items in good condition within the time period. On the other hand, stricter returns policies might only offer an exchange if the product is faulty or store credit. The store credit might not always meet the full price of the product as well.
While it might seem like this could affect the buying decisions of customers, it's actually been found that offering money-back instead of returns doesn't affect purchase likelihood. Instead, it just decreased the likelihood of a return being made.
Customers might not change their buying habits based on money-back or exchanges, but they do prefer return policy leniency. Therefore, they'll prefer to purchase from a brand that provides compensation for the full amount of their product. They also prefer an easier return process.
Without the right returns policy tailored to your target audience, as a retailer or brand, you may notice a decline in customer purchases. If current customers aren't happy with your returns processes, you may also lose loyalty, which isn't good for business. Therefore, you must take into account the implications of your returns policy and try and alter them to meet the needs of your target market.
For help with seamless returns that are bound to make your customers happy, Portless is here to help. We are a 3PL company based in China that has all the tools and strategies to ensure all returns are processed quickly and accurately. Contact one of our professionals for a free consultation today.
