What Percentage of Online Purchases are Returned?
In the e-commerce world, boosting return rates is a big deal for businesses trying to keep customers happy in the competitive online retail scene. Companies need to be proactive to navigate this efficiently to ensure retention with customers in a competitive space.
As online shopping grows, so does demand. Companies deliver thousands of packages daily which inevitable leads to delays, mistakes, wrong orders and much more. It’s a big reason why the average e-commerce return rate hovers around 20-30%, as companies struggle to avoid product return issues due to lack of resources.
In the era of digital commerce, online shopping has become an integral part of our lives. However, along with the convenience and accessibility of e-commerce comes the challenge of managing product returns. In this article, we delve into the world of online returns, exploring the current state of product return rates, strategies to reduce returns, best practices for e-commerce returns, and an analysis of return rates across different product categories.
The surge in online shopping has transformed the retail landscape, offering consumers a vast array of products at their fingertips. Yet, with this convenience comes a significant challenge for e-commerce businesses – product returns. Understanding the percentage of online purchases that are returned is crucial for companies looking to optimize their operations and enhance customer satisfaction.
How Much Do Returns Cost Retailers?
As online shopping continues to dominate the market, retailers have scrambled to find ways to cut down on returns, as many big corporations are now implementing free returns as part of their business model.
Truth be told, 2023 reports show that it costs e-commerce retailers 39% of the original price to process item returns, which is a significant amount of money for large corporations.
In many cases, costs are so high that large retailers will just let customers keep the item they want to return instead of making them ship it back.
E-Commerce Return Rates: Behind The Numbers
Current statistics indicate a notable percentage of online purchases are returned, with factors like product type, industry trends, and customer behavior playing pivotal roles. The impact of high return rates on e-commerce businesses cannot be understated, affecting both profitability and customer loyalty.
In order to understand e-commerce return rates and how to reduce them, it’s important to look at statistics that tell the whole story. Companies all over the world look to reduce returns, but identifying why your items are returned is a great place to start.
Top reasons for item returns
- Product Dissatisfaction (37%): The leading cause for returns is customers being dissatisfied with the received product. This can result from discrepancies between the online description and the actual item, as well as issues related to quality and functionality.
- Incorrect Sizing (24%): Apparel and footwear continue to be major contributors to returns, with customers frequently encountering sizing issues. Despite advancements in sizing guides and technologies, achieving a perfect fit remains a challenge.
- Defective or Damaged Items (18%): Customers return items due to receiving damaged or defective products. This highlights the importance of robust quality control measures in the supply chain.
- Changed Mind/Impulse Purchases (12%): A significant portion of returns results from customers changing their minds or making impulse purchases. This emphasizes the need for retailers to provide clear product information and attractive return policies.
- Late Deliveries (9%): Items arriving later than expected contribute to returns. Timely and accurate delivery estimates are critical in managing customer expectations.
Industry-specific e-commerce return rate by category
Not all product categories face the same return challenges. Here, we analyze return rates across various product categories, identifying factors contributing to higher return rates in specific areas.
- Fashion and Apparel: Sizing issues and dissatisfaction with the fabric or style are predominant.
- Home Goods: Returns often occur due to discrepancies between product appearance online and in reality.
- Electronics: Defective items and dissatisfaction with performance are key reasons.
How to Reduce Returns in E-commerce
Reducing return rates in e-commerce requires a proactive approach. Strategies to mitigate returns in high-return categories lean into recognizing customer expectations and satisfaction as top priority before the sale.
Strategies to implement to prevent returns:
- Improving product descriptions and visuals
- Utilizing advanced sizing guides and fit technologies
- Enhancing customer support and communication
Leveraging technology for virtual try-ons or product simulations is a forward-thinking and innovative way to minimize returns and enhance the online shopping experience.
E-commerce Returns Best Practices
Streamlining the return process is essential for customer satisfaction. By focusing on positive return experiences, businesses can build customer loyalty and trust.
Strategies to implement to reduce returns:
- Offer hassle-free return policies
- Provide clear and transparent return instructions
- Use data analytics to identify patterns and address common return reasons
Managing product returns is a critical aspect of successful e-commerce operations. By understanding current return rates, implementing proactive strategies to reduce returns, adopting best practices, and tailoring approaches to specific product categories, businesses can navigate the complex landscape of online returns. As we continue to witness the evolution of online shopping, addressing and managing return rates will be key to the sustained success of e-commerce ventures.