Did you know the average return rate for online orders can reach up to 30% in the holiday shopping season, with even higher rates in the apparel and footwear industry?
For retailers, that’s more than just a number, it’s a challenge that impacts profits and customer relationships.
Returns in eCommerce are often seen as an unavoidable part of doing business online, but when they start to pile up, they can hurt your bottom line and create a lot of extra work behind the scenes.
The good news? Returns don’t always have to be a loss.
In fact, managing returns in eCommerce the right way can turn a challenge into a growth opportunity.
With the right strategies, returns can become an opportunity, one that drives more sales, builds loyalty, and sets your brand apart. In this blog, we’ll explore how retailers can rethink their approach to returns with solutions like BORIS (Buy Online Return In Store), BOPIS (Buy Online Pick Up In Store), return reports, and store credit options that keep revenue in the business and customers coming back.
But before we explore those solutions, it’s important to understand what’s driving these returns in the first place.
Why Do Customers Return Products?
Returns in eCommerce are a natural part of retail, but understanding why they happen is the first step toward reducing their impact. Some of the most common reasons include incorrect sizing, the item not fitting or looking as expected when tried on, or the physical product differing from how it appeared online.
Understanding the reasons behind returns helps retailers reduce avoidable costs and improve customer satisfaction. These return reasons don’t just impact customers, they also make the return process more complicated and expensive for retailers.
Problem 1: Increase Reverse Logistics Costs and Complexity
One of the biggest challenges with returns in eCommerce is the complexity and cost of reverse logistics. When a customer ships a product back, it sets off a costly chain of events like shipping, inspection, repackaging, and restocking, all of which can take time and resources. These steps are often scattered across different locations, making the process slower and more expensive compared to standard fulfillment.
Solution: Returns In Store as a Revenue Opportunity
Encouraging customers to return online purchases in-store, also known as Buy Online Return In Store (BORIS), is not just a way to reduce logistics costs; it’s a powerful revenue opportunity.
When customers walk into a store to make a return, they’re already engaged with the brand and more likely to browse, try on products, or make an additional purchase. This physical interaction gives store associates the chance to convert a return into an exchange or even upsell complementary items.
With the right training, associates can turn a refund into a retained sale or a higher-value transaction. BORIS not only improves operational efficiency but also helps retailers recapture revenue that would otherwise be lost through traditional online returns.
Along with saving on logistics costs and boosting in-store sales, BORIS also helps retailers restock returned items faster. When products are returned in store, they can be quickly checked and put back on the shelves, much faster than if they were sent to a return center or a warehouse. This means those items are ready for the next purchase sooner, helping retailers keep up with demand and move inventory more efficiently.
Problem 2: The Risk of Returns Increases Without Physical Interaction
When customers purchase items online, they miss the opportunity to physically interact with the product, especially for apparel and footwear. This absence of tactile experience and in-person fitting introduces uncertainty around factors like size, fit, and material. As a result, sizing-related confusion becomes one of the leading drivers of returns in eCommerce.
Solution: Reducing Returns in eCommerce with BOPIS
Buy Online Pick Up In Store (BOPIS) bridges the gap between eCommerce and physical retail by allowing customers to try on items at pickup before a return becomes necessary.
Facilitating Exchanges at Pickup:
• If the item doesn’t fit, the customer can exchange it on the spot
• This instant feedback loop reduces the chance of post-purchase returns
Handling Unavailable Sizes:
• Store staff can use endless aisle inventory visibility to find the right size at another location so that they can either arrange a convenient pickup from another store or have it shipped directly to the customer
Offering BOPIS keeps the customer satisfied and minimizes the operational cost of a full return.
Problem 3: Lost Revenue for Retailers
Retailers often face significant challenges with high return rates, leading to lost revenue and disrupted cash flow. When customers return items for refunds, the money is taken out of the business, impacting profitability. Additionally, frequent returns can strain operational resources and erode customer loyalty. With many customers opting for returns, retailers are losing out on opportunities to drive repeat business and maintain consistent revenue streams.
Solution: Offering Store Credit
A better way to handle returns in eCommerce is to offer store credit instead of refunds. Retailers are increasingly moving away from traditional refunds in favor of offering store credit, a strategy that keeps revenue within the business.
Why Store Credit Works
• Increases Customer Retention: Encourages repeat purchases by keeping customers engaged with the brand
• Boosts Revenue: Ensures that returned funds remain in the brand ecosystem, reducing the risk of lost sales
• Improves Cash Flow: Store credit is typically redeemed faster than refunds, leading to quicker revenue recovery
Enhancing the Strategy with Loyalty Programs
To maximize the effectiveness of store credit, integrate it with your loyalty program by offering bonus points or exclusive perks to customers who opt for exchanges or store credit instead of refunds.
Problem 4: Overlooking Insights Hidden in Return Data
Many retailers focus on processing returns quickly but overlook the valuable insights returns in eCommerce data can offer. Each return includes a reason like fit, color, comfort, or quality and over time, these reasons reveal patterns. Ignoring them means missing out on ways to improve product selection, reduce future returns, and make better merchandising decisions.
Solution: Use Return Reports to Strengthen Merchandising Strategy
Return reports aren’t just operational tools, they’re a strategic asset. By analyzing return reasons by SKU, category, or vendor, retailers can spot trends and take action.
If a certain dress is often returned due to “color not as expected,” it may be time to improve product images. If one vendor’s shoes get frequent “comfort” complaints, it may be worth reconsidering future buys from them.
These reports also uncover gaps in product listings, like missing size charts or unclear descriptions, that lead to unnecessary returns. Fixing these issues not only lowers return rates but also improves customer satisfaction and profitability.
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Turning Returns in eCommerce into a Strategic Advantage
Returns in eCommerce may feel like a loss, but with the right strategies, they can become a powerful lever for growth. By rethinking returns not just as a necessary evil but as a way to engage customers and recover revenue, retailers can shift from reactive to revenue-generating.
Returns in store for online orders reduce logistics costs and open the door to additional purchases. Offering store pick-ups helps avoid returns altogether by letting customers try products before they leave the store. Offering store credit instead of refunds retains revenue while boosting loyalty and repeat purchases. And return data? It’s not just noise, it’s a strategic asset that reveals how to reduce future returns and improve merchandising.
That’s where we come in.
HotWax Commerce helps retailers bring these solutions to life, implementing BORIS and BOPIS, and powering returns intelligence through built-in analytics like Monthly Returns by Region Report, Monthly Returns by Order Report, and Monthly Return Rate Report.
We help you make the most of returns, keeping revenue in your business and customers coming back. Contact our team for a free consultation to learn more.
