Product returns are an inevitable part of running an e-commerce store. Every online retailer has to deal with customers wanting to return products, and whether or not to offer free shipping should be an important part of your returns policy. While you need to be careful here — offering too many free returns can eat away your profitability — there are some real benefits too. Here are the key benefits of free return shipping, and how it can make you money…
#1. Reduce cart abandonment
If your cart abandonment rate is uncomfortably high, offering free shipping on product returns can wield significant downward pressure on it. This is because free returns effectively lower the customers’ commitment and removes a powerful conversion obstacle. The customer need not worry about being out-of-pocket if the item is faulty or damaged in transit — and that will likely give you a nice sales boost that should be greater than the costs of paying for free return shipping.
But be careful to set clear guidelines about the kind of returns that are eligible for free return shipping. Avoid simply paying for your customers’ change of mind. And you can ease the process for your customers — and save on admin time — by providing return labels for free shipping with eligible orders.
#2. Boost customer loyalty
Offering free return shipping is an excellent way to boost customer loyalty and increase return business. Customers want to be confident that they’re dealing with trustworthy vendors, and offering free returns is a powerful signal to your customers that you stand by the quality of your products, packaging and shipping providers. The majority of your customers will likely never need to cash in your offer, but the fact that you’re offering it will increase their confidence in you.
It also helps to establish your profile as a premium brand that won’t haggle on return shipping costs, and can provide a competitive advantage against cut-price competitors who demand that their customers foot the bill for product returns. Just be sure to advertise your free returns policy in a dominant position on your website so you’re drawing the maximum marketing benefit from it.
#3. Increase your conversion rate
Getting your conversion rate up can become an obsession for e-commerce retailers — and for good reason. You’ve spent money on building an excellent online store, then put more cash into attracting traffic, so it can hurt when too many of those visitors come and go without a sale.
The key to increasing your conversion rate is to remove as many perceived barriers to sale as possible. These are the things that your customers will see as reasons not to shop with you. Your returns policy is one such barrier. If your customers think they’ll be hit with a hefty return shipping bill if the product they receive from you is damaged or otherwise not up to scratch, they may look elsewhere. And if your competitors offer free return shipping, they may not come back to you.