Returns are a part of life in retail and even more so in ecommerce. Even 6 years ago Barclays was reporting on the advent of "Serial Returners" and the impact they were having on UK retailers. Buyers have only got more used to returning items since then. Many buyers will even purchase multiple items with the intention to return the ones they don't want after seeing them or trying them on. While is understandable from a buyer perspective it becomes difficult to manage for retailers.
When the transaction is Cross Border Ecommerce, returns must ben thought about in several ways:
A buyer will be more conscious of the returns policy, they are more likely to read it and see if they'd be able to return or not and and what costs.
Therefore, buying decisions are more often made with returns policy in mind.
The cost of return is much higher than domestically, which you need to incorporate into your costs or pass on to the buyer.
Your return policy needs to be compliant with the rules of the buyer's country, not yours.
All of these point to a need for a strong returns policy as part of your optimization in international ecommerce. The best practice, while not always affordable, is to offer a policy which is in line with the most strict countries you will be selling into. European Regulations what retailers who do this would normally align to. Buyers can return goods brought online within 14 days if they change their mind though many retailers in the UK and Germany offer 28 days as standard. Retailers are forced to replace, if they can't then reduce the price or fully refund for damaged goods, if it's not just minor damage like a small scratch.
The most returned categories, according to Global Web Index are clothing (56%), Electronics (42%), Accessories, watches and jewellery (30%) and Health and Beauty (22%). These are really significant numbers that have a material impact on revenue. Unfortunately, while I can't find numbers specifically for Cross Border returns, experience tells me returns are less than this but often the initial purchase is lost on the basis that the buyer finds the thought of returns expensive or impractical, think a buyer purchasing 3 sizes to see which one fits.
So as long as you've put in place a strong, compliant return policy the next thing to do is focus on minimising returns in the first place.
The main reasons:
Wrong sizing
Item not as described/ expected
Damaged in transit
Added taxes on arrival
Wrong Sizing
Make sure you are as clear as you can be on sizes. Where possible put measurements as well as the standard size. Size XL can be very different from one brand to another as can a UK women's size 10. So use measurement charts in your product listings.
There are also apps available now which a you can use on site to determine the right size for the buyer while they are purchasing. Companies like size.ly for shoes enable buyers to check size based on brands they've previously owned. Nothing is perfect but it reassures a buyer and even if the fit isn't quite as expected when it arrives the buyer's will question if it's just how it's meant to be rather than assuming they need another size.
Item Not As Described
With international you are likely to either be talking to a buyer who isn't native to the language on your website or you've translated into a language in which you are not native. Either way there is room for error. Keep descriptions clear and to the point in your native language so it can translate easier. Cover all the key areas a buyer needs to know in simple and again clear text.
Ensure your pictures are really descriptive and taken from multiple angles. Where possible include video which will give a much clearer image to your potential buyers. In cross border eCommerce pictures really do make up for potential communication issues and are worth the investment.
Damaged in Transit
Expect your buyers package to be in transit for longer when selling across borders. You also need to expect that it will likely change hands and vans a few more times at least. Make sure you package even more carefully than usual and put extra cushioning around any potentially fragile areas.
Added Taxes on Arrival
If your item is over a certain amount, depending on the country or region, then you can expect it to be checked by customs. If you haven't included the taxes in your shipping cost and documents then it's likely your buyer will be expected to pay the extra when they receive it. This can quickly turn a bargain into a poor purchase decision and lead to a return decision.
Of course, even if you've put in place a strong return policy and done everything you can to limit returns, you're still going to get them. Managing returns on international sales can challenge your margin so lets look at how best to control costs and return experience and what you can offer.
There are five main ways to manage returns internationally:
Seller Paid Return
Buyer Paid Return
Return Locally (buyer or seller paid)
Work with a Third Party
Keep the Item!
Seller Paid Return
It may seem counter intuitive to offer free returns when you're trying to limit returns, but it in fact has a positive effect on buyer trust while limiting the possible costs for buyers, so helps in the purchase decision. It does leave you open to returns abuse.
Return Locally
Another possibility is to provide a local return option. In which case it's less of an issue the buyer is paying. There are companies who will provide a return facility, consolidate your returns and ship them all back at once to minimize costs.
Buyer Paid Returns
The simplest solution is telling the buyer to pay for the return. This limits the returns but also the purchases and can be perceived negatively buy a buyer. You may not get a repeat customer here if there's a need to return and there are challenges.
Work with a reseller
With returns and shipping in general being an area of active innovation there are several start-ups who can provide a good return service. Some will resell your goods and pass on much of the sales price. Others will buy them directly and sell on at a profit.
Keep the Item
With some products it can be cheaper just to let the buyer keep the item and send a replacement.
I hope this article gives you some ideas of what to think about when setting up your returns policy internationally. As always we're happy to hear feedback and how you manage your international returns in the comments below.
Happy selling!
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