It’s that time of the year again when along with the end of the year sales lift comes the rush of returns that follows. This is an especially interesting year for holiday sales, given the impact of Covid-19 on retail.

With e-commerce sales exploding during the coronavirus pandemic, retailers may see more returns than ever before. After all, shoppers do not have the chance to touch or try on the items they’re ringing up on the internet. Then, there are the unwanted gifts: the sweaters from grandma that don’t fit or coffee makers they didn’t really need.  But the real and biggest challenge for retailers this holiday season will be maintaining and creating brand loyalty in a predominantly online environment as they work to translate the pre-COVID in-person experience to online.

We recommend you to prioritize in an attempt to reduce returns (year-round) and their cost to your margins:

• State your return policy upfront

Honesty and transparency are essential to building trust with your customers. This is especially true for online businesses. Stating your return policy upfront, before the sale takes place, is a good way of showing your customers that you value their purchase and your product. It also removes the confusion surrounding your return policy and decreases pressure on your support team during the post-holiday rush.

• Set up quick & easy refunds

eCommerce businesses have pivoted to quick and painless policies in order to stay competitive. It’s now commonplace to find retailers that process payment refunds within ten business days. Not only do customers love getting their money back quickly, but the great experience is sure to keep them coming back.

Lastly, when done with care and consideration, your process of refunding customers can be beneficial to your business. Many reports show that almost half of customers (45%) who go online to return an item, will end up making an additional purchase while they’re there.

• Keep inventory organized

You also want to make sure that you have inventory management software that allows for easy returns. That way you can track your inventory on hand and also use metrics to see how much is being returned. You want to quantify your total rate of return, and which categories of items were returned the most.

• Convert More Returns Into Exchanges

Helping shoppers find a new product that they can exchange for the old product can make returns less painful for both the retailer and the consumer. In fact, online sellers have increased online product exchange rates after implementing something called the Happy Returns online return and exchange service. The service seeks to convert as many returns into exchanges as possible to maximize the profitability of a given item and decrease the cost of returns.

• Offer free shipping on exchanges

Most brands are aware that free shipping has a high impact on conversions. But did you know that you can use free shipping as the “carrot” to get someone to issue an exchange vs. a refund? The concept is simple:

If a customer wants to do a refund = customer pays for shipping

If a customer wants to do an exchange = brand pays for shipping

In other words, if a customer wants to request a refund, that’s totally fine – but they’re going to cover the shipping costs since the relationship is ending. But if they agree to an exchange, your brand is going to offer free shipping as a “thank you” for their loyalty. That small fee has the power to make the customer pause and think twice before asking for a refund.

As the growth of eCommerce continues, it’s critical that customer support teams are prepared to handle the challenge. It’s also important that online retailers understand how to leverage returns to build better customer experiences. We hope these strategies can help you stay on top of the post-holiday returns.