The Basics and Best Practices of Managing Returns and Exchanges in Shopify

Customer interacting with a website and processes designed to manage returns and exchanges in Shopify

As frustrating as they may be, no business selling products online will avoid the occasional return. The customer-product fit may not be right, or customers may look for an exchange based on shipping damage or a manufacturing defect. It’s why more than 15% of products purchased online are returned. When that happens, a clear and streamlined returns and exchange process becomes crucial.

Do it right, and your returns and exchanges in Shopify become a vital part of doing business online. They’re your chance to delight customers, convincing them that they’ll be well taken care of even when something goes wrong.

But to get there, you have to know where to start. Join us for a discussion of why prioritizing your returns and exchanges in Shopify matters so much. Then see how you can build and optimize your own strategy.

The Importance of Optimizing Returns and Exchanges in Shopify

When they first receive your product, new and existing customers are still uncertain. Because they haven’t seen it in person, they need to make sure it works as well for them as the product page promised. When it doesn’t, or when the product arrives damaged, their continued relationship will depend on what happens next:

  • If the return or product exchange is easy and streamlined for them, they’ll trust that you have their best interest in mind.
  • If they begin to feel like their money is lost, they will not look back. Instead, they’ll look to other online shops for similar products next time.

How you manage returns and exchanges will influence this vital decision. It will also drastically impact your revenue and customer lifetime value. After all, the average business spends five times as much on attracting new customers as they do to retain existing ones, while 92% of customers would buy from an online store again if the returns process was easy.

But there’s more to the importance of both building and optimizing your returns policy. If you communicate it well enough, you can use it as a core marketing and sales tactic. Customers who may be on the fence about spending money through your online store become more likely to do so if they know that they can easily get their money back–or exchange it for a different product–if their expectations aren’t met.

How to Manage Shopify Returns and Exchanges

One of the core benefits of a comprehensive eCommerce platform like Shopify is that merchants don’t need in-depth technical knowledge just to build a few features. More specifically, you can use two core features to optimize your Returns and Exchanges in Shopify:

  1. Shopify Shipping. This allows you to email return labels to customers as soon as they request a return—or print them to include in the box from the start. Shopify Shipping uses a ‘pay on scan’ model that only charges your business when the return is in the mail.
  2. Self-Serve Returns. This allows customers to note when they need to return or exchange an item without having to involve you personally or wait for your response. Simply activate it in your Admin panel, then let customers know where and how they can find this option.

Alternatively, you have two other options: manually enter returns through your admin panel when a customer requests them, or use a Shopify app designed to streamline your returns process. Either way, you can build an easy path for your customers to return or exchange any item with which they’re not 100% satisfied.

3 Best Practices to Manage Returns and Exchanges in Shopify

Customer satisfied with simple and convenient returns and exchanges in Shopify

Learning how to manage Shopify returns on a technical level is only the beginning. To be truly successful in this aspect of eCommerce strategy, you’ll need to follow a few more general best practices as well. These three tips can help you to get started.

1. Write an Intuitive, Customer-Focused Return Policy

Your return and exchange policy will be the centerpiece of any effort to work with unhappy customers. You need a clear policy that outlines exactly what customers can expect and have to do. Write it in terms that are easy to understand and follow, not in legalese. A great return policy should include:

  • Which items customers can return and/or exchange
  • Which products customers cannot return and/or exchange
  • Any time limits on returning or exchanging products
  • What customers will receive in exchange for a return
  • The information customers need to provide to initiate a return, like a receipt or order number
  • What condition the items to be returned or exchanged need to be in
  • What steps customers can take to initiate the return

Here’s the good news: you don’t need to write it from scratch. Shopify’s free return policy generator gives you the language you need to create and optimize your own document.

2. Communicate Your Return Policy Early and Often

Having the right policy in place is just the first step. The next is making sure that your audience knows about it.

Research shows that 67% of customers, more than two-thirds, check your return policy before they make a purchase. Conversely, 54% of online shoppers avoid buying a product they like if the return policy is unclear. Intentionally or unintentionally hiding it only creates frustration. Instead, it pays to be open and honest about it, communicating about it in as many ways as possible.

Add it to your website footer to make sure it appears on all web pages. Also, add it to individual product pages and your FAQ page. Then add direct links into notification emails for individual orders, and integrate its language into your website live chat. In any communications new customers might consume, a quick link to the return policy can help to bring clarity.

3. Learn From Your Returns and Exchanges to Improve Your Business

Finally, it pays to track both your individual returns and broader trends among customers returning or exchanging your items. Analyzing this data allows you to learn about a number of important points to improve your inventory, manufacturing process, supply chain, and more. More specifically, you can use returns and exchange analytics to determine:

  • Which products are most likely to be returned, and which are most likely to be exchanged for other alternatives
  • Typical points of confusion customers might have about your returns, which allows you to improve the build and communication of your return policy
  • Potential inventory issues with products that customers purchase and return more often than others
  • Product defects that aren’t isolated incidents and might need to be addressed at earlier points of the supply chain
  • And more

Some of this information is easily viewable just from quantitative returns analytics. For other pieces of data, you might need to dig deeper into the reasons why customers might be returning specific items. Shopify’s return report can help you get both the surface level and the more qualitative, profound pieces of information you need.

Integrate Returns and Exchanges in Shopify Into Your Larger eCommerce Strategy

Finally, it pays to integrate your return and exchange process on Shopify into your larger eCommerce strategy. The more you can make early knowledge and understanding, along with follow-ups as necessary, a central part of your communications and operational strategy, the better.

On that point, you might need help. The right partner can help you build these integrations while ensuring that your return policy and operations are top-notch. Ready to learn more? Contact us to discuss a potential partnership with Future Holidays today.