Reducing returns: seven levers that really work

Returns are as much a part of online retail as shelves are of a bricks-and-mortar store. Avoiding them entirely is neither possible nor desirable – a shop without returns probably just has too few customers. It is, however, well worth knowing your rate, understanding its causes and tackling the areas where returns can be avoided without spoiling the shopping experience.

## What a return actually costs

The pure return shipping costs are only part of the equation. Add to that goods-in inspection, cleaning or refurbishment, putting items back into stock, payment reversal, a share of support time and – for fashion or technical items – a loss in value if the item can no longer be sold as A-grade goods. Depending on the range, the full cost of a return lies somewhere between 8 and 25 euros. With a rate of 30 percent and an average contribution margin of 20 euros per order, this item determines whether there is a profit at the end of the year.

The second cost block is ecological. Every return means an additional transport leg and packaging material. For shops that make sustainability part of their brand core, a high return rate is therefore also a credibility problem.

## Measure first, then act

Before any measures can take effect, you need a solid data basis. An overall rate of "around 25 percent" doesn't get you anywhere. The metric only becomes useful when broken down:

- by item and category – where are the returns concentrated?

- by return reason – doesn't fit, don't like it, defective, wrong item delivered, speculative order?

- by customer segment – new customers typically return differently than existing customers

- by order composition – selection orders with several sizes are a pattern of their own

A clean reason scheme is important. A free-text line on the returns slip delivers anecdotes, not analysis. Five to eight predefined reasons plus an optional free-text field are the practical compromise.

## Lever 1: Make dimensions, sizes and fit precise

In clothing and footwear, "doesn't fit" is by far the most common reason. Size charts per manufacturer instead of one generic table, notes on the cut ("comes up small"), the model's body measurements along with the size worn and – where possible – feedback from other buyers on the fit noticeably reduce the rate.

But outside of fashion the same applies: dimensions are returns prevention. For furniture, electronics, spare parts and accessories, complete dimensional information including packaging dimensions is often the difference between a suitable order and an expensive return.

## Lever 2: Images that don't flatter, but show

Product photos are meant to sell, but they should not deceive. Heavily edited colours, embellished material renderings and images without a size reference create expectations the goods cannot fulfil.

A fixed image sequence has proven effective: a cut-out view, a detail shot of the surface, an application situation with a recognisable size reference and – for coloured items – a shot under neutral light. A short video of ten to twenty seconds replaces three paragraphs of description in many ranges.

## Lever 3: Manage expectations in the copy

Good product copy also states what an item is not suitable for. The sentence "not suitable for outdoor use" prevents returns more reliably than any list of benefits. That initially seems counterintuitive because it creates purchase barriers – but in fact it filters out precisely those orders that would have come back anyway.

## Lever 4: Ensure correct delivery

Some returns are self-inflicted. Incorrectly picked items, mixed-up variants, transport damage due to inadequate packaging and incomplete deliveries generate returns that are not based on any purchase decision at all. These cases are the most annoying and at the same time the easiest to fix. Spot checks in dispatch and an honest analysis of damage cases by packaging type pay off quickly.

## Lever 5: Offer advice before purchase

The more explanation a product requires, the greater the effect of upfront advice. Configurators, selection aids, comparison tables, a well-maintained FAQ section and a reachable chat cost effort, but move decisions forward in the process. A question answered before the order is placed replaces a return in the best case.

## Lever 6: Design selection orders deliberately

Ordering three sizes of the same item with the intention of sending two back is the norm in some ranges. It cannot be forbidden, but it can be shaped. Size advisors that actively recommend one size, plus notes in the basket ("You have selected the same item in three sizes – our size advisor will help you choose") reduce multiple orders without blocking them.

## Lever 7: Feed return reasons back into product maintenance

The most effective lever is also the most organisational one: a fixed process that feeds return reasons back into product data maintenance. If the reason "comes up too small" accumulates for an item, the size information is adjusted. If "colour differs" accumulates, the image is re-photographed. Without this feedback channel, returns analysis remains a report that everyone reads and no one acts on.

## What you should not do

Some measures lower the rate and harm the business. These include hidden return shipping costs, obstructed returns processes, withholding refunds and blanket blocking of conspicuous customers. They generate negative reviews, lower the repeat purchase rate and damage the brand far more lastingly than the saved return costs are worth.

A differentiated approach is permissible: if you identify extremely conspicuous patterns, you can restrict payment methods for individual accounts. That is something entirely different from a process that puts all customers under general suspicion.

## A realistic target picture

A target corridor rather than a wishful figure makes sense. Set a range for each category based on the assortment, and assess deviations upwards just as much as unusually low values – a rate of two percent in a fashion range usually indicates a returns process that is hard to access, not particularly satisfied customers.

Also schedule a fixed date on which logistics, customer service and editorial go through the ten items with the most returns together. This format takes one hour a month and in terms of impact replaces half a consulting project, because it brings together observations that appear in no report: the crumpled box, the recurring comment on the phone, the variant that is regularly mixed up in the warehouse.

## Conclusion

Returns don't fall through a single measure, but through many small refinements: better dimensions, more honest images, clearer copy, cleaner picking and a process that learns from every return. The effort is spread across editorial, logistics and service – and that is precisely why the topic needs one person to hold it together. Whoever fills this role will see the impact in the margin within a few months.