1) Introduction to eCommerce Returns in Canada
eCommerce returns are an inevitable facet of all eCommerce businesses in the world. It is valid for Canada too. E-commerce companies have an estimated 40% return rate in a year. This makes returns a point of caution for all eCommerce retailers in Canada.
Though businesses in Canada are not legally bound to replace a product once bought, most companies do so to retain customers. Two-thirds of Canadian customers consider ease of returns when shopping with a brand.
At this point, eCommerce returns in Canada are unavoidable. This article discusses the prevalent causes for returns and solutions for you. After reading this, we hope you will reduce your return rate.
2) What factors affect eCommerce returns in Canada
Canada is a diverse economy with different personas of shoppers. Being a neighbor to the United States, Canada has osmosis of eCommerce influences. One widespread customer expectation is free return shipping.
To understand what impacts eCommerce returns in Canada, we have identified five possible factors:
2.1) The Hyper Elite Consumer
Canadian consumers fall on the scale of one-time shoppers and hyper-elite shoppers. Hyper elite consumers buy more than 41 products each year.
They are confident shoppers and are more likely to devote loyalty to some brands. For eCommerce businesses in Canada, the hyper-elite shopper followed by frequent shoppers are principal customers.
As these consumers spend more money and time, they also expect higher customer service standards. This mainly includes convenient returns and a friendly return policy. A study by Canada Post found that 63% of customers abandon their carts unsatisfied with the returns policy.
2.2) Customer Willingness to Share Returns Cost
While most customers in Canada love free return shipping, it is not always a viable option for eCommerce brands. The best practice is clearly stating the reasons for charging customers a return fee in your returns policy.
Canadian consumers are conscientious buyers. A study by Business Matters proves this point. Canadian consumers accepted return costs when they bought the wrong size because they felt responsible for the mistake.
Similarly, almost 40% of online shoppers are prepared to split the cost of the return with retailers. While 25% are willing to pay if the returns shipping cost is reasonable.
2.3) Refunds Without the Cost of Returns
Returns are incomplete without refunds. However, both don't need to go together. In many cases, reverse logistics costs exceed the refund amount paid to customers.
During the pandemic, some eCommerce retailers offered refunds to customers and let them keep the product. It made an excellent way for retailers to avoid massive shipping and processing costs.
2.4) Holiday Returns
The holiday season increases eCommerce returns in Canada. Typically the holiday returns season begins in November and extends till January.
While consumers aggressively seize gifts and merchandise, many do so to return the products later. Surprisingly, the tendency is more significant in Gen Z and Millennials shoppers.
However, there is always scope for re-engaging the customer with the brand. You can start by offering exchanges and store credit or transform retail stores to return centers for a favorable returns experience.
2.5) Omnichannel Returns
Canadian customers always look forward to convenience and ease. So, companies like ReturnBear and Happy Returns install numerous dropoff boxes and parcel lockers to simplify customer returns.
Omnichannel returns strategies like buying online and returning products in-store are popular measures. Another popular alternative is alternatives fixing drop-off boxes curbside.
Recently, some eCommerce businesses have started operating vehicles with a trackable mechanism to collect returns in a neighborhood.
These methods reduce resource wastage, logistical costs and streamline the returns process.
3) Five Common Reasons for eCommerce Returns in Canada
Returns tell stories of unfulfilled customer expectations. We have listed the major reasons for eCommerce returns in Canada:
3.1) Wrong Size and Wrong Product
The oft-quoted reason for returns, especially for clothes, shoes, and accessories, is wrong product sizes.
Confusing size charts and product descriptions make customers prone to errors. In these cases, returns are transformed into exchanges with added customer support.
Shipping the wrong product usually happens during the picking and packing stage. But in cases where a customer receives the wrong product, returns become inevitable. And it can also lower the brand’s reputation.
So, eCommerce brands must carefully supervise the picking step to avoid sending the wrong products.
3.2) Misaligned Product Expectations
It is our nature to have second thoughts about everything, and re-evaluating purchases is also natural. This is another common reason for product returns in Canada.
Occasionally, products look different on screen than when they are finally received. Sometimes, customers change their minds after receiving the product if it fails to meet their initial expectations.
Since many return policies have extended return windows, it makes it easier for customers to file for returns.
3.3) Defective Products
Manufacturing defects are severe cases of eCommerce returns. Defective products give customers a valid reason for returns and reduce your brand reputation simultaneously.
Returns can also happen if products are damaged during transit. In such cases, eCommerce brands can rethink their carriers or choose one with secure handling.
3.4) Returning Gifts
As mentioned above, holiday seasons prompt mass returns of gifts. While consumers have their gift list ready, they may buy some extras or change their mindset after purchasing a product.
3.5) Fraudulent Returns Practices
Sometimes, the customer buys products online only to return them after one use. This is true for all verticals of Canada’s eCommerce industry, but the apparel sector suffers the most.
Alternately, free-size apparel also leads customers to buy the same product in many sizes or colors and return them after picking one that suits them. This has increased the volume of returns over the years, and eCommerce brands are grappling with these issues worldwide.
4) Five Ways eCommerce Businesses can Manage Returns
Let’s take a look at the five most prominent ways you can avoid and reduce eCommerce returns in Canada:
4.1) Comprehensive Product Information with Images
A detailed and informative product description is the key to resolving significant returns causes. A standard size chart can deal with size misfitting.
Similarly, high-quality product images and videos will inform consumers about the product and its exact look. Using high-quality images and graphics is a priority here.
4.2) Omnichannel Returns Strategy
Did you know that more than half of Canadian online shoppers expect in-store returns? Therefore, many returns management solutions like ReturnsBear and Returnly promote in-store returns collection.
Omnichannel strategies like exchanging products in-store also promote cross-selling. It also brings customers back to the store from the eCommerce environment.
4.3) Frictionless Return Experience
An excellent customer support system creates a frictionless return experience. Customers always have queries regardless of your FAQ pages and return policy.
Customer solutions like chatbots and live Q/A sessions over calls or texts will solve customer queries in real-time. Your customer support can often guide them to convenient returns solutions.
4.4) Returns Management Solutions
Partnering with SaaS-based returns management solutions and shipping carriers should be on your to-do list. These solutions expertly handle returns and reduce bottlenecks from the returns process.
Solutions like ClickPost and ReturnBear streamline your returns pick-up and drop-off, track shipments, and manage inventory for businesses.
These solutions unburden retailers from manual overwork and lower reverse logistics costs.
4.5) Robust Customer Review
It is common practice for every customer to look for reviews before committing to a purchase. Data suggests that any product with more than 50 customer reviews is less likely to return. Social confirmation sends solid approval to new customers about product quality.
Even when reviews are negative, customers have the chance to weigh their decisions and may buy the product for a trial test. If the product surpasses expectations, it can drastically reduce returns for the brand.
5) Returns Management Services and Solutions for Canada
We have picked up eight returns management solutions that are best suited to reduce eCommerce returns in Canada for you:
ClickPost is a full-scale returns management software solution driven by a compelling AI technology. ClickPost manages critical reverse logistics processes like accepting and processing returns requests and parcel
ClickPost is trusted by major global brands for its seamless automation and convenient-to-use dashboard. You can control all your return orders from a single window.
Integrating with ClickPost allows your customers to place their return requests on a branded returns portal easily. Meanwhile, ClickPost’s intuitive AI engine in the backend processes the requests according to your stated rules. You can thus save time from manually accepting requests.
Their AI mechanism allocates carriers for reverse pick-up based on carriers’ performances and many other metrics. You can be assured that only the optimal carrier is allotted the return pick-up.
The selling point of ClickPost is its ability to reduce RTO (Return to Origin) and NPRs (Non-Pickup Reports).
ClickPost’s pull-and-push APIs extract parcel status in real-time, identify pick-up exceptions and communicate with customers immediately. With ClickPost, you can rest assured about stuck inventory and return delays.
Besides these, ClickPost generates returns labels, notifies customers, and manages failed pickups.
ReturnsBear effectively manages returns to push the returned merchandise into the forward supply chain. They do so by collaborating with multiple retail outlets across Canada.
ReturnsBear is customer-centric. eCommerce businesses in Canada can provide both pick-up and drop-off options to customers. ReturnsBear has multiple kiosks installed all over the country in all major Canadian cities.
It simplifies the returns process so that customers can bypass return labels and package altogether. The best factor is that ReturnsBear handles the quality check of merchandise and re-packs them for reselling.
Retailers can have their returned items in 3 days such that they can be resold faster. As most Canadians are climate-conscious, ReturnsBear too adheres to this principle. It ships the merchandise in batches to the retailer’s warehouse to reduce carbon emissions.
5.3) Happy Returns
Happy Returns specializes in reverse logistics and is a leading name in eCommerce returns. It is a complete returns management software that handles inventory, warehouse, and order processing.
The end-to-end solution offers returns to warehouses and physical stores. It has over 5000 Return Bar that allows customers to drop off their parcels without the original packaging or return label. This makes returns a breeze for customers and adds extra value to eCommerce brands.
The best factor of HappyReturns is aggregate shipping across merchants so that each merchant can save considerably in the returns journey. The cost-effectiveness extends if merchants include PayPal in their payments option.
Their intuitive software automates returns with one-click exchanges, complete visibility of parcels journey, and a brandable returns page. You can configure and integrate returns policies and offer multiple methods for refunds.
5.4) Canada Post
With a vast network of over 6200 post offices, Canada Post is an affordable solution for the return journey of your parcels. Their ‘My Returns’ portal is a free tool where you can set up and manage return preferences.
By integrating with Canada Post’s API, your customers can directly print return labels on your website. And you get the opportunity to cross-sell. Alternately, you can provide a pre-printed return label with the shipment.
The selling point of Canada Post is that many customers are already familiar with it. Their vast network and convenient locations also enable customers to drop off their parcels at a convenient time quickly.
5.5) Purolator Returns Management
Purolator is another effective logistics company that handles reverse logistics, including returns shipping. Purolator refurbishes returned items for reselling or recycling on behalf of the eCommerce company.
They also quickly return the merchandise to the retailer’s warehouse for a faster refund.
They also safely dispose of unsalvagable items complying with environmental safety regulations.
5.6) UPS Returns
UPS Returns service has a range of services with comprehensive returns and exchange facilities. It exchanges high-value items while picking up returned parcels from customers simultaneously.
UPS provides both inbound and outbound tracking features. UPS can directly send return labels to customers via emails or attach pre-printed labels with shipments. Thus, it saves time and creates a convenient return workflow for businesses.
5.7) Return Logic
True to its name, Return Logic creates an objective workflow tailor-made for each business. They analyze a business's pain points and bottlenecks in its returns process and rectify them. This dramatically boosts the efficiency of reverse logistics.
Starting with multi-carrier integrations and pre-paid returns label generation. Return Logic also provides inventory forecasting, a quality check of products, parcel tracking, and exchanges.
They have round-the-clock customer support. Returnly’s AI addresses warehouse and inventory management, including restocking inventory for D2C brands and eCommerce retailers.
The selling point of Returnly is providing the best customer experience for returns. They offer an instant refund facility for an automatic and fast payment process. This gives Returnly a high score in payment processing and refund management.
Returly integrates with other third-party warranty software if eCommerce brands require and customizes its interface. Their self-service online returns portal is brand personalized. Returnly also offers instant credit and in-store return services.
6) What is a Good Return Policy for Canada?
An excellent return policy upholds customer value and builds trust in the brand. Returns policy is also a deciding factor for many customers to shop with a brand. So it is essential that your returns policy address customer concerns.
It should ideally cover the return period, conditions in which return requests can be made, and refund methods. Other clauses can include shipping instructions, access to returns labels, and any shipping or restocking fee.
The policy should be clearly written so that customers can easily understand it. As good practice, you should highlight key points like how to print returns labels and customer service information.
eCommerce returns in Canada are a frequent occurrence. But, instead of losing revenue, you can strategically plan to overcome any hurdles. Returns can also be a way to bond with customers.
Facts suggest that the easier it is for customers to return their product, the higher the chances of them re-visiting your brand. This is why eCommerce brands in Canada should understand the reasons for returns and use returns solutions to optimize their return strategy.
8.1) Should eCommerce retailers offer free return shipping?
Ideally, customers demand free shipping for returns. However, if it hurts an eCommerce business’ bottom line, they should work around ways to avoid it. It is best to be upfront about return costs and indicate to customers to share the burden. Or offer it for specific items.
8.3) How to handle the returned products?
eCommerce businesses can manage returned products in three ways: restocking, recycling or refurbishing, or discarding them. In most cases, if products are in good condition, they are reintroduced into the inventory. This helps control loss and wastage.