1. A Quick Look At The Ecommerce Capital Of The World - The United States Of America (U.S.A.)
The United States of America is the birthplace of the modern computer and where internet communication protocols originated. It is only logical that they are one of the eCommerce leaders of the world.
American businesses and research groups continuously analyze and implement new ways to bridge the product-consumer gap. The U.S.A has distinguished itself as the creator of problem-solving applications that enhance the potential of eCommerce. They are ubiquitous when it comes to best practices and policies.
But being the eCommerce capital does not protect the U.S.A from product returns. As tech innovators, they find ways to make eCommerce returns hassle-free. This article focuses on understanding the reasons behind returns in the USA. We will also discuss what they have done to eradicate its many root causes.
2. Reasons Behind Ecommerce Returns In The U.S.A
The United States of America is not a stranger to eCommerce product returns. Recent polls show that about 50% of shoppers have made returns in the last year.
Cementing the returns category leader in eCommerce, nearly 90% of shoppers admitted to returning clothing. Almost 45 % of respondents said they returned shoes and electronics. With computers facing a return rate of 10%, bringing up the rear of an exhaustive list, a question remains - why?
2.1) Damaged Items
Eight out of ten shoppers claim that their reason for product returns is because they received damaged or broken items. Product damage can be attributed to poor inventory management, warehouse issues, or incorrect packaging.
2.2) Products That Do Not Match The Description
A whopping 65% of eCommerce customers request returns and refunds because the product they receive is not as described. This difference can be in color, sizing, composition, or pattern.
2.3) Not Happy With The Product
One-third of customers who have placed return requests do so because they did not like the item received. These product returns could result from poor workmanship, quality, or even functionality.
2.4) Poor Value
A small portion of eCommerce shoppers find that the price charged for the product is not in sync with what they are sent. When customers receive goods of poor value, they often place requests for refunds along with bad reviews.
2.5) Delivered Late
A negligible percentage of online shoppers proceed with return requests because the package did not arrive by the date promised. Since many consumers make purchases based on promised delivery dates, any delay can lead to refund requests.
3. Challenges Face By American Ecommerce Businesses When It Comes To Returns
The eCommerce game in the United States of America comes fully loaded with pro-level challenges. Unless you have the cheat codes for it, you will most likely struggle a little with one aspect or the other.
3.1) No Single Regulator
When it comes to eCommerce return laws, businesses have the right to decide the nitty-gritty of their returns policy. The United States of America's federal law provides some basic guidelines. The state often puts more stringent returns and refund laws in place.
Despite the ground rules, there is an evident disparity in eCommerce returns policies by store and state. Considering that interstate purchases happen all the time, it is no small wonder that a fight for refunds and consumer rights soon ensues.
3.2) Consumer-Led Policies
It is safe to say that all U.S.A return policies are generally tweaked towards customer satisfaction. This means generous return periods, free return shipping, and full refunds. But what about no questions asked extended eCommerce returns?
With stores accepting products with timeframes extending to a year, it is time to find the balance between customer satisfaction and profitability. Since these return policies are popular, they are often set down as the gold standard of best practices. But are they?
3.3) Multi-Return Options
One of the biggest pain points of returns is the requirement for American eCommerce businesses to be able to offer multiple return modes. Customer satisfaction is often linked to flexible delivery modes.
Up to 60% of shoppers prefer to return their goods at the post office, retail store, or courier collection.Less than 50% opt to return eCommerce purchases at collection points or lockers.
But even with returns management companies pitching in with solutions, multi-return options can be a burden for businesses based in the U.S.A.
3.4) Post-Returns Processing
Post-returns processing - both internal and external, are equally crucial. Internal processing involves quality inspection, segregation, and processing, as well as restocking. And external processing involves the reconciliation of refunds and customer-oriented services.
In order to reduce customer churn, businesses must focus on bettering their returns operations. 30% of seniors who avail of eCommerce services in the U.S.A state they will not be a repeat customer after a negative returns experience. 60% of American youth share this sentiment.
3.5) Loss On Product Cost
With most categories, it is impossible to achieve full profit margins post returns. eCommerce returns eat away at profits in the form of shipping, repair, and restocking. Disposing of product returns is often the most cost-effective option.
Environment laws in America make it tougher to dump them willy-nilly. There is often an extensive and cost-heavy routine associated with recycling returned goods. With no motivation to restock the mounting returns, businesses in the U.S.A struggle to balance this process.
4. American E Commerce Returns Laws By State & Kind
In the U.S.A, there are two main rules to follow when it comes to eCommerce returns. The first is that the return policy must be conspicuously visible.
And the second is that the store must clearly mention all returns and refund eligibility and processing rules. This includes listing out non-returnable items.
In Florida, eCommerce retailers can have a no refund policy. Failure to inform customers of the same prior to purchase will entitle customers to a full refund for returns within a week from purchase.
Meanwhile, eCommerce stores in Hawaii can only have one of four kinds of policies. They may offer only refunds, refunds or credit, exchanges or credit, or no refunds, exchanges, or credit.
Minnesota laws even state the font size physical stores may use to display their return policies. The font size must be a minimum of fourteen points.
Ohio-based eCommerce retailers are not required to have return policies. And if they do have one, it can’t simply be on the receipt alone.
Many eCommerce products may be non-returnable. As per federal and state laws, these are usually items belonging to the medical, wellness, or grooming category. Baby products and baby-associated accessories often make it to this list.
Non-returnable eCommerce product laws are generated primarily to blocklist products that may pose a safety hazard. However, products sold in a special event or promotion, membership or coupons, or even digital subscriptions may not be entertained in returns.
The United States of America gives free rein to eCommerce businesses to create their own returns policies. However, this can confuse shoppers when it comes to interstate purchases.
5. How Can Businesses In The United States Of America Reduce Their Ecommerce Returns Rates
Considering the complicated nature of eCommerce product returns in America, businesses would do well to cut down their returns. These can be achieved by applying globally acknowledged best practices to return operations.
5.1) Accurate Delivery
Deliver as promised. Nothing irritates a customer more than overpromising and under delivering. Respect the deadlines promised to your shopper. Even a day can have a difference in successful sales vs. returns.
5.2) Quality As Promised
As always, quality will have a customer coming back from more. Having waited for a package, ensuring their receipt of your goods is not frustrating. Misleading a customer when it comes to quality contributes greatly to return rates.
5.3) Honest Descriptions
Be honest with all aspects of your product. Ensure to accurately describe the trifecta of eCommerce shopping - size, color, and function. Misleading descriptions are a cause of growing concern as they result in avoidable returns.
When possible, use visual comparisons for size and color. This enables a customer to place more trust in your product before purchase. It also gives them a more accurate idea of what they are buying. Also, cut out that photoshop.
5.4) Virtual Reality
An add-on while providing honest descriptions, virtual reality will take things a step further to help you reduce eCommerce returns. When you use the VR feature in your shop, customers can see how your product looks on them or in their space.
Virtual reality also gives a close-to-accurate idea of the size and helps customers decide if your product fulfills their needs. You can be sure your returns will drop by providing them with the perfect foundation on which to make their purchase decisions.
5.5) Proper Packaging
All eCommerce products experience a great deal of trauma on their journey to their new homes. They are jolted, dropped, and tumbled throughout their transit. However safe you are with warehousing and picking, your goods may still sustain damages from transportation.
A surefire way to avoid this is to invest in ample and suitable packaging. When you choose to be stingy in this aspect, it will reflect in your returns and refunds column. Also, any shopper who has received damaged goods is unlikely to return. So spend on your packaging.
6. How Can ClickPost Help Businesses In The U.S.A With Ecommerce Returns
ClickPost can help businesses in the U.S.A. with its returns management solution. Planning the logistics aspect of eCommerce returns is a nuisance. It is time-consuming, painstaking, and not immune to errors.
With AI-powered automation, ClickPost selects carriers specializing in your category of product returns for you. It chooses shipping solutions based on preset selection criteria that you can customize. It also assigns the carrier automatically to each of your returns, requiring no human intervention.
The next step where ClickPost steps in to help is at the time of pick-up. What if the customer is not home or the address is wrong?
Although slight, the time differences in the U.S.A. can be a problem. Failed pick-ups can occur due to miscommunication regarding timing and schedules. ClickPost helps you overcome failed pick-ups by resolving the issue. It shoots out communications to the customer seeking clarifications. The response is then shared with the shipper. And in no time at all, you will have a successful pick-up.
ClickPost allows you to focus on other aspects of your returns by removing the need for human interference in eCommerce returns logistics.
When it comes to tweaking your eCommerce business and its returns, any change you incorporate to improve different aspects is a derivative of three traits - honesty, trustworthiness and the ability to foresee. These traits are responsible for building the biggest eCommerce giants worldwide.
Honesty is the best eCommerce policy your business will wield. Be honest in communicating with the shopper regarding product representations and any financial transactions.
Trustworthiness is key to attracting new customers and culling any negative feedback. To gain customer trust, perfect product pricing, monitor product quality, and offer impeccable delivery services.
Foresight is incredibly crucial when it comes to operations in the American eCommerce space. The ability to identify return patterns and implement appropriate changes in sourcing and logistics can help reduce loss of revenue.
However, eCommerce returns in the United States of America are not in a hurry to disappear. Consider implementing cutting-edge eCommerce tech tools to help you out with your product returns.
1) What percentage of Amazon orders are returned?
Over 20% of products purchased online at Amazon are returned.
2) What is the most returned item in the U.S.A?
Nearly 90% of shoppers stated that they had returned clothing last year.