A product return is one of the most crushing plot twists that can happen to an eCommerce manager. You’ve done everything right. The money was already in your account. But in the end, you lose it all. As if the lost sale wasn’t painful enough, you also get extra work on top of that with restocking the returned product and issuing a refund. Not to mention the costs: all in all, a return costs the retailer on average 21% of the order’s total value.
Is there anything you can do to avoid returns? Not entirely. To some extent, they’re an inevitable risk that you must accept. You can, however, work on reducing their numbers, and a product information management (PIM) system can play a huge part in this.
Here are a few ways that you can leverage a PIM system to reduce the return rate of your store.
Common reasons for product returns
Before we take a look at the solutions that PIM systems offer, first let’s consider the problem itself. During the return process, eCommerce platforms tend to ask customers for the reason why they’re making the return. In some cases, the answer might influence the process itself: for instance, when a warranty comes into play. In other cases, this information is purely for statistical purposes.
Either way, the data provides an extremely valuable insight into the most common causes for product returns. These are, in no particular order:
- The customer bought the wrong product.
- The product was different than described.
- The merchant shipped the wrong product.
- The customer changed their mind or had buyer’s remorse.
- The customer no longer needed the product.
- The product was an unwanted gift.
- The customer found a better price elsewhere.
- The product arrived damaged.
- The order arrived too late.
- The customer was “wardrobing.” This means buying the product just for one specific occasion with the intention of returning it or buying a few different products, like shoes in different sizes, to keep only one of them. This reason is a little different from the others since the customer isn’t likely to admit to this practice and will instead hide it behind a different “official” reason.
As you can see, there are many factors that can lead to a return. Some of them are completely out of your control, and you’d need to be a mind reader to fix others. But in the case of a few, there are steps you can take to reduce their number, and a PIM system can be hugely helpful in doing so. Let’s take a look at those cases in more detail.
The role of product descriptions and attributes in preventing returns
In a way, you’re in luck. The most common reason for returns, simply buying the wrong product, is also the one that presents the most room for improvement with PIM systems. As you might know, the main purpose of such solutions is to store, manage, and distribute product information that’s detailed, verified, and up-to-date. This is precisely what you want to help your customers make informed decisions and, as a consequence, reduce returns.
Returns in the clothing industry
As an example of the importance of product descriptions and attributes, let’s take a look at the clothing industry. It happens to be the vertical with the highest return rate in all of eCommerce, which makes it a great case study. So, what does a “wrong product” mean in this context?
Size and fit
Size and fit are the top factors that can go wrong when buying clothes online. This isn’t surprising. Even if you know the size you wear, different manufacturers often have different ideas of what that means.
Still, there’s a lot you can do to reduce this risk. For starters, you can set up your PIM system to offer more detailed sizing and fit information. To avoid ambiguity, you can present sizes both as traditional letter sizing, like S, M, L, etc., and numerical values in inches or centimeters. You can also create an attribute to describe if a given piece tends to fit tight or loose when sized correctly and another one to let customers know when a brand tends to deviate from the norm with sizing.
Picture-related information can also go a long way. For instance, more and more stores provide information about their models’ measurements and the size they wear in the photos, which provides much-needed context to customers.
Source: Zara
Colors
What about the colors, though? They’re tricky to present accurately because everyone’s screens are different, which might lead to a big number of returns.
This is a more difficult problem for sure, but it’s not impossible to solve. The obvious suggestion here is to make sure your photos are detailed, high quality, and consistent, meaning similar lighting, angles, and so on. But we can go deeper than this. Depending on the PIM you’re using, you might have access to some useful tools that pull metadata, specifically the precise color hex codes, from your pictures.
Now you’re working with extra data that you can leverage. For instance, you can implement a swatch to help customers visualize the color better, or use the hex code as an attribute and suggest similar or complementary products on that basis.
Source: Algolia
You can also go a step further and set up a tool that will automatically translate the hex codes into color names, for instance, “crimson” instead of “#DC143C.” This will give your customers another layer of information they can use to make informed decisions. Better still, why not implement an automatic warning similar to the one about sizing that will let users know if a certain color tends to appear lighter or darker in person. As you can see, there’s a lot you can do to handle this tricky situation.
Advanced search and filtering
Detailed product information enabled by PIM systems is vital when the customer is already looking at a specific product page, but it’s just as important when they’re just browsing the store. Picture this scenario: a customer makes a return because they bought the wrong product even though you also offered one that would fit their needs better.
What went wrong here? Of course, this might have been a simple mistake by the customer. But just as well, it might mean that the “correct” product was difficult to find. It might have been poorly categorized so it didn’t display in the relevant filters, and the search bar results weren’t much help either.
This is where PIM systems come into play again. Their ability to effectively categorize, tag, and manage product attributes means that you’ll be able to set up much more sophisticated and effective search and filtering engines for your store. This, in turn, results in a higher success rate of clients finding the exact product they’re looking for. It also enables you to set up smart recommendation systems.
Source: thegood
Product comparison tools
Building on the previous point, detailed product information stored in your PIM system also makes it easy to implement a product comparison feature. This will provide another layer that helps customers make the optimal purchase for them and reduce the risk of return as a result.
Of course, a comparison feature will be more useful for some verticals than others, namely those where products can be described with multiple directly comparable attributes. Electronics are the perfect use case, while clothing: not so much.
How reviews and user-created content reduce returns
Another common reason for product returns is customers having second thoughts after making a purchase. Again, this isn’t a factor you’ll be able to eliminate completely because people aren’t machines. Sometimes we act impulsively and don’t make fully rational choices. But that doesn’t mean that you’re helpless as an eCommerce owner.
As research shows, a robust system of PIM system-powered customer reviews can be a great way to reduce this type of risk. They can help your customers make more rational, informed decisions in two ways. The first is fairly obvious: reviews verify whether the product matches its description in terms of quality, features, size, and so on. This is rather binary. The product either is as advertised or it isn’t. The other aspect is more complex but potentially also more valuable. Reviews might tell undecided customers how the product fits into the reviewers’ personal hopes and expectations that they had while making the purchase. In other words, does it work the way they expected it to? Did it help them solve a specific problem? Most importantly, do they consider it good value?
User-created content can also be worth experimenting with. It adds a visual element to the reviews, which can be very impactful in certain verticals. Clothing is again the obvious example here, but you should also consider it for products where size is difficult to visualize, like inflatable garden pools. When your customers know precisely what to expect, you reduce the risk that they change their minds and decide to return the product.
Source: Meller
Dynamic pricing
As you might remember, one of the common reasons for product returns is that the customer found a better price elsewhere. Can you do anything about this? It might come as a surprise, but yes, you absolutely can.
Many modern PIM systems come with some form of dynamic pricing feature that you can integrate with an artificial intelligence (AI) solution. The system automatically monitors your competitors’ prices on a given product and adjusts yours accordingly. If you want to be aggressive with your prices and always offer the very lowest, you can set your system to do so. On the other hand, if your store has unique selling points apart from the price, then maybe you’ll be satisfied with just staying within the average range.
You can’t expect this solution to fix the problem entirely, though. The systems have refresh timers, meaning that they scan the competitors’ prices, for example, every hour. If someone else offers a better price within this window, you might lose the sale. There’s also the bigger problem of prices dropping after the customer makes a purchase at your store. Sadly, there isn’t much you can do in this case apart from offering to match the price through a partial refund.
Gift cards as an alternative to unwanted gifts
Unwanted gifts are also a major cause of product returns, especially shortly after the holiday season. These purchases can go wrong in two ways. First, they can miss the mark completely, like gifting running shoes to someone who doesn’t do any sports and doesn’t plan on starting. Second, they might be close but not quite, like someone who actually needs running shoes but those exact ones don’t fit them.
Imagine you’re running a store for runners. In the first case that missed the mark completely, it’s pretty much a lost cause and the return can’t be avoided. The receiver of the gift wouldn’t ever visit your store on their own. But in the second case, you could reduce the number of potential returns by offering gift cards. They would be a great solution for customers who know they’re in the right place to buy their gift but don’t have quite enough info to pick the exact product. You can easily set up this function in nearly every PIM system and checkout solution on the market.
Precise inventory and shipping info
Lastly, let’s take a look at returns caused by the product arriving too late. This is largely out of your control since you can’t influence the carriers. What you can do, though, is manage your customers’ expectations by providing accurate information.
Depending on your PIM system of choice, you might have access to various integrations to set up in this area. Some form of inventory tracking and management, similar to Pimcore’s, is almost certainly available. This will make it possible to give your customers accurate, up-to-date information on the availability of products in your warehouse along with the time that you need to ship them.
You might also be able to set up integrations with the carriers you use. Thanks to this, you’ll be able to provide real-time info on when the customer can expect the product to arrive at their door. The advantage of setting up such an integration over a static page with estimated delivery times is that the information will be much more accurate. It can take into account factors such as distance, holidays, seasonal peaks, and so on to give a precise estimation.
Source: Ecwid
Just remember that, while you can’t control when the product arrives, you can provide your customers with all the information they need to manage their expectations accordingly. This can be another big factor contributing to reducing the return rates.
Key takeaways: there’s a lot you can do to reduce return rates with a PIM system
When used to its full potential, a PIM system can be hugely helpful in reducing the product return problem. It can help your customers make informed decisions because it improves product descriptions and makes the products themselves easier to find and compare. It can also help you manage customers’ expectations through reviews and accurate information about availability and shipping time. Finally, it can help you be more competitive in terms of pricing.
Of course, not all of the methods mentioned here might be applicable in your case. Likewise, there might be different ways not mentioned here that will work for you. I’m writing this article to serve as an inspiration more than a complete guide because every business is different and faces a unique set of challenges.
If you’re thinking about which solutions to try first, you should start with diagnosing the problem. Take a look at what products tend to get returned the most and for what reasons. This will give you an idea about the areas you should prioritize when improving the situation.
Published July 18, 2023
