Returns are costing retailers $890billion a year. That’s the conclusion of a 2024 National Retail Federation (NRF) report. Other studies have found that e-commerce returns are costing the sector over $200bn worldwide (O’Brien, 2024) and £27bn in the UK. And while an average 30% of products bought online are returned compared to 8.89% of those bought in-store, when it comes to fashion items that figure rises to around 40%.
Providing a convenient returns service is non-negotiable for e-commerce fashion retailers that want to retain customer loyalty, so how can you make sure it doesn’t eat too far into your profits? In this article we look at ways to reduce your returns burden, the importance of a well-managed returns strategy, what good looks like and the benefits it can bring to e-commerce brands and customers.
Why retailers need a good returns system
You can minimise e-commerce returns by giving your customers what they want in the first place. That means removing all the obstacles to a satisfying customer experience, such as inaccurate or slow order fulfilment. Make sure you’re working with a reliable 3PL so that orders are carefully picked and well packed and delivery services suit the end customer. And embrace technology and customer feedback to ensure that product descriptions, sizing options and imagery of the products are accurate and consistent.
That said, returns are still an intrinsic part of e-commerce shopping behaviour, for now at least, and so the integrity of your returns strategy is crucial. Since the pandemic, the cost of returns to the retail sector has doubled. Customer behaviour has changed. More than a quarter (27%) of fashion customers overorder so they can be sure of getting the size and colour they want. That means your returns service is becoming as important as your sales in terms of customer experience.
A returns policy that meets customers’ needs and expectations directly influences purchasing decisions. As well as building trust in your brand, it gives buyers confidence that returns will be easy, which in turn makes them more likely to buy. This is particularly true of online shoppers, who don’t get to touch or try on the product before purchasing.
The importance of a hassle-free returns policy is highlighted in recent research. One survey has found that 67% of e-commerce customers check the returns policy before completing a purchase. If it is flexible and easy, they are more likely to buy. The NRF survey found that 84% of shoppers will not buy from a retailer again after a bad returns experience.
So what does a good returns policy look like?
The components of a good returns policy
What are customers looking for when they read your returns policy? They want to know:
- Time: how long have they got to send items back?
- Cost: do you charge to take items back or is it free?
- Convenience: do you offer collection services or do they need to drop off their returns, and where?
- Speed: how quickly will they get their refund or exchange?
- Communication: will they be able to track their returns?
- Sustainability: what do you do with returned items that can’t be resold?
For fashion brands, the returns service needs to match the quality of the products. That means providing your customers with more choice, more visibility, more convenience, faster refunds and complete satisfaction.
Meanwhile, in order to meet your business goals, it needs to be cost-effective, customisable, fully trackable, efficient, easily integrated with your systems and environmentally responsible.
The returns service we’ve developed at ILG is designed to answer all these questions to the customer’s satisfaction, while streamlining the process for our fashion brand clients.
How ILG is meeting returns expectations
Rather than focusing on just one part of the process, we provide a seamless, end-to-end service that combines logistics, processing and customer communication in one.
We make it easy for customers to return items, with simple return labels, more choice and clear instructions. This is all done through a fully branded returns portal, making the process completely seamless for the end customer. We handle the logistics of those returns, often with real-time tracking for both customers and businesses to ensure transparency throughout the returns process.
On receipt of returned items, we check their condition and ensure that they are either restocked, recycled or disposed of in an environmentally responsible manner, helping our clients to meet sustainability goals and customer expectations. We can even book stock back in before it has arrived at our fulfilment centre, ready for swift resale.
Along the way, we support our clients’ customer service teams by automating return authorisations, tracking and communication. This allows you to tailor the solution to your specific needs (e.g. free returns or charged for returns) and set your own return rules – this helps to reduce the cost and complexity of returns.
We offer our clients detailed reporting and analytics, allowing them to constantly monitor and adjust their returns strategy by tracking return rates, reasons for returns and operational efficiency.
This is a truly global solution – important for fashion brands with customers worldwide. While many returns services have a limited reach, our simplified returns process extends across multiple regions giving brands access to:
- 200+ returns options in 195 countries
- 320,000 global drop-off locations
- Localised in 35 languages
- Electronic customs declarations for duty relief
Returns as a selling point
This is the level of service that fashion customers are looking for today. They expect to be able to over-order, choose the items they want to keep, easily return the items they want to send back, get refunded quickly and receive timely updates on all of these stages. This has become standard online shopping behaviour. A basic returns service will not suffice.
The onus is on e-commerce fashion brands to find a returns solution that improves customer satisfaction while reducing the cost burdens. Our service provides genuine market differentiation while reducing operational costs. For the brands that are already using our returns service, we have achieved some notable benefits:
- 40% reduction in customer enquiries
- 57% reduction in returns costs
- 50% reduction in time to get goods back in stock
By providing a more integrated, flexible and customer-centric returns service, with added emphasis on global scale, sustainability and data insights, we’re helping our fashion e-commerce clients to make returns a stand-out selling point.
Find out more about our fashion fulfilment services or get in touch today.
Contact Us
More insights >
Celebrating Excellence and 35 Years of ILG!
ILG gathered to celebrate not only our annual Awards for Excellence but ILG’s 35th birthday! Here are the winners for 2024.
A Guide to UK Market Entry for Canadian Brands
Canada’s traditional export routes have been radically changed recently and the UK market could be a good alternative to the US. Read our guide to UK market entry.