How Customer Product Returns Can Work In Your Favour

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For small business owners, it can be disheartening when a customer comes back to ask for a refund. But a product return can open doors to new opportunities. Here's how.

Customers may want to return products they have bought for a variety of reasons: they may not be happy with the quality, they may have changed their minds or they may already have the item and made a mistake. Regardless of the reason, it's not the most pleasant thing for small business owners to deal with. Even so, it's important to have an adequate return policy in place that complies with Australian Consumer laws.

Customer returns can also positive for small business owners as it gives business owners an opportunity to not only learn more about their clientele but to potentially upsell. That's according to Maria Haggarty, founder and CEO of Dotcom Distribution. She wrote on Entrepreneur:

  • Inventory and product development. Returns are a great opportunity to become smarter about what you sell. For instance, if an unusual amount of customers are returning clothing items because they are too large, you can identify a possible sizing issue with your manufacturer. Likewise, if shoppers return a high volume of turquoise purses, perhaps you have a coloring issue with your online display. Gathering information on the return side can help your identify trends and issues with your products and make the necessary improvements for future sales seasons.
  • Upselling. At the point of return, you can work with shoppers to transform potential returns into future business opportunities. For example, a customer may be open to exchanging his or her product for another size or color when given the chance. You can also upsell shoppers by communicating promotional codes or ongoing sales at the point of return.
  • Personalisation. Data generated from returns can offer unique insights about your customers that can inform personalization efforts. For instance, brands should work hard to retain customers who have returned a small portion of their orders through special offers and loyalty programs. Alternatively, a shopper who has placed many orders and returned almost all may not warrant the same outreach. Here, big data insights can help brands effectively personalize marketing content.
  • Social Media. A seamless returns policy can positively influence your brand on social, while a bad customer experience can seriously damage your brand reputation. Shoppers are willing to share great returns experience with their friends and family, and as 92 percent of consumers say they trust this kind of word-of-mouth marketing (WOMM), a single positive returns mention on popular social channels like Facebook and Twitter can lead to many more sales opportunities with new customers in the future.

You can read more about Haggarty views on the benefits of having a good return policy over at Entrepreneur.

[Via Entrepreneur]


Comments

    "Inventory and product development. Returns are a great opportunity to become smarter about what you sell. For instance, if an unusual amount of customers are returning clothing items because they are too large, you can identify a possible sizing issue with your manufacturer."

    Australian clothing retailers seem to have gotten worse at this over the years. Any evidence from stock levels seems to fly in the face of buyers' ideas that what Australia needs is more skinny, super-skinny* and ultra-skinny clothing*. (*both spotted in stores over the last week)

      Well there's nothing stopping you from buying cargo pants. Personally I'm glad for a better selection of proper fitting clothing that isn't 90's style baggy and daggy.

        There is a wide middle-ground between skinny and cargo that overseas retailers seem to negotiate with flair (not flares).

    Maybe they are dropping hints that people should lose weight

      Waist-size is not the issue - my skeleton barely gets through the arm and leg holes of skinny clothes. If you cut the sleeves/legs off then the rest would be fine.

    Great tips on making the best of a seemingly bad situation! I agree that businesses should take every opportunity to strengthen its relationship with customers. Businesses that work to build a rapport with their customers are the ones that see the most retention and loyalty.

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