With razor thin margins, a return leaves an eBay seller out of pocket. The same is true of larger retailers, or course, but for the individual seller it’s personal. They care because it’s their money.
Not only is it the cost of lost product and postage that hits the seller, the eBay ratings system means that a seller’s future trustworthiness and margins may be impacted by a return. Customer experience is quantified. Good sellers achieve better prices than unknown or poor scoring ones, so maintaining ratings are really important.
Returns send a chill through their hearts in a very direct way – and experienced eBay sellers have devised tactics to avoid them. Some of these tactics are also highly applicable to larger sellers and correlate to how Clear Returns helps tackle returns in larger, complex organisations.
Pain in the wallet drives prevention
The thing that hits an eBay seller’s wallet hardest is the non delivery claim. A seller has to balance low postage costs to stay competitive, with the more expensive certainty of a signature. Plenty of items are sent without any proof to protect the seller and whatever has gone wrong, the buyer always get the benefit of the doubt. The seller has lost their product, shipping costs, has incurred eBay and Pay Pal costs and is thoroughly out of pocket. But a seller can’t afford to risk their reputation, ratings and right to sell on eBay by obstructing the return, even when a seller suspects a buyer is exploiting that with false claims.
One way eBay handles this – something Clear Returns has also tackled in a different, more appropriate way for multichannel retailers – is to allow sellers to block potential purchases from future transactions. This in theory helps prevent bad buyer behaviour escalating – at least with the same seller. The seller community also effectively polices buyers, and buyers are rated in the same way as sellers. A buyer with repeat suspect behaviour may find themselves blocked, meaning genuine buyers and sellers both benefit.
Not all customers return equally
When a good customer misses out on a buying product because it is out with a known fraudulent shopper (who is less price sensitive than the customer who was planning to keep it) but retailer and shopper lose. The way Clear Returns has brought this important customer level actionability to large retailers is through our predictive data platform, which scores and segments customers based on what they keep, then allows automated service responses during and post transaction. The return can be prevented before it occurs.
Good shoppers having a bad experience can be better serviced, fraudulent returners and particularly wardrobers can be effectively blocked. The seller is protected, good shoppers stop subsidising the cost of fraud – and get an improved overall experience.
Closing the expectation gap
The eBay seller has to reduce the risk of surprises for the buyer in order to minimise the likelihood of a return. While this is more complex for enterprise retailers, at its heart the challenges are the same
Apart from delivery issues, an eBay seller is most vulnerable to those returns caused by expectation gaps and quality control issues. They are are not obliged to offer refunds because something doesn’t fit - only if they fail specifically to deliver on a promise. Providing good measurements and fit information will cut down on questions and get a better sale price, because it reassures the buyer - but ultimately the buyer chooses what they are prepared to pay for something that may or may not fit.
What the seller has to do is reduce the risk of surprises for the buyer – with good descriptions, correct labelling information, images from multiple angles – and most important of all, highlighting and photographing any flaws or faults. After delivery issues, undisclosed flaws and mis-description are the key causes of returns. And as many retailers will recognise, the nearer the top of the price range the item sells at, the less toleration the customer has for product issues.
Awareness of the scale of the problem drives action
Because the eBay seller feels the pain directly in their pocket, and because for the most part they have a very simple supply chain and touch most parts within that process, their hands on tactics for reducing returns have become pretty sharp. The data is very real to them, even if once the return occurs, they have little choice but to understand why and ensure the same thing doesn’t happen again.
The enterprise process is far more operationally complex – yet at its heart the issues are the same. First the scale of the problem needs to be understood - from data comes insight, then action. It is by closing the expectation gap, spotting problem products, tackling the major cost points and differentiating problem customers from the majority of good shoppers that ultimately determines profit.