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Why returns are costing you more than you think

Sales are sexy, but returns? Not so much…

It is easy to dismiss returns as someone else problem - someone in operations or the warehouse maybe.

But helping your customers keep more of what they buy is every retailers business.

Returns kill profits - and not just due to operating costs, but also because the impact of a return on customer experience and lifetime value can hit future revenue. If a problem product hits a new or high value customer, the impact is felt right across the business.

As this infographic highlights, the costs associated with handling a problem product are only half the story:

The costs of acquiring a customer in the first place are rarely factored in to returns - yet some campaigns (like the one featuring this jacket) can directly cause returns.

But the real pain for retailers is the impact even a seamless return can have on customer experience.  Up to 80% of first time buyers never shop with a retailer again if they have to send back their first order.  That impact can be 2 - 10 times the operational costs of returns in the first year alone.

It is not really a sale until the customer decides to keep their purchase, so helping your customers keep more of what they buy - for example by spotting and acting on problem products and inaccurate descriptions - can only be a win win!


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