3 tips for minimising Christmas ecommerce return costs

As Christmas approaches and online shopping continues to boom, Australian online retailers are encouraged to maximise their profits by enacting changes to their refunds and returns systems.

A survey by parcel delivery and collection point network, Hubbed, reveals that in 2020 over 35 per cent of Australians have returned online Christmas purchases.

“The financial costs of refunds and returns can be staggering for an online retailer,” says David McLean, CEO and founder of Hubbed.

“Poor refund policies can make online shoppers cautious, while poor returns systems can eat into profits and cost online retailers more than the original sale. Difficult returns processes can also impact a brand―if returning an item is just too hard, consumers will remember next time they’re shopping online and go elsewhere.”

With online purchases up 26.9 per cent year-on-year (YOY) for the 12 months to 31 July 2021 and Australian Retailers Association research showing 48 per cent of Christmas shopping is set to be done online this year, online retailers should start to prepare for the flow on effects of managing returns.

The logistics of managing returns is just one aspect of ecommerce operations to consider. The associated costs of shipping, returning and preparing a refunded item for sale can reduce profits significantly once all associated returns processes are considered.

McLean shares his top tips for minimising Christmas ecommerce return costs:

1. Ensure you have a strong refund policy in place. A sound returns policy gives confidence to the buyer and can be the difference between converting a visitor to a customer.

2. An easy-to-follow returns model. A streamlined refund process complete with clear instructions for returning purchases offers peace of mind and helps combat buyer hesitancy.

3. Consider collection points. Identifying a convenient returns drop-off location can improve purchase return logistics and reduce retailers’ costs in several ways. Couriers offering large volume pick-ups from one location are quicker and cheaper than retail postage, as well as being more environmentally sustainable as there are fewer delivery trips being made.

In addition, retailers can offer a refund as soon as a parcel is secured, ensuring a better brand experience.