So You Process Returns for Your Online Store
We show you the best tips and tools to optimize your return management.
If you are online retailers and sell your products in your own online store, two topics will probably become increasingly important to you: Rising customer requirements for the buying experience and the steady increase in returns. The latter is a topic that no online retailer likes to deal with, as they represent an additional effort and thus reduce your company's profit.
That's why returns management is becoming increasingly important for companies. Through new approaches, you can reduce the resulting costs and optimize your internal processes. Similarly, you can stand out positively from the competition through smoother returns processing and strengthen your customer loyalty.
In this article, you will learn what returns are and what legal bases exist for them. In addition, we take a look at why items are returned and what this means for customers and retailers. Furthermore, you will learn how the returns process works, how you can optimize your return rate and which returns management software can support you in this.
Table of Contents
1. What are returns and what are the legal bases for them?
2. These are the reasons for returns
3. These are the significance of returns for retailers
4. This is how returns are processed and subsequently used
5. You can reduce your return rate and avoid returns
6. These tools help you manage your returns
7. Returns help you get better
What are returns and what are the legal bases for them?
A return refers to the step of returning products ordered on the internet within a purchase process. The legal basis for a return is §312 ff BGB. This is where the former Distance Selling Act is anchored. This states that buyers have a right of withdrawal pursuant to §355 BGB for contracts concluded outside enclosed business premises. At first, this sounds a bit confusing because of all the paragraphs.
In the end, this means for you: when consumers shop for items in your online store, they have a right of withdrawal for 14 days under the German Civil Code, as they cannot inspect the products before purchasing. Within this period, the buyers can revoke the purchase contract concluded with you without giving reasons. The corresponding article must then be sent back and the purchase price refunded. However, there are also exceptions to the right of withdrawal if the goods were individually made for the consumer. This is regulated in § 312g BGB.
These are the reasons for returns
You have probably already experienced that returns can not be avoided. The reasons for this are diverse: You can differentiate between customer-related and retailer-related returns as well as errors of the shipping service providers. A customer-sided online return can have following reasons: The ordered clothes don't fit, they look different than you have represented them in your shop or the customer has ordered them in different sizes in advance. In addition, product defects and incorrect or missing deliveries can be reasons for returns. Sometimes your customers have simply accidentally put the wrong products in the shopping cart.
Retailer-side returns occur, for example, when the package recipient's address was incorrectly transmitted to the shipping company or a poorly packed package led to the damage of the item. But errors can also occur with the commissioned shipping company, which lead to the unwanted process of returns processing. This is the case when the package remains in the logistics center and is not delivered or is damaged by an employee during delivery. Sometimes, however, the loss of the delivery notification can also lead to a return.
Returns help you get better. This is the significance of returns for retailers
According to current studies, a return costs retailers an average of €15.18 plus the incurred transport costs. Of this, €7.93 are attributable to process costs and €7.25 to the loss of value of your product. Your employees can't create any additional values, but they have to reverse a purchase already booked. You also couldn't sell the returned product to other customers in the meantime, which is why it's now reflected in your inventory as operating costs.
But you should view returns not just as pure effort and additional costs. It's in the area of returns management where the most intensive exchange with your customers takes place. Therefore, returns management is a great opportunity to better understand your customers and thus increase loyalty to your company in the future. But your handling of returns also works for your customers in the other direction: A negative experience with a return in your online store can lead to consumers considering twice next time whether they want to go through the stress again. If in doubt, they'll refrain from doing so and you'll lose the corresponding income. For this reason, you should pay special attention to your company's returns management.
This is how returns are processed and subsequently used
Your customer has unfortunately decided to send the ordered item back to you. In order to process the return accordingly, there are different possibilities. You can, for example, set up the process so that the buyers have to request the return slip from you by phone or email. At the same time, you can directly ask what the reason for the return is.
The classic return slip, on the other hand, is included directly in the package. In case of a return process, the returners fill out the document and attach the corresponding return reason such as 'Item does not suit' or 'Item is too big/small'. This solution is much more convenient for your customers and also less effort for you.
The easiest processing runs via a returns portal. Here, retailers and customers alike can benefit, as everything is handled and documented online. From such a portal, you as online shop operators can also export corresponding reports that are interesting for your corporate strategy.
This is how an optimized returns process can run in your company.
After it's clear that your customers are returning the goods, you must refund them the purchase price or update the invoice within 14 days of withdrawal. The earlier this happens, the better it is for your consumers. The next step is an inventory: Is the item damaged? If so, can it be repaired or does this exceed the value of the goods? If there is no damage to the products, they can be reintroduced into the sales loop without you having to reduce the price.
Some retailers decide to offer returned items, which may be damaged but still functional, as B-goods on marketplaces such as Amazon or Ebay. In this case, the indicated price is based on the condition of the products. You can also offer these items for a reduced price in your own online shop. This gives your customers an attractive offer and they can buy the product directly from you, which in turn has a positive impact on customer loyalty. But with this option, make sure you communicate clearly what flaws the products may have, so that there's no return from the buyers.
These possibilities are much more sustainable than handling returns in many parts of the clothing industry. There, returned clothes are often simply shredded, as it would be more expensive to make them ready for shipping again. You can and should avoid this scenario through optimized returns management process.
You can reduce your return rate and avoid returns
As varied as the possibilities for handling returns may be, you would probably prefer to avoid returns and reduce your return rate. You calculate this by dividing the number of shipped packages by the number of returned packages.
But what possibilities do you have to reduce the return rate? If you know the main causes of returns in your online store, you can optimize your returns management accordingly, which means you can develop targeted measures to reduce returns. Based on this knowledge, you now look at which returns could have been avoided and which not. Often insufficient product descriptions or photos, as well as errors in logistics, are the reasons for returns. You can avoid this type of returns through the following measures:
- adjust the product descriptions, photos and videos in your online store
- improve the consultation quality for explanation-needed items
- publish customer and product reviews
- display product-specific FAQs
- critically review the quality of your own products
- examine the shipping process and the commissioning
- obtain better packaging material
- operation quicker deliveries
- check the quality of the suppliers
But there can also be unavoidable reasons for returns. Then you can have your customers pay the return shipping themselves or include the return costs directly in the price calculation for your products. In any case, it helps you and your company if you implement a standardized return process. If this process, as far as possible, takes place digitally, you can save time and money. A system for return management can help you with this.
These tools help you manage your returns
So that you can process returns faster and thus more cost-effectively, we present you the following shop systems and shipping softwares that simplify the sale and disposal of your products. Here you can also read more about the best shop systems.
The best tools for your returns management are:
- Shopify
- Spryker
- Shopware
- WooCommerce
- Sendcloud
- shipcloud
- LetMeShip
1. Shopify
With Shopify you can easily build and manage your own online store. The cloud-based omnichannel shop system is now one of the 'largest e-commerce companies in the world' and is used by more than 1 million companies, according to the company. The tool offers you various shop themes and various apps to expand your shop, a fully equipped content management system and payment by credit card. You can also create various reports about the performance of your shop, claim automatic shipping costs from leading shipping service providers for you, manage the shop conveniently on the go and offer subscriptions. When it comes to returns management, you can simply refund part or all of the payment to the previously selected payment method, with your inventory automatically adjusting. In case of questions, a dedicated support team is available to you, which can support you around the clock if necessary.
Shopify Costs
- Shopify Light: €10 per month
- Basic Shopify: €27 per month
- Shopify: €74 per month
- Advanced Shopify: €279 per month
- Shopify Plus: Costs on request
Shopify Alternatives
On OMR Reviews you can view alternatives to Shopify. Based on real and detailed user reviews, you can select the returns management software that fits your company.
2. Spryker
The e-commerce platform Spryker calls itself a tool that helps companies to become digital leaders in the B2B, B2C and marketplace business. It offers you more than 450 API-based modules and an agile, dynamic approach. With Spryker, optimization of your processes and maximum flexibility for your business take centre stage. The software relies on comprehensive tracking and modern empirical analysis methods, the results of which can be centrally stored in an integrated data warehouse.
Spryker Costs
The license costs for Spryker amount to at least €100,000 per user license per year. You can request detailed cost information via the website.
Spryker Alternatives
On OMR Reviews you can view alternatives to Spryker. Based on real and detailed user reviews, you can select the returns management software that fits your company.
3. Shopware
The next tool we want to introduce is Shopware. This shop system, with which you can map the complete sales process from order entry to your online shop returns, calls itself a 'future-proof e-commerce solution' that convinces through 'more flexibility and less complexity'. With Shopware, you get a modular shop system from which you can quickly and easily build your own online shop. You can adjust the software by different features so that it works best for you and your customers.
Shopware Costs
- Starter Edition: €0 per month
- Professional Edition: €199 per month or €2,495 one-time
- Enterprise Edition: €2,495 per month or €39,995 one-time
Shopware Alternatives
On OMR Reviews you can view alternatives to Shopware. Based on real and detailed user reviews, you can select the returns management software that fits your company.
4. WooCommerce
The probably most used online shop system runs under the name WooCommerce. This tool is based on WordPress, which is why it is the most obvious solution for website owners who use this CMS system. It can be extended by countless plugins and themes, which make the handling of your orders from A as order, over R as return, up to Z as payment easier for you.
WooCommerce Costs
The shop and returns management system WooCommerce itself is free. However, you have to pay for themes and extensions if you want to customize your shop.
WooCommerce Alternatives
On OMR Reviews you can view alternatives to WooCommerce. Based on real and detailed user reviews, you can select the returns management software that fits your company.
5. Sendcloud
Sendcloud is a shipping and returns processing tool for your online store. The software provides you with connections to 80 different shop systems and marketplaces. These include Shopify, WooCommerce, Shopware, Amazon, Wix and Magento, among others. Sendcloud's goal is to increase the competitiveness of the retailers. This is ensured by rethinking and optimizing the shipping route from check-out on your shop page to a possible return.
Sendcloud Costs
- Essential: €0 per month
- Small Shop: €40 per month
- Large Shop: €89 per month
- Business: from €179 per month
Sendcloud Alternatives
On OMR Reviews you can view alternatives to Sendcloud. Based on real and detailed user reviews, you can select the returns management software that fits your company.
6. shipcloud
The shipping service provider shipcloud offers you an interface to many international shipping service providers, from DHL, DPD and Hermes to ANGEL Last Mile and Post AT. The cloud-based shipping platform supports you as online shop operators in optimizing your shipping costs, saving costs and time and increasing customer satisfaction.
The return management and shipping tool has a RESTful API and over 130 integrations for shop and merchandise management systems. The software aims to enable uncomplicated integration into existing retailer systems. You can automatically create and track shipping labels in shipcloud.
You don't have to commit to one shipping service provider, but can use different package services at the same time. Your customers can select their desired shipping service themselves in the ordering process, which can result in higher customer satisfaction for you in terms of possible returns.
shipcloud Costs
- Professional: €29 per month plus €0.06 per shipment
- Business: €89 per month plus €0.05 per shipment
- Enterprise: €199 per month plus €0.04 per shipment
- Individual: Prices on request
shipcloud Alternatives
On OMR Reviews you can view alternatives to shipcloud. Based on real and detailed user reviews, you can select the returns management software that fits your company.
7. LetMeShip
LetMeShip is a shipping platform that provides you with a transparent overview of the services and shipping conditions of different package services. Through this shipping software, you can execute the corresponding shipping and process it smoothly. The tool's goal is to provide you with competitive advantages in the form of cost and time savings. You can also use additional features such as proactive tracking, an online shipping archive, business intelligence reporting and customs handling.
LetMeShip Costs
The costs for LetMeShip must be requested directly via the company's website.
LetMeShip Alternatives
On OMR Reviews you can view alternatives to LetMeShip. Based on real and detailed user reviews, you can select the returns management software that fits your company.
Returns help you get better
Even if returns may seem annoying to you as retailers, unfortunately, you won't be able to avoid them. However, by analyzing the most common return reasons in depth, you can initiate appropriate measures to reduce your return rate and process returns in a targeted way.
The appropriate returns management system helps you optimize and digitize these processes, thereby saving time and money and making your customers even more satisfied.
Carolin ist freie Redakteurin bei OMR und mit ganzem Herzen Autorin. Als Brand Managerin war sie bereits bei verschiedenen Unternehmen aus der FMCG-Branche für das Marketing zuständig. Währenddessen hat Carolin berufsbegleitend Ihr Studium zur Marketing-Betriebswirtin abgeschlossen.
