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A decade ago, Nordstrom was the gold standard for purchaser-friendly return policies. Customers could return items within any period of time, in any condition, with or without a receipt, and the department store sales reps would pretty much always find a customer-satisfactory solution. Today, though, Nordstrom has been supplanted—and not because its service has gotten worse. Amazon has taken the throne for a simple reason: consumers are flocking to online retail, and Amazon provides two things its competitors don’t: two-day shipping and completely electronic, rapid returns.

Ecommerce Birthed A Culture Of Returns

In 2015 the total merchandise returns accounted for over $260.5 billion in lost sales for U.S. retailers. Returns have increased by over 50 percent in the past eight years, and customers are now more likely to purchase items if a company has a hassle-free return service. This demand and preference for easy returns is particularly ubiquitous online, where items are 21 percent more likely to be returned.

This culture of returns developed as a response to the advent of ecommerce. The value proposition for ordering online increases dramatically if customers can return an item because it doesn’t fit right, isn’t flattering, or has some flaw. Recognizing this, companies like Amazon, whose entire business model hinged on consumers wanting to buy things online, made returns easy to conduct from home. Click on a past order, print a slip, bring item to the post office. Don’t want to go to the post office? No worries, for a few dollars, UPS will pick it up at your door. Don’t have a printer? Pay $1 and UPS will print it for you.

Amazon and other ecommerce retailers essentially made returning items easier than just going to a store and trying on some shoes before buying them. And with over 300 million active customers, it’s no wonder that this process has set consumer expectations pretty high.

The Post-Holiday Return Rush Has One Victim: Customer Service

While the expectation that items can be quickly and painlessly returned is great for consumers, it presents major reverse logistics problems for retailers—especially during the holidays. In 2015 the holiday return rate was two percent higher than the annual return rate, and one out of every three gift recipients returned at least one item after the holidays. In 2016, returns peaked on Jan. 2nd, and were a full 35 percent higher on that day than the next busiest day, Saturday Jan. 9th. If your company doesn’t have a seamless system in place for doing online returns, this post-holiday onslaught will have one major casualty: customer service.

Even if your company has a hassle-free portal for conducting returns online, customer service agents are likely to have an increase in ticket requests just from people who don’t know how to find the portal. That’s why it’s crucial that customer service teams have:

1. Searchable FAQs

Ninety percent of customers already expect that a business has a self-service center—and providing one doesn’t just increase customer satisfaction, it also decreases ticket volume. Let your customers find the returns portal on their own with intelligent, searchable FAQs.

2. Pre-populated Auto Responses On Chat

Anticipate the spike in return requests by offering agents a pre-populated response in your chat system that tells customers where to find the returns portal.

While the uptick in return requests is sure to affect customer service, businesses that implement these two features can mitigate the costs associated with higher ticket volume.

Looking Beyond The Holidays To An Ever More Demanding Returns Culture

As ecommerce continues to gain traction and popularity over brick and mortar stores, consumer expectations around returns will only increase. And if your company doesn’t have both an online system for processing these returns and customer service automation to direct customers to these processes, the costs will be steep. As the holiday season approaches, online retailers will need to embrace our culture of returns if they want to remain competitive.

Published October 18, 2017
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