How do e-commerce companies manage online returns?

Returns policies are a key battleground among online retailers for customer loyalty, since customer satisfaction is one of the most important metrics in business.

Yet a recent study by Snow Valley found that many UK web firms provide unclear or hard to find instructions for consumers that want to return purchased products.

Is there any benefit to this approach, when we know that highly visible policies can engender trust, helping to boost conversion rates?

After the jump, let's look at seven ways of improving your returns policy / strategy...

• A hassle-free returns policy
  Customer experience is vital here. It is not worth haggling over returns and losing repeat business. If a customer can see that you have a clear, no-hassle policy, they will be much more likely to buy from your site.
  
  Amazon is a good example of this. It will return goods bought in the last 30 days whatever the reason, as well as picking up the postage costs.
  
  Also, if you have such a policy, make this clear on your site and product pages. This could mean more sales.
  
  
• Pay the postage costs
  As with the previous point, making it as easy as possible for customers will mean they will shop again with you, even if the particular product they bought is not suitable.
  
  Another method is to actually pick the goods back up from the customer's house, something which Argos does.
  
  
• Let customers return the good to a retail outlet
  If you are a multi-channel retailer, then it makes perfect sense to give customers the choice of posting the goods back, or taking them to their local store.
  
  A survey last year found that 57% of  US shoppers wanted the ability to return or exchange products in-store, regardless of whether they had bought them from a website, catalogue or shop.
  
  
• Display the returns policy clearly
  This is a dealbreaker for many online shoppers. If they are unsure about how an item will look when they get it home, not sure if it will fit, and so on, then the knowledge that they can easily return the item could clinch the sale.
  
  Ideally, customers should be able to find your returns policy from a link on the homepage, and the policy should be shown, or easily accessible from the product pages.
  
  
• Include returns instructions in packages
  By including details of the return policy in the goods sent out, then customer will not have to search the website, or phone customer services to find out what to do.
  
  
• Keep customers informed
  As with deliveries, confirm to the customer when their returned item has been received, and when a replacement will be sent out, or the refund paid. This will save customers the hassle of contacting you about the issue, and they will appreciate the information.
  
  
• Send them two sizes, and one postage-paid returns envelope!
  We know of one highly savvy apparel retailer that sends out not one, but two products, every time a purchase is made. The consumer is instructed to choose and keep the best fit, and to send back the other size in a pre-paid envelope (or box). The rationale is that while there is a margin trade-off for processing these 'returns', it is better to win new customers this way, especially if you can keep them coming back for more.

Agree? Disagree? What have we missed? How big a problem are returns in the world of online retail? Please leave your comments below...

Related research
Online Customer Service Solutions 2007

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