The rate of
eCommerce returns in India is pegged at 25-40% during the festive time. As the market gets more crowded and consumers have more options, here are some main statistics to know when drafting up your refund and return policy.
Important facts on E-Commerce returns in India
Smaller D2C brands have not yet started paying attention to the invisible costs that are generated because of a high rate of returns.
Larger brands have the luxury of providing lengthy return periods that range from 30-60 days to their customers. However, for smaller brands, it becomes difficult to track and account for the returned goods and the costs associated with them.
In fact, these invisible costs keep eroding your company’s bottom line and reduce profits by as much as 25%.
The costs involved when a product is returned:
Logistics cost – These costs include expenses for return shipping, warehouse, restocking and reserving charges
Damaged goods: Damaged goods cannot be resold hence the D2C brand would need to dispose of them
Faulty products: Can be repaired, but the repairs need extra additional charges
Reselling the product: You need to restock it, repackage it and refurbish it to resell it as an “as good as new” product.
Apparel is the highest-returned product
Did you know 19% of consumers buy apparel in different sizes, shapes and fits, with the sole intention of choosing their best fit and returning the others? Not taking this into account can severely impact a business’s cash flow.
Reverse logistics businesses on the rise
As consumer consciousness grows, customers become more picky and choosy about what they want. Studies suggest 92% of people only buy a product because of its easy and free return policies.
The scope of easy and quick returns right from our doorstep has increased the return rate in countries like India. Another factor that has contributed to this is that India is one of the few countries that include free shipping services in their delivery and return policies.
Some small D2C brands sometimes put in limitations because of budget constraints. For example, some brands would require the customer to drop off the product at their nearest postal service or would charge extra fees for the return/exchange process.
Clear product descriptions
The customer should get as much information as possible just from the product description. More than the title, the description should tell the customer important things like:
- Size and dimensions of the product
- Use cases of the product
- Materials used
- Extra care tips, if any
- Where did the product come from
- Is the product safe and non-toxic?
Here is a complete guide on writing informative product descriptions for selling online so that customers feel like they bought the exact item they wanted.
High quality and unedited pictures of the products
Indian online customers have high standards when it comes to the product they have ordered. Low-quality products or products that look different than what was promised have extremely high return rates.
Transparent return policies
- It is crucial that online stores have a clear transparent return policy stated. As an online seller, you have the complete right to not exchange, refund or resend a product if you had clearly mentioned the terms and conditions of the return on the product landing page.
- It also helps the customer decide whether they really want to purchase that product based on the return policy. You might end up losing out on revenue if the customer doesn’t purchase the product.
- However, in the long run, you are saving up on costs that are incurred when handling product returns.
- An informative, transparent and detailed return policy helps you get more intentional sales on your online store while also decreasing your return rate significantly.
Reduce wastage
Damaged products often go into landfills that pollute the environment. The multiple efforts to ship and deliver to the same location contributes to more pollution and fuel consumption.
Additionally, repackaging and refurbishing the goods also result in a waste of resources. - Try to put quality checks in place at each stage of the supplier and delivery chain to reduce return rates in the long run.
- You can also develop a network of resellers and up sellers that can directly take the unused or damaged products from third-party fulfilment centres.
You can keep track and flag customers that have shown “bad behavior” by repeatedly cancelling ‘Cash on Delivery’ orders, or returning orders frequently without reason.
Created & Posted By Suraj Kumar
Paid Assistant at TAXAJ
TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are:
Launch Your Start-Up Company/Business,
Trademark & Brand Registration,
Digital Marketing,
E-Stamp Paper Online,
Closure of Business,
Legal Services,
Payroll Services, etc. For any further queries related to this or anything else visit
TAXAJ
TAXAJ Corporate Services LLP
Address: 1/11, 1st Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078