Returns. For most retailers, they’re a headache—a necessary evil that chips away at profits. The kinder your terms, the greater your loss, especially with stay-at-home shoppers using them to browse at will.
In fact, the SAP Industry Market Report for Retail shows 33% of U.S. shoppers buy multiple items intending to return some. Flexible return policies are a must or you’re kicking out a third of your customers.
But what if returns weren’t just a cost? What if instead you saw them as an opportunity to drive customer loyalty, increase foot traffic, and even create new revenue streams?
It’s time to reframe returns, and change them from a drain on resources to a profit-making machine.
From pain point to profit center
It’s worth pointing out, returns really are a hassle. They mean extra labor, potential loss of inventory value, and the risk of unhappy customers. But they’re also a critical customer touchpoint for engagement and retention.
Modern retail is shifting toward omnichannel shopping, offering new ways to manage returns effectively, and allowing customers to buy online, return in-store, and vice versa—ultimately making the process smoother for customers and easier to manage for retailers.
This is the sort of thing that drives both loyalty and revenue, while building competitive advantage. Small wonder that 65% of retailers now offer in-store returns for online purchases, underscoring the value of a unified, omnichannel returns process.
If you’re ready to monetize returns, here are five strategies to consider:
- In-store return bonuses: Encourage customers to return items in-store by offering a discount or bonus on their next purchase. This drives foot traffic and boosts the chance of additional sales.
- Green returns and second-chance sales: Sustainability is a major value for today’s consumers. Offering carbon-neutral shipping or slower, eco-friendly return options can attract conscious shoppers. Refurbishing and reselling returned items through a “second-chance” program also helps recover value from products that would otherwise go to waste.
- VIP and membership-based return programs: Consider offering premium return services, like free returns or faster processing, as part of a membership program. This provides a revenue stream and builds loyalty with high-value customers.
- Damage control with repair and refurbish: Not every return is unsellable. By cleaning, repairing, or repackaging items, you can resell them at a discount and recover some of their value. This approach not only recoups costs but appeals to bargain hunters.
- Data goldmine: Returns data holds valuable insights into customer preferences, product issues, and buying behavior. By analyzing this data, you can improve your offerings, optimize inventory, and even personalize marketing to reduce future returns.
Retail gone green: Watch the demo HERE.
Hot take: The untapped goldmine in returns
Here’s the simple truth: customers value convenience. A seamless returns experience makes them more likely to shop with you again. The SAP Industry Market Report for Retail emphasizes that by viewing returns as part of the overall customer journey, retailers can leverage them to build trust and loyalty.
Imagine offering perks for in-store returns, such as discounts on new purchases, or using return visits as a way to showcase additional products. This approach doesn’t just smooth the returns process—it creates a sales opportunity.
According to SAP data, the average return count per consumer is 8 items per year. Returns are an underappreciated – and constant – touchpoint in the shopping journey.
They can also be used to gather critical data and insights. Why are people returning a certain product. Is there something wrong with it? Has there been a trend shift? With AI in your toolbox, these learnings can be had quicker than ever, with automated surveys, optimized inventory, and personalized marketing.
Opportunity: Building loyalty with flexibility
Not all returns are created equal. Today’s shoppers expect flexibility, and they appreciate retailers who deliver it. This is especially important with omnichannel returns, where a unified experience across platforms is key. Retailers that offer easy, flexible returns across both online and in-store channels stand out in a crowded marketplace.
The report points to a big opportunity for mid-size retailers here: by creating an effortless returns process, you can attract new customers and retain existing ones. Think of returns as a moment to re-engage customers and turn those frowns upside down, not just process their transactions.
Say it five times, fast: Rethink returns, reap rewards
So if you’ve been thinking of returns as a drain, it’s time to shift your mindset. The right returns strategy is a powerful tool for boosting loyalty, engaging customers, and even driving sales. With omnichannel returns, you’re not just managing logistics—you’re enhancing the customer experience.
So why not take a fresh look at your returns process? Implement a strategy that aligns with your brand values, supports your bottom line, gathers data and keeps customers coming back. The future of retail returns is flexible, customer-centric, and—if you play it right—profitable.