eCommerce Returns
Updated August 14, 2021
For online businesses, returns are a burden and impact the bottom line. Many new store owners and print on demand stores don’t plan for returns in advance, and are faced with cash flow and supply chain issues as a result. Shopify released survey data around online store returns and listed these categories as having the highest return rates:
Top reasons for returns
Size too small: 30%
Size too large: 22%
Changed my mind: 12%
Style: 8%
Not as described: 5%
Defective: 5%
Other or not specified: 18%
Logistics carriers and label costs
Leading carriers: USPS (81%), UPS (11%), and FedEx (6%)
FCM is top mail class (47%) and PM (33%) is second
Effective average cost of a label is around $6.75
Across all Shopify businesses, 65% of refunds are performed manually, 35% via apps.
Create a Returns Strategy
Refine Your Return Policy
While Shopify offers a free returns policy template, it’s important to read through and cater that template to your store. For example, if you sell custom products, you probably don’t want to accept returns because those products will be difficult to resell. Similarly, high end fashion can lead to wear-and-return fraud, so many formal wear brands choose more strict returns and exchange policies.
Determine Your Return Rate
In order to understand the problem returns are creating for your business, you should calculate the cost of returns to your business. Saara, the creator of EcoReturns, is an eCommerce returns expert and has created an online returns calculator to let store owners easily calculate product return rate.
Monitor Returns Analytics
To keep a handle on returns on an ongoing basis, plan on continually monitoring your returns performance. There are multiple return analytics that you can calculate on your own, or using a return analytics app like EcoReturns.