02 Aug Average Return Rates for E-Commerce Businesses
You would expect a website owner to get a higher rate of return than a brick-and-mortar retailer. After all, the customer has not actually seen, touched or smelled the product. What’s more, they have not built up an amiable relationship with a salesperson that persuaded them about the value of the product. In fact, they have had to rely on only pictures and descriptions to imagine what the product must be like. In short, they have had few avenues to put their doubts put to rest.
However, despite the logic of this common sense speculation, it is completely inaccurate.
Despite the appreciable risk of buying online, implying a high level of trust, the 2013 Top 500 Guide reported that website retailers did better than brick-and-mortar retailers when it came to product returns. Online retailers had an average return rate of 3.47% while offline retailers had an average return rate of 4.96%.
What to Do If Your E-Commerce Business Has High Returns
E-commerce merchants can rely on a metric called merchandise return rate to see how well they are doing. If their return rate is higher than the industry average, it suggests a problem with the business.
There are three usually three sources for this problem:
First, it could be a problem with the website itself, perhaps poor product images or descriptions.
Second, it could be a problem with how the order is processed, perhaps with the call center agencies.
Third, it could be a problem with the fulfillment organization, perhaps with the speed or care with which the product is delivered.
Always Use A Cost Effective and Efficient Merchant Provider
Sometimes, too, business problems and customer dissatisfaction can be related to choosing a poor merchant provider—one who does not provide low credit card processing fees to enable your business to establish high creditworthiness. A good merchant provider will offer a low processing fee and build your small business’s creditworthiness.
While merchants may be tempted by quick and easy solutions to credit card processing, it pays in the long run to focus on cost effectiveness and efficiency.