As an online retailer, you must be prepared to handle returns, cancellations, claims, negative reviews, and customer refund requests in the best possible way. Not doing so can impact your store’s bottom line, damage your seller metrics, and even cause account suspension. Providing customers with a way to return or cancel orders is a good way to boost the customer experience.
There are many reasons why a customer cancels or returns an order. Whatever the reason, it does not bode well for your business. Data shows that consumers returned about $428 billion worth of goods in 2020. The average returns increased to 16.6% and 10.6% in 2021 and 2022, respectively.
Although order cancellations and returns are part of being an online retailer, you would want to keep them at a minimum. Doing so will help reduce customer churn, create positive impressions, and ensure customer loyalty. In this article, we will guide you on how to handle order cancellations and return and continue satisfying customers.
Why Customers Cancel & Return Orders
- They Purchased The Wrong Item/Changed Their Mind
- Merchant Shipped The Wrong Item
- Order Arrived Late/Customer Doesn’t Need It Anymore
- Damaged or Defective Product
Tips On Handling Order Cancellations & Returns
- Make Returns & Cancellations Easy For Customers
- Find Out Why Customers Want To Churn And Win Them Back
- Educate Customers On How To Use Your Product
- Be Emphatic, Not a Pushover
- Understand The Problem Behind The Cancellation
- Communicate Regularly
- Make Things Right
Why Customers Cancel & Return Orders
Order cancellations & returns are more common in online stores. Studies show that at least 30% of all products ordered online are returned compared to 8.89% in brick-and-mortar stores. Here are 5 common reasons customers cancel & return orders.
1. Customer bought the wrong item/changed their mind upon receipt
It is normal for a customer to suddenly change their mind after purchase. Most likely, you experienced it yourself. It’s beyond your control if customers will feel differently about a purchased item. You cannot also prevent them from making any mistakes on their part.
What you can do is assure customers that all your product information and images are accurate, clear, and complete so that customers exactly know what they are getting. Although doing so will not prevent them from making returns, at least providing them with comprehensive product information will mitigate most returns.
2. Merchant Shipped The Wrong Item
Sometimes the wrong item comes from the merchant itself. Shipping the wrong item is actually quite common. In fact, even large retailers like Amazon and Office Depot are not spared from such mistakes. All it takes is a small error during the pick, pack, and ship process. Once they receive their order, they will be surprised to discover a different item inside.
If the customer contacts you demanding to return the item, you cannot charge them for that. According to the Federal Trade Commission, it’s illegal to bill a customer for something they did not order and is not obliged to return the item to you even if you issue a refund. While some will return the product, you will have to shoulder shipping and handling costs.
3. Order Arrived Too Late/Customer Don’t Need It Anymore
For a customer, a purchase can be a “late arrival” for many reasons. Maybe they needed the item for an event but already passed before the item arrived. Maybe the delivery date is too long that the customer got impatient and decided to buy it elsewhere. Late arrival is usually the cause of an item being no longer needed. It may also be due to the customer changing their minds.
To prevent this from happening, ensure you have clear, real-time shipping information with tracking numbers. This way, they will have an idea of the estimated arrival time of their orders. In addition, you should process orders promptly so you can ship them out on time.
Wardrobing is a fraudulent practice in which customers buy an item they intend to use only for a short time and then return it afterward. For example, a woman buys a dress for a special occasion and wears it with the tags still tucked inside, only to return it a few days later. This is an example of wardrobing.
Wardrobing is not only applicable to clothing items. Anything that can be used for a special event like electronics or kitchen equipment can be subject to wardrobing. While the practice is difficult to avoid, some customers who engage in this practice are real experts at doing it. Use ecommerce software that supports the feature.
5. Damaged/Defective Product
Shipping accidents can always happen, even if you send out a pristine item, your order can arrive in a thousand pieces. If you constantly receive feedback about damaged items, reevaluate your packing procedure and take better steps to protect your products.
With defective merchandise, you should make it a point to inspect your inventory and remove any product that meets the requirements. If most of your products are being returned as defective, take a closer look at your warehousing method. Environmental factors such as temperature and moisture can damage many types of merchandise.
Tips On Handling Order Cancellations & Returns
Order cancellations & returns can cost your business big time. According to the National Retail Foundation, 18.1% of items purchased online in 2020 were returned. In most instances, this means that you already paid for the shipping cost and refunded the customer without getting a sale. These costs can affect your bottom line. Here are some tips on how to handle order cancellations & returns.
1. Make Returns & Cancellations Easy For Customers
As an online retailer, you should acknowledge that order returns & cancellations can happen anytime, so you must be prepared to deal with them when it happens. If the customer’s reason for asking for order cancellation & return is valid, you have no recourse but to approve the request or face negative feedback from the customer.
For this reason, you need to make the process of canceling and returning an order easy for your customers. 67% of shoppers check the returns page before making a purchase. In addition, 92% of customers will buy something again if the return process is easy. By making your order cancellation & returns easy, your customers will have more confidence to shop and spend more on your store regardless of their previous experience.
An overly complicated cancellation & returns process can destroy the credibility of your business. Just because your customers leave you does not mean you cannot win them back. But making it hard or expensive for them to cancel an order or return an item won’t do the trick either. Be clear about your cancellation and returns policy at the onset, letting them know if there are fees or other charges they would have to pay. Make sure that the policy can be easily found on your website.
2. Find Out Why Customers Want To Churn And Win Them Back
Always ask your customers for the reasons why they are canceling or returning their order. Most customers will not communicate their bad experiences with a product or service with a company. If the customer requests for order cancellation or return, dig deep and find out why they want to cancel or return the item.
Once you have identified the reason, offer them an alternative in order to win them back. Show them your willingness to help as this could make a big difference. Such an act may help them change their attitude and even convince them to stay. You can offer them a discount or one month free of your product.
And while you’re at it, ask them for feedback on why they are canceling or returning the product. If it’s the high price, you can recommend a cheaper option. If it’s the overall quality or feature of your product, use the feedback to improve your product. It will help boost the customer experience and help with customer retention.
3. Educate Customers On How To Use Your Product
Before purchasing your product, help them decide by educating them about the features and benefits of your product. Educating a customer about your product ensures that they will understand the value of your product so they won’t be forced to cancel or return their order because they know its benefits.
Research debunks the myth that customer education will decrease their loyalty to a brand. In fact, research reveals that educating customers offers huge advantages instead. Although your customer can search for the information themselves, you could lose valuable points that you could have scored with the customers, or they could switch to a competitor.
Educating customers will not only build customer trust but also reduce complaints. By knowing and understanding your product, its features, capabilities & limitations, it gives you realistic expectations of what you can achieve with the product. With less complaints, it will ease the pressure on your support channels and will enable your support staff to handle other issues.
4. Be Emphatic, Not a Pushover
Showing empathy to customers when they are canceling provides a good way of winning them back to your brand. Remember that the client canceled an order for personal reasons outside of your control. They are also likely to return to your business once their circumstances have changed.
Convincing customers to keep their orders is an incredibly delicate affair and your persuasions should never go as far as leaving the client with a negative last impression. If the customer is okay with sharing it, ask them their reason for choosing to cancel. Repeat the information back to the client as this shows them that you are listening. Tell them that you understand their sentiments and respect their feelings.
If the customer still wants to cancel at the end of the conversation, let it go with grace and respect. Losing one customer is surely a big blow to your business but pushing back in ways that will result in an uncomfortable and hostile situation can lead to bad publicity that could push more clients to cancel in the future.
5. Understand The Problem Behind The Cancellation
Approach the conversation from a customer’s perspective and work together with them in finding a solution that will work best for both parties. Most customers cancel an order because their needs have been unaddressed. Find an alternative solution and create a win-win scenario for both your business and the client.
Not understanding where the customer is coming from will make you think that you are just overreacting to a simple problem. It will be hard for you to mask those thoughts and act like you are empathetic. To weed out the problem, you need to determine who your customers are and what your product or service means to them.
To understand the problem, you need to be an active listener. Do not offer a solution before they can finish telling you about their problem. Sometimes customers are just looking for someone to vent and most of the time half of their issues will be resolved once they have been heard. More importantly, you should always remember that your job is to help the customer.
6. Communicate Regularly
Sometimes customers cancel or return their orders because they are misinformed about small details like shipment delays or estimated delivery days. The more information you provide customers, the more you will prevent customers from canceling their shipments or leaving negative reviews of your business.
Customers don’t want to be left in the dark about where their orders are. The more you inform them about where their package is, the expected time of arrival, and the reasons for the delay, the more you minimize the damage. Sure they would be disappointed with the delay in their order but by keeping them in the loop, customers will know that you value their business and will keep doing business with you. Be transparent with them regarding delays in their orders to gain their trust.
Be proactive when communicating with your customers. Send them emails, and contact them through private messaging channels like Facebook Messenger, Viber, or other channels. Don’t let them be the first ones to contact you, or else that customer is gone. Be honest and explain to them clearly the status of their order.
7. Make Things Right
Cancelled orders is always a pain for any ecommerce business because it hurts customer acquisition and conversion rate. But that does not mean that customer is totally gone. You can still save the sale and the customer by making things right. When a customer cancels an order, you must act fast before they go to your competitor.
First things first, you need to make sure that you have a clear returns policy in place. Whatever the customer’s reason for canceling is, having a solid return policy will increase sales without increasing the volume of returns. As reported by the Web Retailer, if your ecommerce business has at least 40% repeat customers, you are likely to have 50% higher sales as opposed to online retailers with repeat purchasers making up only 10% of their sales.
If you really cannot save the business, there is always something you can do to make up the lost revenue. Find yourself some quality prospects taking into consideration their dollar potential and their willingness to spend. Finally, sell solutions that solve business problems and deliver results.
Learning how to handle canceled orders can make a difference between retaining and losing customers. These tips will help you save future cancellations and increase your potential revenue.
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