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Handling Shopify Returns: A Simple Guide

By Abhishek Sebin on Oct 23, 2024

Order returns are an inevitable part of running an online store, and for Shopify sellers, efficient return handling can make all the difference. Whether you’re a seasoned Shopify seller or just starting out, returns can be challenging to manage. 

Does Shopify handle returns? The answer is yes! But there’s more to it than just hitting a refund button. The good news is that when managed well, returns can turn frustrated customers into loyal advocates.

In this blog, we’ll break down how Shopify returns work, the tools at your disposal, and how you can optimize the process to improve customer satisfaction, sales, and brand reputation. We’ll also offer insights into creating a simple and rewarding return experience. 

So, how can you master Shopify returns and turn a potential hassle into an opportunity? Keep reading!

Understanding E-commerce Returns

E-commerce returns are a critical aspect of online retail, significantly impacting customer experience and business operations.    Understanding the dynamics of order returns can help Shopify stores optimize their return management and help strengthen customer relationships.

Higher E-Commerce Return Rate

E-commerce return rates are notably higher than those of physical retail stores. Recent statistics indicate that the average return rate for e-commerce was 17.6% in 2023, and 23% of retail sales are expected to take place online till 2027. Returns can be attributed to several factors:

• Inability to Physically Inspect Products: Customers cannot touch or try on items before purchasing online, leading to dissatisfaction when products do not meet expectations.
• Sizing Issues: In sectors like women's apparel, where the average return rate can soar to 23%, incorrect sizing is a common reason for returns. For instance, a customer might order a dress in their usual size but find it doesn’t fit as expected due to variations in brand size.
• Impulse Purchases: 58% of US online shoppers buy items with the intention of returning them later, which is less common in physical stores where customers often think more carefully before making a purchase.

The high return rates pose challenges for e-commerce businesses, necessitating robust return management strategies.

With an intelligent and automated returns management system, PostShip transforms your post-purchase experience! Streamline your returns process with rules-based automation that not only improves the customer experience but also reduces operational delays. Book a demo call with us!

We’ve covered why returns happen; let’s discuss how having a return strategy will impact your Shopify store’s success.

Why Return Policies Matter

Returns are critical to e-commerce, especially for platforms like Shopify. A well-structured returns process can significantly impact customer satisfaction, sales, and brand reputation. Here’s a closer look at why handling returns is essential for online retailers.

Improved Customer Satisfaction

A smooth return process directly enhances customer satisfaction. When customers know they can return items easily, it reduces their anxiety about making a purchase. For instance, Zappos offers a generous 365-day return policy, allowing customers to return unworn items hassle-free. This not only boosts customer confidence but also fosters loyalty, as buyers feel supported throughout their shopping experience.

Moreover, automating the returns process can further streamline operations. Platforms like PostShip have returns management software (RMS) to help automate notifications and shipping labels, making it easier for customers to initiate returns without lengthy procedures. This efficiency ensures that customers receive timely updates on their return status, reinforcing their trust in the brand and encouraging future purchases.

PostShip has also significantly reduced "Where Is My Order" (WISMO) tickets by providing real-time order tracking updates and keeping customers informed at every step of the post-purchase journey. 

This transparency reduces the strain on customer support teams and enhances the overall customer experience by addressing concerns before they arise. Check out this testimony below:

“I’ve been using the PostShip on my Shopify store, and it's really cool! It makes tracking orders super easy, and the notifications are helpful. The app is easy to use, and I like how it keeps getting better with updates. My customers are happier now because they can see where their orders are. I think it's a great app for any online store!”

Mini Joy, United states

Increased Sales 

An adequate return policy can increase sales. Consumers are likely to buy again if the return process is easy. For example, retailers like Lululemon have implemented policies that allow customers to receive store credit refunds quickly for returns, expediting the process and encouraging repeat business.

Additionally, clear communication about return policies can mitigate customer indecision during the purchasing phase. When shoppers know they have the option to return items easily, they are more inclined to make a purchase. 

• Enhanced Brand Reputation 
  A well-managed return process contributes to a positive brand reputation. Brands that handle returns effectively are more likely to receive positive reviews and referrals from satisfied customers. 
  
  For instance, companies like Chewy and Amazon have established strong reputations by offering flexible and customer-centric return policies. Chewy's "100% unconditional satisfaction" guarantee encourages customers to shop without fear of being stuck with unsatisfactory products.

While order returns seem challenging, they’re also a golden opportunity to build trust and loyalty when handled correctly. In the next section, explore how effectively managing returns can strengthen your relationship with customers.

Managing Returns to Enhance Customer Relationships

While returns can be seen as a burden, they also present opportunities to strengthen customer relationships if managed effectively. A smooth and customer-friendly return process can significantly improve customer satisfaction and loyalty. Here’s how:

• Building Trust: A clear and generous return policy fosters trust. Shopify merchants can utilize PostShip for hassle-free returns, encouraging customers to shop confidently. Customers are more likely to purchase when they know they can quickly return items.
• Encouraging Exchanges: Retailers can promote exchanges instead of focusing solely on refunds. 
  
  For example, with PostShip, online retailers can offer store credit or discounts on future purchases when a customer opts for an exchange instead of a refund. It keeps them engaged with the brand. This strategy not only reduces the immediate financial impact of returns but also increases the likelihood of repeat purchases.
• Leveraging Data for Improvement: Analyzing return data allows businesses to identify patterns and improve product offerings. 
  
  For instance, if many customers return a specific item due to sizing issues, brands can adjust their size charts or product descriptions accordingly. This proactive approach not only reduces future returns but also enhances overall customer satisfaction. PostShip uses return data to provide brands with deep insights, helping them convert it into revenue opportunities, optimizing processes, and enhancing customer retention.
• Streamlining the Return Process: Implementing user-friendly return processes, such as easy-to-navigate online portals and multiple return options, can significantly enhance the customer experience. 
  
  By viewing returns as an integral part of the customer journey rather than merely a logistical challenge, e-commerce businesses can turn potential losses into opportunities for growth and improved customer loyalty.

Now, let’s take a closer look at how Shopify handles returns and how you can manage them manually through your Shopify Admin or POS system.

Managing Shopify Returns: The Manual Way

Handling returns effectively contributes to customer satisfaction and loyalty for your store. Review the manual processes for managing returns via the Shopify Admin for online orders and through Shopify POS for physical stores below.

Steps to Process Returns Via Shopify Admin 

1. Log into Shopify Admin: Start by logging into your Shopify admin dashboard.

2. Navigate to Orders: Click on the "Orders" tab in the left-hand menu to view all recent orders.

3. Select the Order: Find and select the order that contains the item(s) being returned.

4. Initiate Refund Process: Once the order page opens, click on "Refund".

5. Specify Items to Return: Enter the quantity of each item that the customer wishes to return. If you are processing a partial refund, ensure that you only enter the quantities for those items.

6. Specify Items to Return: Click on "Refund" to finalize the process. This action will update the order status and notify the customer if you have that option enabled.

Your customer will get an automatic notification if it is set up.

7. Optional Steps:
   1. If applicable, you can choose to restock items manually by deselecting "Restock items" before confirming the refund.
   2. You may also choose to refund shipping costs or include duties and import taxes if relevant.

This process allows you to manage returns efficiently while keeping your inventory records updated.

Steps for Handling Returns Through Shopify POS 

1. Access Shopify POS: Open your Shopify POS app on your device.
2. Go to Orders: Tap on the menu icon, then select "Orders" from the options available.
3. Select Order for Return: Locate and tap on the order containing the returned item(s).
4. Initiate Return: Tap on "Return." This will prompt you to enter details about the return.
5. Enter Item Quantities: Use the "+" and "-" buttons to specify how many of each item are being returned.
6. Complete Return Process: After entering quantities, tap "Return" to process it.
7. Optional Features:
   1. You can add a reason for the return, which helps in understanding customer behavior.
   2. If you do not want to restock an item immediately, you can deactivate that option before finalizing.
   3. For exchanges, select an alternative item from your inventory when prompted, allowing customers to swap rather than simply return items.

Don't let returns drain your profits! Convert 50% of returns into new sales with PostShip's automated exchange and store credit offers. Schedule a demo today!

While manually handling returns is an option, a streamlined and well-communicated return policy is crucial to prevent confusion and improve customer experiences.

How do you create a return policy? Read below.

Crafting a Streamlined Return Policy

Creating a streamlined return policy is essential for online businesses on platforms like Shopify. A well-crafted return policy not only enhances customer satisfaction but also builds trust and encourages repeat purchases. Here’s a detailed look at some of the best practices for creating an effective return policy.

Outlining Clear Terms and Conditions

A clear return policy is vital for setting customer expectations. It should specify:

• Return Window: Define how long customers have to return items, typically ranging from 30 to 90 days. For instance, a store might state, "You can return your purchase within 30 days for a full refund."
• Condition of Products: Clearly outline the condition items must be in to qualify for a return. For example, clothing may need to have tags attached and be unworn.
• Refund Process: Explain how refunds will be processed—whether as store credit, a refund to the original payment method, or an exchange.

PostShip helps you set up flexible return options such as store credits, exchanges, or discounts for retaining customers who might otherwise request refunds. By offering these alternatives, PostShip helps businesses reduce the financial impact of returns and foster customer loyalty.

• Shipping Policy: Clarify who bears the cost of return shipping and how returns should be shipped back. This transparency helps prevent misunderstandings and dissatisfaction among customers.

Postship centralizes multiple carrier options on one platform, making it accessible to compare rates, shipping times, and services. It provides detailed shipping analytics, enabling businesses to monitor and optimize their shipping processes. 

PostShip also provides data on returns shipments, allowing businesses to optimize logistics, manage carrier performance, and minimize return-related costs. Contact us!

Ensuring Easy Accessibility of the Return Policy

Accessibility is crucial in ensuring customers are aware of your return policy. Most of the customers check return policies before purchasing, and if they find it unclear or difficult to locate, they may abandon their cart. Here are some strategies to enhance accessibility:

• Prominent Display: Place links to your return policy in the footer of your website and on product pages. 

• Incorporate into Marketing Materials: Include snippets of your return policy in emails, newsletters, and promotional materials. This not only informs potential buyers but also reassures them about their purchase decisions.
• Clear Instructions for Initiating Returns: Provide straightforward steps for initiating a return, such as filling out a form on your website or contacting customer service. This reduces friction in the return process and enhances customer satisfaction.

PostShip helps businesses generate a comprehensive, customer-friendly return policy by leveraging its expertise in returns management and data-driven insights. Install Postship to get started!

Offering Flexible Options Returns Options

Flexibility in your return options can greatly enhance customer loyalty. Consider implementing the following strategies:

• Free Returns: Offering free returns can significantly increase conversion rates. For instance, if you state, "We offer free returns within 30 days," it encourages hesitant customers to complete their purchases.
• In-Store Returns: If you have physical locations, allow customers to return online purchases in-store. This option not only saves on shipping costs but also drives foot traffic to your stores.
• Exchanges Over Refunds: Encourage exchanges instead of refunds by offering incentives like discounts on future purchases when customers opt for an exchange. This approach can help retain revenue while still addressing customer needs.

A good return policy isn’t just about the rules—it’s also about how effectively it’s communicated to customers. 

PostShip helps businesses craft clear, customer-friendly language for their return policies, making it easy for customers to understand their options. PostShip also facilitates real-time updates and notifications about return status, reinforcing a smooth and stress-free return experience.

Offering a customizable order tracking page, Postship keeps customers on your site with a fully branded order tracking experience that turns shipping updates into opportunities for engagement and upsells. Boost your sales by 10-15%! Book a demo with us to get started!

With a solid return policy in place, explore how automation can take your return management to the next level.

Impact of Automated Returns

Automating returns can significantly enhance both operational efficiency and customer satisfaction. Here’s how automated returns can transform your business:

Ease of Integration Tools 

Automated returns systems can be easily integrated with Shopify, allowing merchants to streamline their return processes without extensive technical knowledge. Tools like PostShip provide user-friendly interfaces that enable smooth integration with existing Shopify stores.

Real-Time Returns Tracking 

Providing customers with real-time tracking updates on their returns is vital for maintaining transparency and trust. Automated systems can send notifications via email or SMS, informing customers about the status of their returns at each step.

Setting Customizable Return Rules 

One of the significant advantages of automated returns is the ability to set customizable return rules tailored to different policies. Merchants can define specific conditions under which returns are accepted or rejected.

• PostShip: This software allows merchants to create detailed return policies that can vary by product category or reason for return. For example, clothing items might have a 30-day return window, while electronics could have a shorter period due to warranty considerations.
• Custom rules not only help in managing expectations but also reduce the likelihood of abuse of the return policy, thus protecting revenue.

Supporting Returns From Mobile Devices 

Enabling customers to manage their returns from mobile devices is relevant, as 91% of consumers make online purchases with their smartphones. Automated return solutions often come with mobile-friendly interfaces that allow customers to initiate and track returns from anywhere.

Platforms like Postship are optimized for mobile users where they can quickly access their order history and start a return with just a few taps. 

By allowing mobile access, businesses cater to the preferences of modern consumers who value flexibility and ease of use in their shopping experiences.

Automated tools simplify the return process, but the true key to success is recognizing the broader impact returns can have on your e-commerce business.

Let’s sum up the essential points discussed in this blog.

Conclusion

Return management is one of the primary factors that contribute to any Shopify store's success. While Shopify returns can often feel challenging, they present a valuable opportunity to improve customer satisfaction, increase sales, and enhance your brand’s reputation. 

By implementing a streamlined return policy, promoting exchanges, and leveraging post-purchase tools like PostShip, you can transform returns from a logistical headache into a strategic advantage. The key to handling returns is fostering customer trust through transparent policies and efficient processes. Ultimately, all these will turn return processes into moments that build loyalty and encourage future purchases. 

Master your returns, and you’ll unlock new growth opportunities!

PostShip offers more than tracking and returns; it’s a platform for boosting customer satisfaction and increasing revenue! Schedule a demo today!