It can be easy for big-box stores like Amazon to create sweeping return policies that leverage their vast logistical resources to please their customers. But what if you’re a small or medium-sized business? An overly generous return policy can be hard to compete with. And you need to minimize returns to hold on to as much of your revenue as possible.

Fortunately, you don’t have to gut your returns policy to prevent returns. Instead, you can look at customer insights to find out why they return products, work to prevent those returns, and tweak your returns policy as an incentive to join your loyalty program. 

Why Customers Return Items

The good news here is that most customers prefer to avoid returning products. The data shows this: 44.96% of participants claim they hardly ever return items, while 33.81% say they “rarely” do so. On the flip side, only 2.21% of customers claim to return items frequently. With product returns, only a tiny percentage of customers end up making the most noise.

Even so, you can only minimize returns when you know why they happen in the first place. Here are some of the top reasons people return their products:

  • A damaged or defective product. This was easily the leading cause of returns. When we surveyed just over 1,000 shoppers, 425 selected this as the reason they were most likely to return a product. No matter how understanding a customer is, you simply can’t expect them to eat the costs if their product shows up damaged.
  • Products that don’t live up to expectations. Even if the product does show up intact, you can turn customers off if the product isn’t what they were hoping for. The disconnect between expectations and reality is another big cause, with 372 respondents listing that they would return items. What causes this misalignment in expectations? When the items they receive don’t match the online description or image. The more accurate your product page is, the more likely it is that customers will keep the product when it arrives.
  • Logistical failures. Sometimes, things just go wrong in shipment. 270 respondents said they would return an item if “the wrong item was delivered.” But it’s not just about where the item arrives or which item arrives. It’s also about when. 62 said that if the “order arrived after I needed it,” they might return it.

Clearly, if a shop wants to minimize returns, there are two key leverage points in the data. The product needs to arrive intact and live up to expectations. There’s only so much control you have over what happens to an item once it’s shipped. But you can ensure that the product lives up to customer expectations with a few key changes:

  • Accurate product photos. It’s tempting to use flattering, overly glitzed-up photos to maximize the chance of a sale. But is the increase in conversions always worth it if many of those customers are so disappointed, they end up returning the product?

  • Reference sizes. Try including reference sizes and measurements so the physical size of the product isn’t a surprise when it arrives. This will establish the right expectations so customers know what they’re in for.

  • Customer reviews. Include a mix of user-generated customer reviews. Not only do positive customer reviews add social proof to increase conversions, but they can also set expectations in the right context.
     

Strategies for Reducing Returns Before They Happen

User-Generated Content

Sure, user-generated content (UGC) builds trust and credibility. But there are side benefits to UGC that can also help prevent returns. 

For starters, 50% of consumers trust online reviews as much as personal recommendations from friends and family. That trust can go a long way to convincing someone to keep a purchased product. Second, UGC, in the form of user photos and reviews, can help your customers form a more accurate picture of product expectations. Given just how important accurate expectations are in preventing returns, that alone can be a successful tweak on your product pages.

Credible Feedback

Imagine a product page in which 100% of the reviews are positively glowing. Rather than make conversions more likely, it might set the wrong expectations. In a past Bizrate Insights Survey, we found that “67% of people are skeptical when they come across products with many positive reviews but no negative feedback.” 

Don’t take this as a recommendation to encourage or post negative reviews under a product in the hopes of making the product seem more credible—thereby preventing returns. Instead, pay attention to how organic your UGC looks. You’ll need to strike a balance between setting realistic expectations for the product and building credible social proof that the product is a great buy.

Shortening the Return Window

For years, L.L. Bean, a clothes outlet, was famous for its lifetime guarantee. Buy a pair of Bean boots, and you’d never want for winter footwear again.

But there was a problem with this offering. L.L. Bean noticed how many customers were treating its return guarantee as something of a “lifetime product replacement program.” 

While long windows for product returns do entice customers, they’re also easy to take advantage of. You can keep a generous return policy in place, but shorten the window to lessen the financial impact it makes on your company. Or you can make longer return windows an exclusive offering for customers who sign up to your loyalty program.

Tweaking Your Returns Policy to Inspire Long-Term Loyalty

Our data shows that 65.2% of consumers prefer returning their products if they receive pre-paid shipping labels. Another way to spin that? If you’re paying for every customer’s return, don’t be surprised if they end up using it. 

Consider tweaking your returns policy. You can maintain generous terms without feeling like consumers are using your products for “try-out” periods. Rather than including return labels with every purchase, for example, you might provide them only on demand.


What if you want to keep your generous returns policy — just lower its financial impact? Consider adding it as a perk to your loyalty program. This way, longtime customers will still feel like they can trust you to take any returns. And new customers will feel encouraged to join and engage with your brand for the long term.

Learn Your Customers’ Priority To Minimize Return

There’s no getting around it: if you want to save money on returns, you have to give customers as few reasons as possible to return your products. But not every strategy requires slashing your returns policy or making it so high-friction that customers don’t want to buy from you in the first place. Know your customers and the key reasons they will likely return a product. Then, strategies should be put in place to deny them those reasons.
Interested to find out what else you can learn with Bizrate Insights? Download the Shopper Insights Brief and schedule a demo with Bizrate today!