Ecommerce Returns: How Shopify Merchants Can Drive Revenue Through Returns 

Published on September 26, 2023
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Filed under Shipping Basics
Read time 8 Minutes

For years, ecommerce returns have been painted in a negative light. But today, with technology like Return Rabbit, businesses selling on Shopify can tap into their returns management processes and actually increase profitability and strengthen brand loyalty. It may sound too good to be true, but it’s not.

Let’s dive down the rabbit hole and take a closer look at returns management, what Shopify brands need to look for, and how to build an effective post-purchase strategy.

What is returns management?

Returns management handles everything related to customer returns. This includes customer communication, managing the returned order, receiving the returned products, restocking, shipping, and more. Returns management is the foundation of reverse logistics supply chain management.

So, in short, returns management is critical for the success of your ecommerce business. A solid returns management system improves efficiency, minimizes costs, and boosts customer loyalty.

Customers have adopted online shopping across the board, so returns are only expected to increase across the ecommerce landscape. To put it in perspective, more than 263 million consumers, or 80% of the US population, shops online. And by 2025, that number is expected to exceed 290 million.

More online shopping means more returns, but it can also mean more revenue. Let’s explain.

Returns are a new beginning

Returns management is a second chance to build a long-term relationship with customers. Shopify brands that view returns as the end of the customer journey miss out on a massive opportunity to increase profits and strengthen the customer-brand relationship. 

Remember that customers are no less happy dealing with returns than your business is. They were jumping up and down when their package arrived, only to be disappointed upon opening. 

When customers request a return, they want to feel valued and that their concerns are being heard. Offering exchanges, full refunds, store credit, product recommendations, or discount codes to your customers can go a long way (and encourage future purchases).

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6 things you need to look for in a returns management system

The ideal returns management solution for your business should excel in these 6 areas.

1. Automation

Managing returns takes up a lot of time, especially if your team does it all manually. Constant back-and-forth communication with customers regarding their return isn’t convenient for either party. 

An automated returns management system streamlines the return process, so your team can focus on what matters most. No more manually approving returns, sending customer shipping labels, or restocking the product. Automation reduces the likelihood of errors and decreases overhead costs while simultaneously increasing customer satisfaction. It’s a win-win for everyone involved.

2. Data and analytics

To grow your business, you need to learn from your returns. Your returns management solution should offer advanced data and analytics to help uncover weaknesses and areas that need improvement. For example, if a certain product is being returned at a high rate, you need to understand why. There’s no point in selling a product only for it to be returned. 

Analyzing customer return reasons can help you improve your products and better understand customer buying behavior. Perhaps a line of shirts runs a size smaller than normal, and you have to update the sizing chart, or the photography doesn’t correctly showcase the true of a product. These customer reviews are a gold mine of information that you can’t pass up.

3. Customization

Gone are the days of your returns portal being clunky, gray, and just plain boring. Your returns portal should be an extension of your brand and look like an extension of your website. Look for a returns management solution that allows you to customize the things that matter most, like:

  • Font
  • Message
  • Logo placement
  • Images 
  • Colors

4. Mobile return-friendly

We live in a mobile-first world where things must be quick and convenient at all times, and that goes for ecommerce returns. Customers should have the option to request and complete a return using the technology of their choice whether it be desktop, tablet, or mobile. The more convenient the return process is, the more likely a customer will be confident to purchase again.

5. Exchanges, exchanges, exchanges

How do you keep the customer buying journey alive during the returns process? Exchanges.

Exchanges play a pivotal role in the post-purchase journey. They turn a once “one-and-done” transaction into a continued positive experience. Promoting exchanges over returns of course drives revenue, but it also increases customer loyalty and acquisition. Returns management isn’t about saving one sale; it’s about cultivating a long-term relationship with your customers.

Your returns management solution should offer all types of exchanges, such as:

  • Full catalog exchanges
  • Exchange benefits (i.e waiving order processing and shipping fees, discount carry forward)
  • Instant exchanges
  • Customer-personalized product recommendations

6. Revenue-focused

All of the above items contribute to a revenue-focused returns management system. Automated returns, actionable data outputs and insights, smart recommendations, and exchange-first functionality transform returns from a cost-suck to a revenue-driving machine.

Saving time with automated workflows, focusing on exchanges over refunds, and utilizing data to improve products and processes can generate more profit than average return software.

Unlock an elevated returns experience with ShipStation & Return Rabbit

Shipstation and Return Rabbit have teamed up to break down the barriers Shopify businesses face in the shipping industry and post-purchase experience. With this partnership, Shopify merchants gain exclusive access to the tools they need to retain customers and drive revenue through returns. 

Return Rabbit is a revenue-focused, exchange-first returns management platform that drives 5x ROI through returns. With enterprise-grade analytics, advanced features, and quick implementation, Shopify brands can start driving revenue with every return (without the heavy price tag). Learn more about the partnership of ShipStation and Return Rabbit today.

Existing ShipStation Shopify merchants can Schedule a Demo today for Return Rabbit.

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Written by

James Messer

James Messer is a copywriter specializing in shipping, logistics, and ecommerce.

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