Published: May 19, 2020
Reading time: 3 minute read
Written by: Forter Team

For merchants, returns present a continuous dilemma: how can returns be managed in a way that prevents abuse without sacrificing customer experience (CX) and failing to meet the demands of consumers? After all, 83% of consumers want businesses to provide free shipping for returns, and 80% are deterred when a store has inconvenient return policies.  

Reducing returns abuse should be a top priority for every merchant, but only 17% have taken steps to address it. The merchants that are addressing returns abuse tend to add limitations to their policies. For example, they might:

  • Shorten the window of time customers have to send back items.
  • Implement a stricter process for inspecting returned items.
  • Add restrictions to policies for refunds, reimbursements, and exchanges.
  • Create an evolving store returns “blacklist,” a list of customers who are no longer allowed to return items to the store.

Adding restrictions to policies can help reduce returns abuse, but it is often at the expense of customer experience. Also, brands with returns restrictions are less appealing to potential shoppers. Customers expect merchants to offer flexible and easy return policies with few restrictions. Merchants shouldn’t limit themselves from offering flexible returns policies for fear of abuse.

Customer Experience Doesn’t Have to Be Sacrificed

Preventing customers from abusing returns policies doesn’t require sacrificing customer experience. Businesses can do many things to deter abusers, while at the same time improving customer experience, such as:

Allow 30 days for returns – 68% of consumers prefer a 30-day returns policy. This window of time helps deter abusers while ensuring good CX for most customers.

Look at every touch point – Merchants should look at all of the touch points of the customer’s journey, online and in-store. For example, the touch points for an online customer might include account sign up, user login, chatbot, checkout, and online returns portal. Businesses need to implement tools that analyze customer touch points and identify abusers.

Detect hidden connections – Bad actors often use multiple email addresses and synthetic identities to hide their true identities. They use fake identities to create hundreds, sometimes thousands, of new accounts. Merchants must uncover hidden connections between user accounts and detect when accounts are working together to abuse policies.   

Implement real-time decisioning – Real-time decisioning allows businesses to enforce policies at every point of the customer journey – from account creation, to checkout, to initiating returns. It prevents bad actors or legitimate customers from placing orders to initiate excessive returns. And it allows good customers who have legitimate returns to make, to send items back to the merchant without having to jump through too many hoops. 

Tailor the solution – Returns abuse looks different for every company. Some companies may be willing to take on more risks than others, and the level of abuse is not the same for every business. What works for one company may not work for another. Any returns process must be tailored to the needs of each unique business. 

Merchants Must Prepare for a Sharp Increase in Returns

As we all know, we are in the middle of a global pandemic (COVID-19). Many brick and mortar retailers have been forced to close, leading to a surge in online shopping. The pandemic has led to a slew of returns policy changes, with some businesses not accepting any returns. We expect to see a sharp increase in returns when stores reopen, and there is once again a sense of normalcy. 

When it comes to handling returns during and after the pandemic, the best way forward depends on the type of business and the risk the business is willing to take. However, the path forward should include:

  • A system for evaluating customer behavior and returns.
  • A variety of tools to identify abusers and to take action without hesitation.
  • Patience, because not everyone is looking to abuse returns policies.

Our platform can help your business decrease returns abuse and improve the returns experience for your customers.  

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3 minute read