Customer Return Rates Analysis Across Top 5 Categories

Customer returns are a major concern for all companies operating around the world. Recent studies show that in the United States alone, customers return 8% of all the products that they have bought. This number has increased exponentially over the years and even though companies have started to realize the financial loss that these returned products present, it is no longer feasible to accept the situation. Something must be done about it.

A Look at the Return Rates Across Top Five Retail Categories

If your business is in one of the top five retail categories, you should know the following.

1) Consumer Electronics

Some of the top products that have a lot of customer returns are consumer electronics such as mobile phones, tablets and other gadgets. According to a study, today’s shoppers are often unimpressed with the electronics that they have bought, which is why the return rate is between 11% and 20% and the numbers keep rising with every passing year. Almost $17 billion worth of electronics were returned in 2011, which was a rise of 21% since 2007.

The same study revealed that of these returns, in 95% of the cases the products functioned properly and that the returns were not related to any defects in the product. The study further pointed out that most of the returns, 27% to be exact, were because of buyer’s remorse.

2) Computer Hardware

Another industry that experiences an overwhelming amount of customer returns is the computer hardware industry. The main reason for this is that, even though manufacturers offer help and assistance, the reliability of these products varies from model to model. Some of the issues that were related to these returns were that the product didn’t work as expected or that it was defective or damaged in one way or the other.

3) Food Products

In today’s world, product safety and quality are essential for all those companies that are involved in the food products industry. Whether you run a grocery chain store or are a global manufacturer, consumer satisfaction is the key to your success. Unfortunately, because of a variety of factors, the food industry has become a victim of overwhelming customer returns. However, some have managed to follow regulatory and government standards and maintain overall quality to beat these returns and leave their customers satisfied and happy with their purchase.

4) Toys and Baby Care

The industry standards and government regulations are constantly changing and so are consumer concerns about the safety and quality of the products that they are giving to their children. However, even though most companies go through the quality and safety process, there have been some noticeable customer returns in this industry as well.

5) Sporting Goods

Companies that are manufacturing or selling sports and athletic goods in today’s market are faced with a variety of challenges. One of those stems from the fact that regulations are constantly changing. Many companies fail to keep up, which leads to increased customer returns. In addition, consumer expectations for quality and safety increase, while the time to market continues to decrease. In such a dynamic environment, it is important that companies produce winning products that go through extensive testing to ensure quality and safety for the consumer.

Tips for Reducing Customer Returns

If you run a company in any industry and are facing problems with customer returns, here are some effective tips to help you reduce customer returns.

Inform Customers About the Product

One of the main reasons why customers suffer from buyer’s remorse is because they feel that they were uninformed or because the terms of service were too confusing to understand. To counter this issue, be sure to inform your customers about what they are signing up for. This will show them that you have nothing to hide and will reduce impulse buyers? customer returns.

Show them the Benefits

When you want to truly sell a product to a customer, start off with a description of the problem, the solution and a list of the benefits that the customer will receive upon buying the product. If you throw in a couple of testimonials from third parties, that will act as the social proof of the reliability and functionality of your product.

Remain Accessible During and After the Sale

One way a number of companies have been able to reduce customer returns is by giving their customers good after-sales services. If you have an online store, provide live chat support as this is a great way to stay accessible to customers throughout the sales process. Once the customer buys the product, a good customer support system will give them the confidence that if anything were to go wrong, you would be there to help out.

Don’t Brag About Your Product

Buyers’ remorse is bound to occur when companies overpromise and underdeliver. Overly hyped products will always leave the customer feeling like they have been cheated because they feel that they are not getting what they paid for. So instead of making a lot of big promises and delivering small, go easy on the marketing and please the customer by greeting them with something more than they expected.

Ask for Feedback

Finally, even if you do get customer returns, it is a good idea to ask the customer for their feedback. Once you know where and what the problem is, you will be able to bring a stop to it before anyone else brings back your products. Asking for feedback will also help you strengthen your relationship with the customer who has returned the product as they will be confident about their next purchase.

Even though customer returns cannot be entirely got rid of, the right techniques and tips will help you reduce them. However, keep in mind that no two customers are alike. Some may try taking advantage of your offerings while others may appreciate them. So find out what type of clients usually comes to your site and strategize accordingly.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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