.png)
In 2024, the average rate of returns for online purchases was nearly 17%, according to the National Retail Federation. That means that for every 100 products purchased, 17 were returned by customers, contributing to costs that can eat away at your bottom line.
In fact, while more than 75% of customers say free returns influence where they shop, returns have big financial implications for the eCommerce industry. Expenses associated with restocking, shipping, and inventory loss can add up; Shopify estimates that the cost to process a return can be anywhere from 20% to 65% of the item's original value.
An American makes eight returns per year on average for various reasons. (Source: Dealnews)
These stats paint a bleak picture. But, some solutions and strategies can minimize the risk of high returns. In fact, with a well-structured returns system, returns can actually be leveraged into a revenue-generating opportunity.
In this guide, we’ll break down how to set up a returns system that provides options beyond simple refunds. Read on to find out how a strategic returns system can significantly boost customer loyalty and drive repeat purchases, ultimately increasing revenue.
Returns play a big role in eCommerce. And the better your return experience is for the customer, the more likely they are to continue shopping on your site.
It’s worth acknowledging that easy returns are one of online retailers' biggest competitive advantages. Many consumers prefer to shop online because they can order different clothing sizes or product variations, keep the items that work best, and send back what they don’t wish to keep, all from the comfort of home.
More than a third of surveyed customers feel the ability to return an item is the most important in their shopping account. (Source: Baymard)
However, the ease of making a return is essential. A hassle-free, positive return experience can significantly increase customer loyalty. According to the National Retail Federation's report, more than 65% of customers say a negative return experience would discourage them from shopping with a retailer again. Other studies show that 7% of users would never purchase again from a site solely due to a bad return experience.
Bottom line: You could leave money on the table by neglecting your returns experience. By our estimate, eCommerce retailers stand to retain 20% more customers by improving their returns experience. And, fortunately, there are simple changes you can make to your operations to make sure every return goes smoothly for your customers.
Before diving into how to transform returns into revenue-generating opportunities, let’s start by diagnosing the problems with existing return systems. Traditional returns are riddled with issues that impair the customer experience, starting with usability issues.
Tired of dealing with frustrating returns processes? Sign up for a free trial of Rich Returns and simplify your system today.
A data review by the Baymard Institute discovered that 54% of eCommerce sites had substantial usability issues in their returns process. These issues range from not having an online return feature at all to simple fixes related to the return user interface and flow. For instance, some sites don’t provide an easy way for the user to save the return label at the end of the return process.
Rich Returns provides a clear example of how a self-service returns portal should function. Rich Returns’ Returns portal guides users through the returns process with simple, easy-to-navigate prompts. On the self-serve portal, you select the item they want to return, describe the reason for the return, and choose what action they want to take (e.g., exchange, get store credit, or refund to their original payment method). In just a few clicks, your customers can get a pre-paid label emailed to them and carry on with their day.
The Returns app is built to make life easy for merchants, too. The app is set up to integrate with Shopify, speeding up the process by auto-approving Shopify returns and eliminating any manual data entry that typically comes with traditional returns platforms. It’s easy for you and easy for your customers.
In addition to integrating with Shopify’s eCommerce platform, Rich Returns offers a Shop Mini app integration. Adding a second way to complete the returns process significantly enhances the shopping experience. In fact, Rich Returns’s Shop Mini usage in January 2025 showed the convenience of using the Shop app led to more completed returns (and fewer frustrated customers).
Completed Returns through the Shop Mini
Avg. Number of Completed Returns per Merchant
96.5% increase compared to last period.
33.3% increase compared to last period.
With the Rich Returns Shop Mini, merchants can:
Ultimately, this app allows merchants to provide a better experience while lightening the load of processing returns on the backend.
On that note, traditional returns systems can lead to customer service issues that frustrate your team and damage your brand. A poor returns process can lead frustrated customers to call your service team with issues like not being able to print a return label or a lack of clarity around product exchanges. These are relatively simple problems, but they can easily waste your team’s time and energy. A self-service portal can substantially reduce those types of requests.
Implementing a more intelligent returns system doesn’t just troubleshoot existing issues in your process. It can also help your eCommerce store turn returns into additional revenue. By focusing on improving the returns process and creating opportunities to engage with customers, here’s how a system like Rich Returns can benefit your business.
Increase loyalty by offering various return options, like in-store, drop-off, or home pickup. Providing different options allows customers to select the return method that best suits their schedule and preferences. This streamlined returns process shows you value their time.
Here are a few options to consider offering when customers enter the returns process.
A modern returns platform can also improve the experience for your employees and allow you to keep more revenue in your pocket. By making the returns process quick and easy, you alleviate some of the repetitive, time-consuming tasks that can lower your team's productivity and morale. Merchants who use automation can reduce the resources used on small, manual tasks, boosting profit.
Rich Returns’ Automation feature takes over generating return labels, sending personalized email notifications, and approving returns to reduce operational costs and elevate efficiency. Carrier integrations allow customers to automatically receive a prepaid return shipping label without any staff input. You can even automate refunds to ensure customers get their money back in a timely manner.
Automation smoothes out the return process, freeing up your team and leaving customers feeling satisfied with their experience. This increases the likelihood that they’ll come back to your brand and start building loyalty.
Loyalty programs are tried-and-true campaigns for boosting customer retention and revenue. They contribute to higher AOV, lower customer churn, and increased CLV. Returns offer a clever way to attract customers to your loyalty program and continue to build value.
Integrate returns into your loyalty program by offering bonus points or perks for customers who exchange items or return them for store credit. With a simple app like Influence, you can set up points for actions like exchanging an item, including various options to convert those points to perks. Influence’s flexibility and many customization options make it the leading app for Shopify merchants seeking to improve loyalty and boost revenue.
Perhaps the biggest advantage of using a strategic returns system is the data it generates for your eCommerce site. With Rich Returns’ analytics dashboard, you can get a quick snapshot of the products that are being returned or exchanged most frequently. This information can help you write better product descriptions, such as recommendations on sizing and fit. It can also show you which products are not worth restocking and if there are consistent issues that you need to address with your supply chain partners.
These insights help you boost revenue by identifying consumer trends early and often. Use this information to improve product design, marketing strategies, and inventory decisions.
Finally, adding a personal touch is the simplest way to improve revenue-generating opportunities from your returns. Reach out to customers after a return is complete with personalized discounts or promotions to encourage them to make another purchase. Asking for feedback and showing you care about their experience can go a long way toward strengthening brand loyalty.
Ready to level up your returns process? Rich Returns is here to help.
The Rich Returns app offers a centralized dashboard to configure and manage your eCommerce return policies. It integrates with your Shopify site to automatically process returns and track store credit balances with customizable expiration dates and usage rules. Customers can easily exchange items, selecting from size/color variants and suggested alternatives that you configure. And, you can add configurable bonus credit amounts (5-25%) that can be adjusted based on product category or customer segment to further enhance loyalty.
Our app is also set up to be incredibly easy to get up and running. Rich Returns offers one-click installation with Shopify and the Shop app through our new Shop Mini extension. Since integrating with the Shop app, Rich Returns has empowered merchants to minimize refunds by guiding customers toward profitable alternatives like exchanges or store credit.
(data of Rich Returns’s Shop Mini usage in Jan 2025)
Sennheiser, a leading brand in consumer electronics, partnered with Rich Returns to overcome the challenges of its cumbersome, legacy returns platform run by a third-party system. The brand needed an efficient, straightforward returns flow that could be integrated into their website.
After integration, Rich Returns managed approximately 5,800 returns across Germany and the EU for Sennheiser in 2023. By allowing customers to initiate returns independently, Sennheiser enhances the overall customer experience, leading to high satisfaction levels.
[Read more: Sennheiser's Improved Satisfaction & Efficiency through Returns & Address Validation]
See how Rich Returns can transform your eCommerce return experience into a revenue-retaining opportunity. Sign up for a free trial to upgrade your returns today.
