Studies have shown that most returned products had nothing wrong with them (study conducted by consulting and outsourcing firm Accenture). Looking at the possible reasons for these types of returns and how those causes can be remedied can help you avoid a dip in the bottom line.
The first step is knowing what your refund rate is. OrangeCRM has added a new Event report named CSR Refund Activity, which allows you to view how many purchases are being refunded, quickly identify which agents are processing the most refunds and determine how much money is being saved by issuing partial refunds instead of full refunds. To access this report, simply hover over the Events menu and click on CSR Refund Activity. A sample of the report is shown below.
The next step is identifying factors that are driving your refund rate up. The CSR Refund Activity report mentioned above will reveal any agents who are issuing an unusually high amount of refunds and which agents may need additional training in salvage programs that involve giving the customer a partial refund in lieu of a full refund. Another important source of data is your customers. Frequently examining your most common complaints and refund reasons will help you find areas where improvements can be made.
Once you are aware of any negative trends that need to be addressed, it’s time to implement the solutions. Here are a few suggestions that are proven to significantly reduce refunds:
- Deliver the customer’s order as quickly as possible. If it’s physical merchandise, avoid backorders and other shipping delays. If it’s a digital product, avoid technical issues that may prevent the customer from gaining instant access to it.
- Respond to customers immediately, even if it’s automated. Customers are quick to refund when they have a question or a problem with the product and can’t get a prompt response. A simple solution is to setup your customer support email account with a detailed auto-responder that explains exactly how your support ticket works, with hours of operation, expected response times (aim for under 24 hours) and a link to an FAQ page with your most common support questions and answers.
- Stay in touch with your customers. Ask for feedback on your products and listen to what your customers have to say. Understanding what causes returns is important, so lessons can be learned about changes that may be needed.
- Clearly explain what the customer will get and how it will be delivered. If you don’t provide the details upfront, you may generate more sales, but you will also get a lot of customers who really shouldn’t be buying your product and will end up requesting a refund once they have come to that realization.
- Encourage customer reviews. More customer reviews drive higher sales, lower product returns and more search-engine traffic. The more reviews a product gets, the lower the return rate. This is because it provides customers with the information they need to make the right purchasing decisions, which will ultimately reduce refund requests.
In order to be successful, keep in mind that managing refunds is a continuous process. Closely monitoring your return rate and frequently analyzing causes for refunds will maximize your profits.