Shopify Returns Policies and Processes Explained (Plus 12 Ways To Reduce Returns)

Running a successful Shopify business is both exciting and challenging. Among all the tasks you juggle daily, handling product returns can be one of the most daunting. High return rates not only eat into your profits but also strain your operational resources. They can even potentially damage customer relationships.

According to HubSpot, brick-and-mortar stores average an 8–10% rate of returns. But for ecommerce businesses, returns are typically over 18%, which can put a serious strain on any brand's operations and bank account.

Here's the good news, though. Handle returns right and give customers a hassle-free experience, and 92% of them will buy from your company again. Plus, there are ways to significantly reduce your return rate, even boosting your bottom line.

If you're wondering why customers return products — or why it's so important for your ecommerce business to minimize returns — you're in the right place. Below, we'll delve into all of that, plus provide you with 12 proven strategies to reduce returns to your Shopify business.

Ready to learn how to refine your policies, optimize your processes, and prevent unnecessary returns? Let's dive in.

Why do customers return products?

Understanding the reasons behind product returns is the first step toward reducing them. Customers may return items for many reasons, and identifying these can help you address the root causes.

Why should ecommerce businesses reduce their returns?

While returns are inevitable in online retail, minimizing them is crucial for your business's success and sustainability.

Returns are very costly for online brands

Every return carries a cost, often more substantial than it appears on the surface. Here's how returns can drain your resources:

• Shipping expenses: Covering the cost of return shipping can double the shipping expenses for that order, especially if you offer free returns as part of your customer service strategy.
• Processing costs: Handling returns involves inspecting the item, processing refunds or exchanges, updating inventory systems, and restocking, all of which require time and labor.
• Lost revenue: If returned items can't be resold at full price — due to damage, wear, or obsolescence — you lose potential revenue. In some cases, the product may have to be written off entirely.
• Inventory management: Returns complicate inventory tracking, leading to overstocking or stockouts and affecting future sales and customer satisfaction.
• Administrative overhead: Managing customer inquiries related to returns, handling disputes, and ensuring compliance with return policies consume valuable administrative resources.

According to Statista, returns cost U.S. retailers $817 billion in 2022, nearly double the cost just two years earlier, in 2020.

A good return policy is good marketing

Having a customer-friendly return policy is often a powerful marketing tool. Here's why:

• It builds trust: A clear and fair return policy allows customers to shop with confidence, knowing they won't be stuck with a product they don't want or that doesn't meet their expectations.
• It gives you a competitive advantage: In a crowded marketplace, offering hassle-free returns can set you apart from competitors with more restrictive policies.
• It encourages customers to make purchases: Customers are more likely to complete a purchase when they know that returning or exchanging an item is straightforward.
• It builds loyalty: Positive return experiences can turn potentially negative situations into opportunities to strengthen customer relationships and encourage repeat business.

Balancing a lenient return policy with strategies to minimize returns can enhance your brand's reputation while protecting your profitability.

What does a good ecommerce return policy look like?

Crafting an effective return policy is a delicate balance between protecting your business interests and providing excellent customer service. A well-designed return policy can reduce return-related losses while bolstering customer satisfaction. Let's explore the key elements of a robust return policy.

Customer-friendly rules

Your return policy should be straightforward and considerate of your customers' needs.

• Use clear language. Avoid legal jargon and write your policy in plain English. This ensures customers understand the terms without confusion.
• Implement reasonable timeframes. Offer a fair window for returns. While industry standards vary, a 30-day return window is common and generally acceptable to most customers.
• Define the conditions products must be in. Specify the condition in which items must be returned. For example, "Products must be unused, in original packaging, with all tags attached."
• Give customers flexible options. Provide choices between refunds, exchanges, or store credit. Flexibility can enhance customer satisfaction and encourage them to continue shopping with you.

Easy-to-use processes

Simplifying the return process reduces friction and frustration for your customers.

• Keep it simple. Outline the steps clearly, minimizing the actions customers need to take. For example, "Fill out the return form included in your package and send the item back using the prepaid label."
• Offer prepaid return labels. Including a prepaid return shipping label in the original shipment or offering a printable version online can make returns hassle-free.
• Build an online return portal. Implementing an online system where customers can initiate returns, track their status, and receive updates enhances the user experience.

Efficient communication (on multiple channels)

Transparent and proactive communication is key to managing customer expectations.

• Automate return notifications. Keep customers informed at every stage of the return process through emails or SMS updates.
• Provide accessible support. Offer multiple channels for customer support to address any questions or concerns promptly. You can manage all your CX inboxes in one place with OpenDesk.
• Be transparent. Make your return policy accessible by placing links in prominent locations such as the website footer, product pages, and checkout screens.

For example, athletic clothing brand Under Armour organizes their return policy with headers and bullet points to make it easy to read. They also post refund methods based on when and how items were purchased.

Continuous improvement

An effective return policy isn't static. It should evolve based on customer feedback and business insights.

• Collect feedback. Encourage customers to share the reasons for their returns. This information is invaluable for identifying patterns and areas for improvement.
• Analyze data. Regularly review return data to spot trends, such as high return rates for specific products or categories.
• Update your policy as needed. Adjust your return policy to address emerging issues, streamline processes, or enhance clarity.

12 proven ways to reduce returns in ecommerce

Now for the real reason you're here: How to reduce returns in your ecommerce business.

Reducing returns requires a multifaceted approach that addresses the reasons why customers return products. Here are 12 actionable strategies to help you minimize returns for your Shopify brand.

1. Encourage exchanges instead of returns

By encouraging exchanges, you retain the sale, enhance customer satisfaction, and reduce the financial impact associated with returns.

What to do:

• Make it easier to exchange items. Make exchanging an item as easy, if not easier, than returning it. Provide clear instructions and minimal steps.
• Automate exchanges. Use Shopify apps like Returnly to streamline the exchange process, allowing customers to initiate exchanges online.
• Incentivize exchanges. Offer perks such as free shipping on exchange orders, a small discount, or bonus loyalty points to motivate customers to choose an exchange over a return.

For example, say a customer purchased a pair of shoes that didn't fit. By making it easy to exchange for the correct size, you not only save the sale but also enhance the customer's experience with your brand.

2. Craft thorough and accurate product descriptions

Detailed and accurate product descriptions help set proper expectations, reducing returns due to misunderstandings or unmet expectations.

What to do:

• Include detailed specifications. Provide comprehensive information like dimensions, materials, weight, and care instructions.
• Use clear language. Avoid ambiguous terms and use language that your target audience understands.
• Address common questions. Anticipate and answer potential customer queries within the description to reduce uncertainty.

For example, for a piece of furniture, you might include precise measurements, material types, weight limits, and assembly requirements. This helps customers determine if the item fits their space and needs.

Backyard sauna brand Sweat Tent includes a clear drop-down detailing what’s included with each product.

Customers can easily scroll and view more details on each included item.

3. Take multiple, high-quality product photos

High-quality images give customers a realistic view of the product, reducing surprises upon delivery.

What to do:

• Show multiple angles. Capture the product from various perspectives to provide a comprehensive view.
• Include contextual images. Show the product in use or within a setting to help customers visualize how it fits into their lives.
• Allow customers to zoom in and out. Shoppers often want to see details like texture, stitching, or intricate features.

For example, an apparel brand can showcase clothing on models of different body types and sizes, as well as close-ups of fabric patterns or accents.

4. Let reviews help your customers

Customer reviews offer social proof and provide additional insights that influence purchasing decisions.

What to do:

• Highlight helpful reviews. Feature testimonials that address common concerns or unique product features.
• Encourage shoppers to leave detailed feedback. Ask customers to include information about sizing, fit, or use cases.

For example, a customer considering a skincare product can read reviews about others' experiences with the product, helping them decide if it's suitable for their skin type.

5. Optimize your order fulfillment

Efficient and accurate order fulfillment reduces errors and delays, minimizing returns due to incorrect or late deliveries.

What to do:

• Use inventory management software. Modern tools help your brand keep inventory levels accurate and prevent overselling.
• Establish quality control procedures. Set up checks to verify that the correct items are picked, packed, and shipped in good condition.
• Work with reliable shipping partners. Partner with carriers known for timely and safe deliveries, and consider offering multiple shipping options to suit customer needs.

For example, a tech retailer should ensure that each gadget is tested and securely packaged before shipping, reducing returns due to faulty products or shipping damage.

6. Develop a winning post-order experience

Keeping customers informed after they've placed an order builds trust and reduces anxiety, making them less likely to cancel or return products.

What to do:

• Send prompt order confirmations. Immediately acknowledge orders with detailed confirmations, including order summaries and expected delivery dates.
• Provide regular shipping updates. Offer real-time tracking information and notify customers of any delays proactively.
• Follow up after delivery. Send a personalized message to confirm receipt and satisfaction, and invite customers to share feedback or ask questions.

For example, an online boutique could send an email when the order is received, another when it's shipped with tracking information, and a final follow-up a few days after delivery to ensure the customer is happy with their purchase.

7. Invest in high-quality packaging

Durable and attractive packaging protects products during transit and enhances the unboxing experience, reducing returns due to damage and increasing customer satisfaction.

What to do:

• Use protective shipping materials. Select packaging materials that safeguard products against shock, moisture, and other potential damages.
• Incorporate your branding. Customize packaging with your logo and brand colors to create a memorable impression.
• Consider sustainability when choosing packaging. Opt for eco-friendly packaging options to appeal to environmentally conscious customers and enhance your brand image.

For example, a jewelry retailer might package items in branded boxes with padded inserts, ensuring the pieces arrive intact and providing a luxurious unboxing experience.

8. Develop a clear return policy (and make it easy to find)

Transparency about your return policy sets clear expectations and reduces confusion or frustration that can lead to negative experiences.

What to do:

• Make your policy accessible. Place links to your return policy in prominent locations such as your website footer, product pages, and checkout screens.
• Highlight key points. Summarize the most important aspects of your policy, like return timeframes and conditions, in bullet points for quick reference.
• Use FAQs. Include a frequently asked questions (FAQs) section to address common concerns and provide additional clarity.

For example, an electronics business might include a ‘Returns & Exchanges’ tab on each product page, outlining the policy in simple terms and linking to a more detailed policy page.

9. Identify customers who abuse your return policy

Addressing return policy abuse protects your business from unnecessary losses and ensures fairness for all customers.

What to do:

• Monitor returns for patterns. Use customer data to identify patterns of frequent returns or suspicious behavior.
• Set return limits. Clearly state any limits on returns, such as the number of returns allowed within a certain period.
• Communicate directly with customers who are in gray areas. Reach out to customers who appear to be abusing the policy to address the issue professionally.

For example, a clothing retailer notices a customer regularly purchasing multiple expensive items and returning them after wearing them. The retailer contacts the customer to discuss the policy and find a resolution.

10. Offer alternatives to returns

Providing solutions other than returns can resolve customer issues while retaining revenue and reducing return-related costs.

What to do:

• Offer partial refunds or discounts. In cases where the customer is slightly dissatisfied, offer a partial refund or discount to keep the product.
• Give them creative options. For low-cost items, allow customers to keep the product and offer to donate a portion of the refund to a charity.

For example, a home electronics company can help a customer resolve a setup issue via a video call, eliminating the need for a return due to perceived malfunction.

11. Ask your customers for feedback

Direct feedback from customers provides valuable insights into issues that may not be immediately apparent, allowing you to make targeted improvements.

What to do:

• Create ‘return reason’ codes. When customers initiate a return, require them to select a reason from a predefined list, and offer an optional comment box for additional details.
• Open up communication channels. Encourage customers to reach out with any concerns or questions, and make it easy for them to contact you.
• Send out post-purchase surveys. Send surveys after purchase or return to gather detailed feedback on the customer's experience.

For example, an outdoor gear retailer notices multiple returns citing "item not as warm as expected." Using this feedback, they can then update their product descriptions and add temperature ratings to help customers make better-informed decisions.

12. Analyze data about returns

Data analysis enables you to identify trends, pinpoint problem areas, and measure the effectiveness of strategies implemented to reduce returns.

What to do:

• Use tools to collect and analyze data. With OpenDesk, you can gather real-time customer support data that provides actionable insights to increase sales and streamline your loss prevention strategies.
• Identify high-return products. Monitor which products have higher return rates and investigate possible causes.
• Adjust your strategies as needed. Use insights gained from data to refine product offerings, improve descriptions, adjust sizing charts, or make other necessary changes.

For example, say a footwear company discovers that a particular shoe model has a high return rate due to sizing issues. They then update their sizing guide and provide additional fit information, resulting in a decrease in returns for that product.

Reducing returns in your Shopify company isn't just about cutting costs — it's about enhancing the overall customer experience, building trust, and fostering long-term loyalty. By understanding why returns happen and implementing the strategies outlined in this guide, you can significantly reduce your return rates.

Each return is an opportunity to learn and improve. Embrace customer feedback, analyze return data, and continually refine your policies and processes. With proactive measures and the right tools, you can transform returns from a challenge into a strategic advantage.

Manage your returns with all your inboxes in one place: OpenDesk

Effectively managing returns requires seamless communication and organization, especially when dealing with customer inquiries across multiple channels. Keeping track of all these interactions can be overwhelming and may lead to delayed responses or missed messages, negatively impacting customer satisfaction.

Enter OpenDesk, a comprehensive customer service platform designed to centralize all your customer communications in one easy-to-use interface. Here's how OpenDesk can transform your return management process:

Streamline communication with a unified inbox

View and respond to messages from all channels in a single dashboard, ensuring no customer inquiry slips through the cracks. You can also automate replies for common inquiries, such as return policy information or tracking updates, saving time and providing immediate assistance to customers.

Enhance customer satisfaction with personalized support

With centralized communications, your team can respond to customers quickly, improving satisfaction and building trust. You can also leverage real-time customer data to provide tailored assistance, enhancing the overall customer experience.

Ready to revolutionize your return management process? Sign up for early access to OpenDesk today and take a step toward smarter support and a more efficient, customer-centric approach to handling returns.