Retailers are urged to view returns management as loyalty drivers

15% of customers abort a transaction if the return policy is subpar.

- Diana Dominguez

Returns management is now emerging from the shadows to claim its rightful place as a core element of any retailer’s customer strategy, as trends show that it is one of the most effective means of retaining customer loyalty and satisfaction.

However, some retailers still choose to shelve this concern, resulting in a disorganised or dysfunctional system.

“The industry needs to shift its mindset from viewing the return experience as a revenue drain to seeing it instead as a loyalty driver,” Michelle Evans, global lead for Retail and Digital Consumer at Euromonitor International, shared in an interview with Singapore Business Review.

How to handle returns

Returns can be prompted by a variety of reasons but one thing’s for sure: a returned item came from an unhappy customer. To counter this, retailers must deploy strategies that would work best for their brand.

For example, Evans said that for some brands, offering their customers generous compensation has proven to be an effective in retaining the consumers' patronage.

“Innovative retailers can create returns policies that offer more generous terms on higher margin goods. For example, US-based retailer Target offers a more lenient return policy on its 45 store brands,” Evans told Singapore Business Review.

“Another option is to offer a more favourable returns policy as part of a loyalty membership programme to reward those who regularly shop with the brand,” she added.