How to reduce customer returns to your start-up

Whether your business offers products online or through a brick-and-mortar shop, returns can be part and parcel of sales – but how can you reduce the number of items being returned for a refund?

The annual value of retail sales in the UK opens in new window has steadily increased over the past decade, with over four in five UK consumers buying products online opens in new window and the most common purchases opens in new window being clothing and shoes.

Perhaps you run an online clothing business opens in new window or tech accessories store, and your customer base is slowly growing.

But while you might take every care to make sure you sell good quality products as described, not every purchase goes according to plan, and some customers may decide they’d like to return their items.

While returns can be a normal part of business, a high return rate can increase costs, result in additional wastage, and reduce profits opens in new window.

 

Understanding UK Consumer Rights

Understanding the rights of your customers to return goods is essential in ensuring your start-up complies with UK consumer rights laws opens in new window and trading regulations.

The Consumer Rights Act opens in new window 2015 covers customers’ and businesses’ rights regarding buying and selling products and services.

If a customer changes their mind about a product they have bought, or the item is faulty, the law covers the conditions under which they have the right to return it.

This can vary depending on whether the goods were purchased in a store or online – so it can pay to understand what rules apply to your start-up.

 

Challenges of a high return rate

Handling a large number of returns can prove a challenge for several reasons:

• there could be a negative impact on your start-up’s finances opens in new window
• you’ll spend extra time and effort inspecting and restocking or writing off returned items
• it can harm customer trust and your brand reputation opens in new window
• restocking issues could lead to write-offs and a loss of profit
• you could have cash flow issues opens in new window as money is returned to customers rather than used to pay suppliers
• returns can require additional shipping and handling costs opens in new window that can eat into profits
• there could also be a negative environmental impact due to additional transport needs.

 

How to help reduce the number of customer returns

With a solid strategy in place, you can take steps to avoid a high volume of returns.

 

1. Write accurate product descriptions

If your customers understand exactly what they buy from you, they are less likely to return goods.

If selling goods online opens in new window, ensure your product descriptions are easy to read, detailed, accurate and well-written.

Ensure your customers have all the information they need before they reach your checkout – and you’ll help reduce the number of returns your business receives.

Detailed product descriptions can also help your website with its SEO rankings opens in new window.

 

2. Take high-quality product photos and videos for marketing

Use high-quality photos and videos of the products you sell.

If your imagery clearly shows the small details that influence your customer’s purchasing decisions, they will be less likely to discover things they dislike or don’t need when they receive their product.

Clear, high-quality photos and videos will also improve your website’s design opens in new window – and potentially your brand’s reputation.

Remember to optimise your images and videos for mobile shoppers – smartphones were the most popular shopping tool opens in new window in 2023.

 

3. Provide clear size guides

According to the British Fashion Council, incorrect sizing is the top reason why clothes are returned opens in new window.

While we have a loosely accepted set of sizes in the UK, exact measurements for each size are often decided by brands, making it difficult for shoppers.

To avoid buyer frustration and reduce returns, provide an accurate size guide to help them find the right fit the first time.

 

4. Allow customers to ask questions before purchasing

Sometimes, a product description or FAQ page doesn’t have the information a customer is looking for.

By allowing customers to ask questions opens in new window and offering extra details or reassurance, you could help boost purchasing confidence in your products and company – and potentially reduce the number of returns.

Consider adding an email or ‘Contact Us’ form to your website, or even investing in a live chat service so customers can ask your employees questions directly.

If you have a physical store, ask your customers if they would like any help as they are browsing.

 

5. Ensure all online orders are packaged securely

Customers are entitled to a full refund if purchased goods arrive damaged or unusable.

In most cases, your business is responsible for the entire delivery – from dispatch to doorstep.

Ensuring all your orders are packaged securely and delivered safely can be a simple fix regarding reducing the number of returns you receive.

Monitor the performance of your delivery service too.

A high level of complaints about poor delivery could signal something isn’t right with your existing service, and you might want to consider shopping around for a new delivery partner.

 

6. Encourage customer reviews

Positive customer reviews can help drum up more business – but reviews are a great source of feedback too.

Regularly review customers’ opinions, identify their needs, and consider changes to improve your business and products.

Consider encouraging customer reviews via short polls or using dedicated review sites.

Consider adding website pop-ups or targeted emails with links after purchase, adding a line to product documentation, or simply asking your customers to leave you a review when you sell to them in person.

Products better suited to customers’ needs might lead to fewer product returns.

 

7. Offer exchanges

Exchanges are an alternative to refunds and may have less of an impact on your profit margins or customer relationships.

Product exchanges allow you to retain custom while providing the customer with a suitable alternative.

This can protect your cash flow opens in new window as well as the reputation of your brand.

 

8. Offer an extended returns period

Under the Consumer Contracts Regulations, you must refund the customer within 14 days of receiving the returned item – and customers do not have to give a reason for returning an item.

Consider allowing customers a longer refund period than the legal minimum, which can help foster a good relationship and help them buy confidently.

The extra time makes things easier for your customers, and happy customers can become loyal to your brand opens in new window.

 

 

Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.