When you have a business, it is only a matter of time before you have to start dealing with returns, refunds, and exchanges and all that comes with it. Not every customer is going to walk away 100% satisfied every time they purchase goods or services from your business, so it is important to have a good system in place when it comes to handling these kinds of issues.
How Returns Impact Your Bottom Line
Return requests can affect your business financially and can even result in lost profit on some orders. When someone walks away unhappy with what they received, that word of mouth can also harm the business ultimately as well. It is important to always address the concerns that come alongside return and exchange requests.
Strategies for More Profitable Returns and Exchanges
When you implement strategies for more profitable returns and exchanges, you are also cutting down on the customer service hours it takes to resolve these types of issues.
The first thing you need to do is set up a system and a more formalized policy that dictates how to handle this. Doing so means that all returns are treated the same and you won’t have to continue to handle everything on a case by case basis.
Next, you can turn returns into exchanges. Instead of losing money on a product that is being returned, offer the exchange. It will create stronger profit margins and minimize the losses.
You can also sell product warranties. Warranties on more expensive products can help the business save money when it comes to replacing or repairing damaged merchandise.
Another strategy to employ is upselling or cross-selling on exchange requests. A customer is given a store credit for their return and will then go back to the website to use the credit where they will be met by new products that might complement what they had exchanged or replace what was returned.
Following these simple strategies can make a big difference in keeping your business cash positive and thriving.