Free Return Shipping Leads to Happy Holiday Customers

Unlike the joy that comes from giving or receiving a gift during the holidays, making a return and paying for shipping can be a drag. But it doesn’t have to be that way. In fact, a recent survey revealed that one of the best ways to turn holiday shoppers into repeat customers is to offer free return shipping. For many retailers, it is a missed opportunity. In the survey done by shipping retailer Shippo, 54 percent of consumers said that free return shipping is important to them and is a decision factor when comparing different merchants. Thirty-four percent of consumers said they only purchase items if the merchant offers free returns. However, 59 percent of merchants surveyed force the buyers to ship items back themselves, and only 14 percent offer free returns. Shippo CEO and Cofounder Laura Behrens Wu says this is a huge opportunity for merchants to improve the customer experience.

“Free shipping is a great marketing tactic and a great way to drive sales,” she said. “Shipping cost is the number one reason for cart abandonment. By offering free shipping, the business can remove friction in the purchase process. Additionally, free shipping can be used as a way to get shoppers to buy additional items to qualify for free shipping.”

According to Wu, there are two main questions consumers have during holiday time: 1) Will it arrive on time, and 2) can it be exchanged — especially if it’s a gift? Merchants that want to improve customer satisfaction should clearly communicate how long it will take an item to ship and when the expected arrival dates are and send updates on the shipment status. According to the survey, 69 percent of customers expect their shipments to be sent out within 24 hours of clicking “buy,” and merchants should take care to set expectations correctly.

However, when it comes to waiting for their packages to arrive, consumers are more patient. The survey found that 55 percent of consumers will happily wait two to three days for their order, and 41 percent are willing wait up to four to seven days. Only 4 percent of consumers indicated that they take advantage of next-day or same-day delivery.

For returns, the merchant can include a scan-based label with the purchase so that, if a return needs to happen, the consumer already has everything. Scan-based labels make the customer’s return process easier. They simply have to repackage the item and attach the label. Since the merchant does not pay for the label unless it is used, this offers a great benefit to customers at very little cost to both parties.

Providing a shipping label also gives merchants the ability to update a customer about a return. When retailers can let customers know whether an item is in transit, was received at the warehouse or has been processed, the customer isn’t wondering when their money will be credited back.

But the key to making returns easier might just be avoiding them in the first place.

“Additionally, using data to understand why customers are returning items can go a long way in helping retailers identify ways to avoid returns altogether,” Wu pointed out. “Merchants should track which items are getting returned and why, to see if there is a problem with the item or presentation.”

Shippo, which powers shipping for more than 10,000 retailers and marketplaces, helps ship millions of items every month. It expects to see a significant increase in its volume during the holidays. Last year, shipments grew by 55 percent week over week during the week after Black Friday and Cyber Monday. A second spike in shipping activity occurred the week of holiday cut-off dates, which last year was the week of Dec. 14.

Merchants that want to take advantage of this increase in traffic should remember that, when it comes to shipping and returns, every customer interaction is a chance to build loyalty. And that truly is a gift.