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How DTC Businesses Should Think About Returns This Holiday Season

how-dtc-businesses-should-think-about-returns-this-holiday-season
How DTC Businesses Should Think About Returns This Holiday Season

There is a certain lifecycle a product goes through between the brand and the customer. Customers may need to return their purchase for one reason or another, and the way that a business addresses this process can largely impact the lifetime value of the customer (LTV) and the perception of the brand itself. 

Especially in today’s economy where costs are at an all-time high, it’s important to solidify your return strategy as a DTC business to ensure you keep customers happy without breaking the bank. Below we’ll go over some of the strategies that businesses can put in place during the holidays to protect themselves and their customers in the return process.

Key takeaways

  • A business's approach to handling returns can significantly impact customer lifetime value (LTV) and the perception of the brand.
  • To protect your customers, maintaining open communication and making the return process easy and transparent is essential.
  • Setting a clear return policy, providing alternatives when traditional returns aren't feasible, and effectively communicating these policies to customers is crucial.

Protect your customers

First and foremost, addressing the customer in the returns process is crucial. Not only are they the ones purchasing what you’re selling, but they’re also inadvertently brand advocates—but usually only when they’re happy. 

It might seem counterintuitive to make it easy for customers to return products, but in a similar way to how it may feel odd to make it easy for customers to cancel subscriptions. The point is not in the outcome of what the customer does, but in how they feel about their experience doing it. There is no louder talker than an unhappy one, so keeping your customers happy during what could be a tedious process is truly the difference between a positive and negative review.  

So what does this mean exactly? 

It means keeping constant open communication throughout the whole return process. Make it easy for customers to figure out how to place a return, know what the return process looks like, and be notified when the return is processed. 

It also means that, depending on how many resources you have, you may need to invest in additional help to run your customer service or returns process. Vendors like Gorgias for customer support or Loop for returns can be instrumental in running a smooth ship. Using third-party vendors can help to automate and streamline the customer service process, alleviating the stress on both the customer and the business. 

Protect your brand with a return strategy

Of course, beyond protecting your customers, you’ll also want to protect yourself. This entails a few things:

  1. Setting your return policy
  2. Providing alternatives when necessary
  3. And again, communicating these to your customers

Setting your policy

Returns may not make sense for every business. Certain products you simply cannot return due to certain regulations like health and safety concerns, while other products may have a high risk for fraudulent returns. It’s crucial to understand whether offering returns to your customers makes sense, and then set your policy clearly around that. 

Alternatives to the traditional return process

If you want to allow customers the flexibility of parting ways with their purchase without offering a traditional return, there are alternatives that are readily available today:

  • Creating communities for customers to buy, sell, and trade
  • Offering the option to get a refund and “re-gift”
  • Donating the returned product instead of keeping it in inventory
  • Instead of offering a refund, offer credit as part of a loyalty program
  • Subsidizing the return, where the customer pays an added cost to make a return, or a portion of the refund is used toward associated costs

How you communicate the policy matters

Products like consumable goods may be returnable or refundable, but not resellable. In this case, offering returns is more a gesture of goodwill for your customers but is inevitably a loss of money. So, it may be best to offer alternatives to returns if you don’t feel your business can handle the financial strain—or, to educate customers on what happens to their returned products as an opportunity to extend your brand narrative. 

Make your return policy clear and concise. Most often, businesses have their policy housed in a separate FAQ page or Shipping and Returns page. Not only does this make it easier for customers to find, but it also makes it easier for business owners to use it as a protection against dissatisfied customers. 

A strong return strategy encourages customers to return, too

As we approach the holiday season, DTC businesses must adopt a thoughtful approach to handling returns. Recognizing the pivotal role customers play in shaping your brand’s reputation, it’s imperative to prioritize their satisfaction throughout the return process. Remember, it’s not about the end result but the experience that counts. A robust return strategy isn’t just about managing returns; it fosters customer loyalty by demonstrating your commitment to their satisfaction. This holiday season, make returns a positive experience and watch your brand thrive.

Special thanks to our friends at ReCharge Payments for their insights on this topic.
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