Returns are an unavoidable part of eCommerce, but too many retailers treat them as a cost to be reduced rather than a strategic asset.

At StoreFeeder, we believe returns data should be more than just an accounting exercise, it should be a tool for smarter decision-making across your business.

Many retailers make the mistake of looking at returns in isolation, leading to reactive policies that can damage customer loyalty and profitability. The key to turning returns from a burden into a business advantage? Looking at the right data, the right way.

The wrong way: Viewing returns as a month-to-month cost

A common pitfall in returns analysis is treating them purely as a financial metric, comparing sales and refunds in the same reporting period. This leads to skewed perceptions, especially after peak sales events.

For example, a retailer might see a spike in returns after Black Friday and assume that discount shoppers are more prone to returning. However, this assumption fails to account for the sheer volume of sales in November, of course, December returns will look higher!

This misinterpretation can lead to rash policy changes like implementing paid returns without a real business need.

The right way: Improved returns analysis

Instead of viewing returns as a short-term financial loss, retailers should use deep analysis. This approach groups returns data by the purchase date rather than the return date, giving a much clearer picture of return rates and product performance over time.

How StoreFeeder helps you implement better returns analysis

StoreFeeder offers a seamless way to track and analyse returns with a focus on meaningful insights. Here’s how:

• Order-level tracking: Our system captures detailed purchase data, including product details, order dates, and return timestamps, allowing you to build an accurate timeline of returns.
• Integrated returns & sales data: StoreFeeder synchronises returns data from all your eCommerce platforms (like Shopify, eBay, Amazon, TikTok and more), ensuring a comprehensive view of return patterns.
• Visual reporting & dashboards: With StoreFeeder’s powerful analytics tools, you can generate reports that track returns by at a wider level, giving you clear insights into product performance and customer behaviour.

Different types of returns strategies for eCommerce businesses

To manage returns effectively, eCommerce businesses can adopt different strategies based on their business model, customer expectations, and operational capabilities. Here are some common approaches:

• Free returns policy: Many retailers offer free returns to enhance customer confidence and increase conversions. However, this needs to be balanced against the costs involved.
• Paid returns policy: Some businesses charge a fee for returns to discourage excessive return rates and cover operational costs.
• Exchange-first approach: Encouraging customers to opt for exchanges instead of refunds helps retain revenue and maintain customer loyalty.
• Restocking fees: Applying restocking fees for certain product categories (e.g., high-value or bulky items) can deter unnecessary returns while still offering flexibility.
• Store credit over refunds: Providing store credit instead of cash refunds keeps revenue within the business and encourages repeat purchases.

Each strategy has its pros and cons, and the right choice depends on a business’s target audience, product types, and financial goals.

StoreFeeder helps businesses analyse their return patterns and determine the most effective strategy for their needs, not just make knee jerk reactions when returns are higher due to the time of the year.

Real-world example: The Black Friday returns myth

A major online retailer using StoreFeeder’s analytics initially feared that Black Friday shoppers were returning at unsustainable rates. However, a data based analysis revealed that return rates were in line with, or even lower than, other periods. The perceived spike in returns was simply due to higher order volumes in November. Thanks to StoreFeeder’s accurate reporting, the retailer avoided introducing unnecessary paid returns, which could have alienated customers.

Why this approach works:

• Better business decisions: Data based insights prevent reactionary policies that might harm customer experience and retention.
• Smarter inventory management: Understanding the real return rates of each product helps retailers make better stocking and restocking decisions.
• Proactively reducing returns: By identifying return reasons (such as poor fit or unclear descriptions), retailers can make strategic improvements that lead to fewer returns overall.

Ideas for reducing returns

Of course, the validated picking and despatch tools within StoreFeeder WMS will ensure that the customer receives what they ordered, so returns for incorrect products being sent will be at a minimum.

So, reducing returns for other reasons is a key priority for eCommerce retailers looking to improve profitability and customer satisfaction. Here are a few strategies:

• Improved product descriptions: Clear, detailed descriptions with accurate specifications help set customer expectations.
• High-quality images and videos: Providing multiple images and videos showcasing the product from different angles can reduce return rates.
• AI-powered sizing and fit guides: Implementing size recommendations or virtual fitting tools can minimize returns due to incorrect sizing.
• Better packaging and shipping practices: Ensuring products are well-packaged reduces damage-related returns.
• Customer reviews and Q&A sections: Encouraging customer reviews and addressing common concerns proactively can help new buyers make informed decisions.
• Proactive customer support: Offering pre-purchase customer support (such as live chat) can prevent returns by addressing questions before checkout.

Final thoughts

Returns data isn’t just about mitigating losses, it’s about making better business decisions. Retailers that rely solely on month-by-month financial reports risk drawing the wrong conclusions and making costly mistakes. With StoreFeeder’s advanced analytics and integrated returns function, you can gain a deeper understanding of return patterns, improve operational efficiency, and drive sustainable growth.

Want to see how StoreFeeder can help you optimise your returns strategy? Get in touch today to learn more

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