Try It Free
January 7th, 2010
Let’s face it, not everyone can afford to have the same amount of returns and refunds that Wal-Mart can have and still succeed beyond all bounds. And it doesn’t help that the holiday season’s high sales is followed by lots of returned merchandise in the new year. If you think about it on a per-purchase level, it is actually costing you money without a monetary return. You sell the product, then process the order, then wrap up the product, and then ship it. Later on, the customer decides to send it back and then you have to repackage it and put it back on the shelf. Tough, isn’t it?
Here is a fact: as long as you have a refund policy, then refunds are inevitable. Customers will return products for all the reasons in the world. But here comes the diamond in the rough: if you ask the customer the reason for the return then you are sitting on a goldmine of information that help you improve your product pages on your site.
Just like with negative reviews, showing the reasons for return on your product pages shows the customer that you are open and are not trying to hide anything with them. Rather, you are trying to help the customer make an informed purchase decision. You can include the reasons for return into the description of your product or slap it under one of the tabbed boxes (as we discussed in previous blog entries).
Sure, why not. One way of doing it is how Shoeline displays a Return-O-Meter for every product page. This is a great way of showing the shopper just how often the product gets returned.
Or you can do it the traditional way and just display the reasons for return as text just as you do with customer reviews, which of course would entail more details and would naturally provide more useful information for the shopper. Furthermore, if you really want to excel in customer service, then you can respond to reasons for return by providing other solutions or recommending alternative products. Here is an example that was provided by Lindas Bustos of GetElastic.com:
“Reason for return: Brought the desk home and it was not the right white for our daughter’s room. Drawers also a bit too small.”
Staff tip: “This desk is a very creamy white (a bit of a yellow tint) and may not look right if your walls are white-white or the decor has bluish white or grayish white in it. Looks good in rooms with pink, yellow, orange and other warm tones. The drawers are 8×12×6″ which holds items like crayons, CDs, jewelry and small toys but may not be suitable for larger toys or books.”
You tell us. Or should you go visit Amazon to find the answer to this question? We will give you a hint: “What Do Customers Ultimately Buy After Viewing This Item?” Does that sound familiar? If you guessed this same feature that Amazon provides on their site, then you are on the right track. This feature is a cross-selling strategy that can help customers avoid buying the wrong product based on the actions of past browsers of the same product. Have a look for yourself.
It’s simple, isn’t it? The more open you are about why customers returned a certain product, and about what customers bought after viewing that product (as in Amazon’s case), the more trust you will build with your customers. Therefore, they will favor your business over others and make many happy returns to your site, because they know that your site is set up in a way that can help them make more informed purchase decision. It’s a win-win situation!
There are numerous studies that suggest customers expect and demand free shipping. Just have a quick look at the following stats:
According to David Bell, marketing professor at the Wharton School, free shipping that saves the consumer $6.99 instead of a discount that saves them $10, is more appealing. We still don’t know the exact reason why. Probably something that has to do with psychotactics or some other psychological reason on how the brain works when consumers are making a purchase decision.
But according to Linda Bustos of Get Elastic, there are a couple of theories for why consumers prefer free shipping over discounts:
The desire to win could be what draws these shoppers to prefer free shipping over discounts. Shopping online provides advantages over shopping in-store, where shopping online allows consumers to compare prices, find the lowest prices, avoid parking lots and lineups. The shipping charge seems to reverse that advantage where it raises the total price paid and is perceived as being a “convenience tax.” A dollar discount is possible to find in-store, so finding one online doesn’t necessarily justify the shipping cost.
The consumer may think that since the product is already marked up, it’s easy for the retailer to slash on the price and thus offer a discount. But dropping the shipping charges costs the retailer money, and indicates to the consumer that they have “won.”
According to Dr. Flint McGlaughlin, dollar discounts devalue product, and the perceived value of the incentive can never exceed $X (where X is the amount of the discount). However, the value of free shipping could be much higher depending on what the customer imagines shipping costs would be.
So, with all that being said, should you offer free shipping or a discount? The answer with a shopping cart that only allows one of these methods is more difficult, but with the Halixo shopping cart the answer is a lot more easier since you are able to offer either both or test each one out separately to see what brings in more sales.
Some of our clients offer both discounts and free shipping, but put a minimum price on the total sales value in order to qualify for free shipping. This way, you are getting the best of both worlds but with a safeguard to prevent free shipping on small orders. So, the point is, you should test it out to see what works best for your customers.
If your site does not allow shopper to make informed decisions on your site, then they are most likely to go to your competitors. But what does it mean to help them make informed decisions or purchases? One of the best ways to help your shoppers make informed purchases is to help them compare products in an easy manner on your site, using a tool such as a comparison matrix or chart.
Let’s take a look at the below screen shot to see what a comparison chart looks like.
You will notice that the two products are side-by-side, with a full comparison and contrast of the features for each product. This was the result of merely clicking on a button next to the two products that read “add to compare”, and voila, you’ve got a comparison chart. With the Halixo shopping cart, this feature is fully functional and is at its best in terms of usability and relevance. We have added it to ensure that you help your shoppers make informed decisions when they are making purchases on your site, because if you don’t, then someone else will!
This is especially the case when you have many products and categories and each category has products that, although belong to the same group, have many differences in pricing and specifications. However, this sort of tool will not make sense if you’re showing “cross-sells” of related products that you hope the customer will buy in addition to the product being viewed. You shouldn’t compare headphones to mp3 players, for example.
