Veronica Nnensa and Freeda Mulenga of Kuwala
Before Jérôme Gagnon-Voyer launched his online retail startup Cambio Market with business partner Gelaine Santiago, he spent many hours researching what other retailers were doing when it came to implementing return policies. He knew if Cambio Market was going to be successful, it had to have a solid return policy in place.
"It's all about trust," Mr. Gagnon-Voyer says. "Online, people are sometimes unsure about what they might be getting. If you make it overly complicated to return something, maybe they won't order from you in the first place."
Returns might not be the first thing that comes to mind when small-business owners get into the retail industry, but it's important that they get it right. Not only does a good return policy build trust in your brand, it can also play a role in reducing the number of items that get brought back.
Suthamie Poologasingham, a senior advisor on e-commerce for the retail advisory firm J.C Williams Group, says offering free shipping for returns is an important part of getting customers comfortable shopping with a retail business. She says some companies provide pre-paid labels to customers that they can use to return items. That is a cost retailers must bear. However, they must keep in mind that if they don't provide it, they run the risk of losing customers who are miffed they have to pay to return a product they didn't like or want.
"Free shipping could be cheaper than getting that customer back through other marketing means," Ms. Poologasingham says.
Toronto-based Cambio Market sells a variety of products, from jewellery to greeting cards and artisanal bags, made by social enterprises in several countries. Because customers can't touch and feel what Cambio Market is selling, the risk of returns is greater than if it had stores where people could check out the inventory in person.
Mr. Gagnon-Voyer says his business provides free shipping and a full refund to customers who receive damaged products. But if a customer just wants to return an item, they will only get a refund for the purchase cost of the item, and the customer must pay for any shipping and handling charges when returning the product.
Daniel Baer, a retail expert with EY Canada, says while customers like to see free shipping provided, there are other ways retailers can address the issue if they feel that option is too costly. He says retailers can use returns as an opportunity to find out why they are happening in the first place. "Take advantage of the return. Are there specific products that are always being returned? Is it a size problem or a shape problem? There could be controllable reasons for why people are returning things," Mr. Baer says.
For retailers selling their products exclusively online or for those who sell both in-store and online, Mr. Baer says company websites must have as much information as possible. He says size charts, good graphics, three-dimensional views, videos and even customer reviews of the products are all information than help inform consumers and ensure they aren't dissatisfied by what they get in the mail. "Think about what the customer would want to see," Mr. Baer says. "They can't touch the product, so they want as close to an in-store experience as they can get."
Veronica Nnensa, co-owner of Kuwala Inc., a Toronto-based online boutique that sells African-inspired clothes and accessories, has taken that advice to heart. Kuwala doesn't provide free shipping for returns. But its website provides shoppers with the kind of information that should keep returns to a minimum. It features photos of its products that you can zoom in on. There are product descriptions, size charts, colour schemes and customer reviews.
Kuwala doesn't have a store where customers can try on things in person. Instead, co-founders Nnensa and Freeda Mulenga have made a point of displaying their wares at fashion events and hosting pop-up shops in the Toronto area. "By having these pop-up shops where customers can try on the stuff, it eliminates the need for returns," Ms. Nnensa says.
Experts say getting customers to make returns in person rather than by mail must also be encouraged, although this is tougher for online retailers to accomplish than it is for those who sell their products in stores.
"Push customers to come back to the store," Ms. Poologasingham says. "That way the sale might be saved or augmented."