How chatbots can help reduce product returns

How chatbots can help reduce product returns

Table of contents

Running an e-commerce business often involves grappling with a significant volume of returns, as studies show that the average online consumer returns about 30% of their purchases. These returns not only consume your financial resources but also demand a substantial amount of your time. Are you aware that employing chatbots can be a viable solution to address this challenge?

Various reasons contribute to customers returning products, such as receiving shoes that are too large, selecting the wrong gift for a spouse, ordering multiple items for comparison and intending to return what doesn’t meet their preferences, encountering unexpected product variations, or facing issues with the purchased items. As an e-commerce company, you’ve likely encountered all these scenarios.

Although these return reasons are understandable, managing the influx of returns poses a financial burden and diminishes your profit margins. Importantly, this isn’t a unique problem but rather a widespread challenge faced by nearly all e-commerce businesses.

The double challenge faced by e-commerce

Online retailers experience significantly higher return rates compared to brick-and-mortar stores, with estimates suggesting rates as high as 30% online, while physical stores typically face 9% returns. Despite variations in return rates across industries like apparel or electronics, the overall challenge of high return rates affects all e-commerce businesses. The process of handling returns and exchanges not only adds to operational costs but also diminishes profit margins.

Simultaneously, customers now anticipate hassle-free and cost-free return options when shopping online. A seamless and free return process serves as a primary incentive for customers to choose an online store.

Striking a delicate balance between meeting customer expectations, enhancing the appeal of your online store, and managing return costs to preserve profits poses a considerable challenge. Rather than viewing returns solely as lost business, they can be seen as an opportunity to boost customer loyalty and drive additional purchases. This is where chatbots come into play, offering the potential to not only reduce return rates but also enhance customer loyalty and drive sales.

Chatbots can help prevent returns from occuring

In the effort to minimize returns in your e-commerce business, it’s important to understand the underlying causes for returns. Chatbots prove highly beneficial in this regard!

By employing chatbots for your return procedures, they effortlessly collect pertinent information directly from customers and promptly present it to you. In contrast, human customer agents would require significantly more time to accumulate the same volume of data. Consequently, chatbots enable quicker identification of patterns, such as potential issues like faulty or misleading product descriptions on your website or technical product issues, facilitating prompt resolution. This proactive approach help in reducing the overall number of returns.

Furthermore, chatbots can efficiently address common return scenarios, including handling refunds and exchanges, which we will now dive into.

How chatbots can reduce returns

In general, when a customer seeks to return a product, you encounter one of two situations: they either aim for a refund or wish to exchange the item.

This first scenario presents the highest financial impact on your business, involving not only the loss of a sale but also the responsibility to cover part of the return shipping costs and manage the return logistics in your warehouse. Nevertheless, this serves as an opportunity to gain insights into the reason for the return, enabling you to mitigate similar issues in the future.

Incorporating a chatbot into the return process proves highly beneficial for this purpose. The chatbot can directly ask why the customer wishes to return an item, thereby collecting valuable information on your behalf.

Furthermore, e-commerce chatbots have the capability to offer customers initiating a return a compelling incentive, such as a coupon for a future purchase. This strategic approach can serve as a clever long-term strategy to convert present non-buyers into future shoppers.

In the second, more economical scenario, the customer wants a return but also seeks an exchange of the item—perhaps due to an incorrect size or dissatisfaction with the color or model, prompting an interest in a switch. The smoother you make the process for customers to exchange items, the higher the likelihood that they will opt for an exchange.

By incorporating a conversational AI chatbot into your return procedures, the bot can not only respond to a return request but also proactively propose an exchange before suggesting a refund. The bot can then guide the customer through the entire exchange process. This not only enhances the exchange experience for customers but also has the potential to influence some shoppers to choose an exchange over a refund.

Conversational AI chatbots possess the capability to engage in more natural and fluid dialogues with customers, improving the conversational flow and enhancing the overall customer experience. This capability can play a pivotal role in influencing the decision-making process, whether it be opting for a refund, choosing an exchange, or deciding to shop with you again in the future.

Chatbots can facilitate the return process for customers

As previously mentioned, a simplified return process not only attracts new customers to an online store but also facilitates returning for existing customers. Why is this significant? Because people generally prefer to avoid the complexities of a cumbersome return process more than once. When the return experience at your store is seamless, customers are more likely to overcome hesitations and make additional purchases. In essence, an uncomplicated return process enhances the probability of repeat business.

Now, how can you enhance the intuitiveness of the return process?

Certainly, you should provide explanations of the return process in your FAQs on the website, in the order confirmation message, and even on the receipt included with the customer’s package. However, despite these efforts, customers often still need to locate this information, follow instructions, print return labels, attach them to packages, and determine the appropriate shipping destination. Ultimately, it remains a cumbersome task. This is where chatbots come into play.

Imagine a scenario where customers can simply use their smartphones to inquire with your chatbot about how to return an item. The bot would not only elucidate the process but also guide them through obtaining the return label, perhaps even providing a corresponding QR code directly to their phones. Additionally, the bot could send directions to the nearest return facility. Such a streamlined approach would truly constitute an easy and user-friendly return process!

How to implement a chatbot in your e-commerce business easily

In conclusion, a user-friendly return process is pivotal for e-commerce success, attracting new customers and fostering loyalty. At Born Digital, our leading conversational AI solutions can streamline your return experience. Available in any language and any channel whether it be voice, social media, or web, we help you intelligently automate your e-commerce processes and promptly assist your customers wherever they already are.

Find out how you can leverage Born Digital's Generative and Conversational AI solutions to drive business results.