Are your competitors starting to offer free shipping? Think you could attract more business by offering it? Increasingly, businesses are starting to offer free return shipping as an incentive to attract more customers and increase conversion rates. I'll be going through 4 main reasons why you should try to fit free return shipping into your e-commerce business strategy. Reason 1: Your customers are asking for it. In research I've conducted with our own customers (in the home decor industry), I had learnt the following two things:
~25% of respondents claimed that free return shipping would be the one promise that would make them choose our company over a competitor's
~30% of respondents claimed that color accuracy was an issue when purchasing online
What's important to gather from this data is that free return shipping is important to the customer, especially when they are unsure about how the product will look like in real life. Making the return process easier will help alleviate the worries of not being able to handle the product before purchasing.
Reason 2: You'll make more money. After all of this, you might be thinking, won't I lose money by offering free shipping? While this is a sound concern, research shows that you'll most likely end up making higher profits by offering free return shipping. Best Buy and Johnson and Johnson both ended making more profits by introducing more lenient return policies. Furthermore, shoppers are 81% less likely to purchase again from a website that does not offer free return shipping.
Reason 3: You'll (probably) be the first to offer it. Free return shipping is still not everywhere, so it's an easy chance to help your brand stand out and offer a "wow" experience to the customer. But, you'll have to act fast.
Left: Google Trends Free Return Shipping
As this table shows, free return shipping is an increasing expectation that’s in the consumer’s mind.
Furthermore, a study funded by UPS and conducted by Harris Interactive stated that "Two-thirds [of customers] (65%) expect to be influenced by free ground shipping, and more than two-fifths (44%) expect to be influenced by free return shipping." It's evident that free return shipping will become adopted by companies trying to stand out from the rest.
Reason 4: It tells your customers that you believe in the quality of your product. For the same reason companies offer lifetime warranties, you should offer free return shipping. It effectively communicates to the customer that you are confident in the quality of your product. Once you put your money where your mouth is, customers will be more receptive to your offer. If you absorb some of the risk, the customer will feel more comfortable with the thought of making a purchase, which, in turn, will improve conversion rates. Simply put, free return shipping improves customer loyalty.
This is why eBay (and, to an extent, Amazon*) already require sellers to offer it. Both eBay and Amazon pride themselves on offering an amazing customer experience and especially a customer experience that rivals going to brick and mortar retail stores. By offering free return shipping, you are effectively making shopping online more convenient than going to the store. The customer neither has to go to the store to return the item, nor do they have to pay for someone to take it from them.
*Amazon only requires free return shipping on fashion items. This is mainly because, for these items, you have to "try it on" and see if it works before making an informed decision. It's hard to decide from a picture whether or not something will fit. So, that being said, it's really important to offer free return shipping if you're in the business of selling fashion items.
Ultimately, you'll have to decide whether or not free return shipping is right for your business. However, what is clear is that in the near future, companies will increasingly start to offer free return shipping.