Flexible return policies key to e-commerce success

For online shoppers, the ease of returning a product is just as important as the purchase itself. A seamless returns process isn’t just a part of a good customer service journey; it may prove to be a competitive advantage in the e-commerce space.

A recent FedEx survey conducted in the US highlights just how much return policies influence consumer behaviour, with two-thirds of respondents considering an online retailer’s return policy before checking out.

Nearly 30% admitted that the ease of returning products directly influenced whether they completed a transaction. Consumers are making it clear that flexibility and convenience are essential when it comes to online shopping returns.

We’ve also seen a continual rise in no-label, no-box returns and growing demand for flexible drop-off options, which reinforce the need for retailers to offer solutions that make returns more seamless for consumers.

Opinions on the current ease of returns are split. While 51% of consumers believe the returns process has improved, 32% remain neutral, and 17% feel it has become more challenging. Millennials (56%) and high-income groups (58%) are the most optimistic, while Gen X (21%), Gen Z (18%), and lower-income consumers (18%) express scepticism. These varying perspectives highlight opportunities for retailers to refine their return policies and improve communication around them.

In today’s increasingly competitive market, a flexible return policy can be a game changer. Many retailers now offer free returns or extended return windows, recognising that an easy returns experience can lead to higher conversion rates and improved customer satisfaction.

Others are using innovative approaches, such as virtual try-on tools and ‘bracketing’ – where shoppers receive multiple sizes or colours and return what doesn’t fit – to reduce uncertainty and enhance the shopping experience.

Increased returns do come at a cost for the business.

Some businesses opt to limit free return shipping for customers who frequently send items back, while others view returns as an essential part of customer service. Striking the right balance between minimising returns and making the process convenient for customers is key.

Retailers must also consider return timeframes. For seasonal or trend-driven products, shorter return windows help prevent stockpiling of unsellable inventory, whereas extended holiday return periods can improve customer satisfaction during peak shopping periods.

While unlimited free returns aren’t always feasible, a simple and user-friendly returns process can also encourage repeat business. Providing pre-printed address labels, example forms, and even reusable packaging makes returning items easier at a relatively low cost. Small changes like these can have a big impact.

Balancing customer expectations with operational costs is key when designing exchange policies. As online shopping evolves, retailers that prioritise seamless returns will be better positioned in an increasingly convenience-driven market.

But creating an effective returns policy takes time and a little trial and error.

Look at what others in the industry are doing, talk to your customers about their needs, and work with trusted partners to streamline the back-end process. It’s worth the effort in the end, as a well-designed returns policy often means more returning customers.

Gregory Saffy is the managing director of operations for Sub Sahara Africa at FedEx.