What else can catalogs do? Let’s talk return rates.

I’ve been working with a new client and in our first group meeting, where we get to know the company, we talked about pain points. One of the things that came up was that they had a 20% return rate. For some companies that is cause for considerable alarm, for others it’s not even going to raise and eyebrow. Return rates are something that catalogs can, and should, try really, really hard to improve.

Is it worth the effort?

The customer usually pays for shipping, but the item can never be sold for full price again. Even returned items have value and can be liquidated, but that’s always an expense, and frequently a loss. The real cost of returns though, is in customer satisfaction. The customer you worked so hard to get just got something they were unhappy with. You just lost street cred and it’s much less likely they will make another purchase from you. Lifetime value is what makes the numbers work. Unless your return rate is virtually zero, I would say time spent on return rates was worth the effort.

What is causing returns to be high?

The first thing you should look at is the why. Some products just have higher return rates. Bathing suits have higher return rates than socks. The why isn’t the product. The why is: what didn’t your customers understand about the product? If you explain the benefits, and you explain the features, and you show the customer an accurate representation of the product and explain any other meaningful product information, customers should know exactly what they’re buying—which reduces returns. You can’t fix buyer remorse, but you can fix sizing issues, color concerns, materials concerns, and more.

How do you figure out what the problem is?

First thing to do is look at the return rates for all of your products. If some have very high return rates, look at what they have in common. Is it product category? Is it price? Is it color? Is it content, i.e. fabric or material? Is it time of year? Is it a specific vendor? Did the products recently appear in a sale book? Are there other similar products that don’t have the same return rate? Is it the catalog presentation? Does the photo look darker, or lighter than the product? Are they square ups, model shots, or silos? Do they have the same size presentation? Are the swatches large or small? Are they swatches rather than small images (mini-me’s). Are they numbered rather than named? Are the swatches easy to see? Is it clear which product they go with?

Now look at the items with the lowest return rates and ask the same questions. You should start to see patterns.

Where do I get the return data?

Your merchants will have the return data. It has been my experience that merchants are surprised when creatives ask for return data. Returns are something that I don’t always see in post mortems.

There are things that make you money and things that save you money. I always focus on the things that make money first, because you can’t save your way to success. Returns are gremlins that cost you customers. They are worth fixing, maybe not first thing, but soon there after.

I hope we see you at Cats and Bacon 2016 this Wednesday in the Cat-U Pub! It’s a fun and irreverent look at all things, good and bad, that Janie and I have collected over the year. I’m told that previous years have been laugh out loud funny, but since we can’t actually hear you in the Pub, you’ll have to let us know what you think.

All the best,

Sarah Fletcher

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