Should Your eCommerce Store Offer Free Return Shipping?
January 11, 2023
by Rebecca Fox

When deciding whether to offer free return shipping, it’s important to consider the pros and cons, and consider factors such as the cost of providing free return shipping, the impact on the customer experience, and more.

What’s the Difference Between Free Return Shipping and Free Returns?

While “free returns” and “free return shipping” are often used interchangeably, they don’t always mean the same thing.

“Free returns” means not charging customers for making a return, i.e not charging restocking or processing fees, while “free return shipping” means covering the cost of customers shipping returned items back to your warehouse or fulfillment center. Free return shipping is usually offered by providing customers with a pre-paid return shipping label to attach to their package.

It’s up to you to decide what your store offers. As you make a decision for your store, take into account the pros and cons of offering free return shipping.

Pros & Cons of Offering Free Return Shipping

When considering whether offering free return shipping is the right choice for your store, it’s important to weigh the advantages and disadvantages. On the one hand, free return shipping can lead to increased sales and customer loyalty. On the other hand, it may also lead to an increase in return fraud and cost your store a considerable amount of money. 

Consider all the pros and cons before deciding whether to offer free return shipping and if so, under what conditions.

Pros of Offering Free Return Shipping

Free Return Shipping Boosts Sales

Offering free return shipping is a great way to show your customers that you care about their satisfaction and are willing to go the extra mile to make sure they have a positive experience.

Customers are more likely to feel confident making a purchase if they know they can return items with no return shipping charge. This can lead to a higher conversion rate and more loyal customers in the long run. 

Customers Expect Free Return Shipping

79% of customers say that free returns are important to their purchase decisions, so offering free return shipping can help improve the customer experience.

Although customers increasingly expect not to be charged for returning items, less than half of eCommerce stores offer free return shipping, so offering free return shipping can put you at an advantage.

Offering free return shipping reduces friction in the returns process for customers, creating a smoother and more enjoyable customer experience.

Free Return Shipping Increases Customer Loyalty

Free return shipping helps increase customer loyalty and encourage repeat purchases, making it an effective way to boost sales and provide customers with a positive shopping experience.

With free pre-paid return shipping labels, customers can easily return and exchange items without having to pay for return shipping, increasing the likelihood that they will become repeat customers and recommend your store. In fact, 86% of customers say the option of free returns will make them loyal and more likely to keep coming back to a store.

Cons of Offering Free Return Shipping

Offering Free Return Shipping Costs Your Store

While offering free return shipping may help attract more customers and sales, it comes at a cost. 

Many online stores are hesitant to provide free return shipping because of the impact it can have on profit margins. 

Consider the associated costs when deciding whether to offer free return shipping. Depending on the item’s value and shipping costs, you might want to offer free return shipping on some items and not on others.

Free Return Shipping Can Increase Return Fraud

Offering free return shipping can be a potential risk, as customers may take advantage by engaging in return fraud such as bracketing, where customers buy several size or color variations to try at home and then return them, or wardrobing, where customers purchase an item, use it, then return it for a refund.

Return fraud can be costly, as it often results in lost profits, damaged inventory, and reduced customer loyalty. 

Return fraud can be reduced by limiting return conditions as well as identifying and mitigating fraudulent returns using an automated returns management system like ReturnGO.

When Should You Offer Free Return Shipping?

Free return shipping doesn’t have to be all or nothing. There are situations where offering free return shipping is beneficial for your store, and others where the costs might outweigh the benefits. 

Return shipping can be used to encourage exchanges rather than refunds, as a loyalty reward, or as an incentive during the holidays.

Offer Free Return Shipping as a Loyalty Reward

Free return shipping can be a great way to reward customer loyalty and boost customer retention. This kind of incentive encourages customers to stay loyal to your store, as customers recognize that their loyalty is being rewarded. 

Loyal customers are much more profitable to your store than new customers, as the average amount spent per purchase by loyal customers is 67% higher than by new customers.

Providing free return shipping to your most loyal customers is a way of acknowledging their continued support of your business, and is a good incentive for other customers to spend more in order to qualify for this added benefit.

Offer Free Return Shipping on Exchanges

Encourage customers to exchange their items by offering free return shipping only for exchanges. This keeps the revenue within your store and makes your customers more likely to return for future purchases.

Exchanges are an excellent way to maintain and enhance customer relationships, as they can help retain revenue. Customers who have a positive exchange experience are more likely to purchase more items from you in the future, as well as recommend you to their friends and family. 

Offering free return shipping exclusively on exchanges is a great incentive for customers to request an exchange instead of a refund.

Offer Free Return Shipping for Holidays

Providing free return shipping as a special offer during the holiday season can be a great way to increase sales. Limited-time offers of free return shipping could be just the incentive your customers need to make a purchase from your store. 

If you’re planning to offer free return shipping during the holidays, make sure to highlight that in your store’s return policy

When Not to Offer Free Return Shipping

It isn’t always worthwhile for your store to pay for return shipping. To mitigate costs, define clear conditions for when you offer free return shipping and when you don’t, based on the value of the item, the size of the item, or any other conditions.

Below a Certain Threshold

When determining which items to offer free return shipping for, consider the cost of the item to your store compared to the cost of return shipping. This can help you make the decision of whether free return shipping is worthwhile for items of that type.

Offering free return shipping on all orders, regardless of size, can be a costly expense that may not be worth it for low-value items.

To help keep costs down, set a limit on the value of items that qualify for free return shipping. 

Oversized or Heavy Items

Due to the high costs associated with shipping oversized or heavy items, offering free return shipping is often not worthwhile.

Oversized or heavy items require special packaging and handling, as well as additional labor and storage space, which can all drive up the costs of return shipping. It may be more cost-effective to offer a discount or credit to customers instead of absorbing the cost of return shipping for oversized or heavy items.

Boost Customer Satisfaction With Free Return Shipping

So should your eCommerce store offer free return shipping? That’s up to you to decide, after weighing up the pros and cons.

While there is an extra expense associated with covering return shipping costs, it can pay off in the long run since customers that feel secure and happy with their purchases are likely to come back and buy from your store again.

It’s important to consider all the factors carefully before making a decision for your store about who pays for return shipping. Fortunately, ReturnGO makes it simple to set up endless conditions for returns and return shipping, so that the return process is as convenient and stress-free as possible.

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