According to a recent survey by Capital on Tap, nearly one in five (18%) orders placed with small businesses in the UK are returned. And with 86% of UK adults set to have brought Christmas gifts over the festive period, businesses can now expect an even higher volume of returns from the rush of the holiday season.
From squeezing resources to hurting the bottom line, returns are having a huge impact on the operations and profits of small businesses. To help limit the damage, experts at Capital on Tap have shared five essential tips for SMEs to streamline their processes and manage returns efficiently following the Christmas period.
To find out more about the true impact of customer returns on small businesses, please visit Capital On Tap.
1. Put in place clear return policies
Having a clear and concise return policy will help to prevent confusion and frustration for customers, and ensure you aren’t losing money on faulty or unsellable items. Over a quarter (26.5%) of small businesses owners surveyed said items being sent back faulty is one of the biggest challenges they face, so it’s really important to have a good policy in place to avoid this.
Make sure your policy is easy to find on your website and that it’s prominently displayed on your return labels. Your policy should also be easy to understand and should outline the exact steps that customers need to take to return items, as well as the quality and condition you expect returned items to be in when you receive them.
2. Offer extended return periods
Setting a time-limit for refunds is really important, so you don’t get hit by an unexpected return several months down the line. However, it could also help to make sure the return period isn’t too short, as this may encourage customers to hold onto unwanted gifts and items without feeling pressured to return them quickly.
The right timeframe will differ by company and product, but have a think about what will work for you. The standard timeframe is 30 days, but maybe 60 days will work better for your business over this period.
3. Be proactive about customer support
The holiday season is hectic, and customers may forget important details like return deadlines. Proactively reaching out to customers with reminder emails about the return period is a simple yet effective strategy.
Clearly communicate key information, such as the last date for returns and any specific instructions. You should also encourage customers to contact your support team if they have any questions or concerns.
4. Offer flexible refund or exchange options
After the holiday season, people might have changed their minds or received unwanted gifts. Offering flexible exchange options or company credit encourages customers to make additional purchases, potentially turning a return into another sale. This flexibility can positively impact customer loyalty and satisfaction during the festive period.
5. Use a business credit card to manage finances
There is a significant financial impact when it comes to customer returns, and 26.9% of small businesses across the UK say this has been an issue for them this year.
While it can be hard to manage the financial impact of returns, using a business credit card can help give you a bit more flexibility over your finances. They can be a useful tool for bridging any cash flow gaps as you process refunds, and they can also give you greater visibility over spending across your whole business.