Ah, January, the month of returns. You've probably just had your biggest sales quarter of the year. You're exhausted. You're trying to enjoy a little bit of downtime, and then the returns start flooding in. This doesn't fit. It's the wrong color. I change my mind. It was a gift and I don't like it. Every time you process a return, it feels like you are watching those Q4 profits just disappear.

It's frustrating, it's disheartening, and if you're not careful, it can put you in a bit of a negative head space, but also it can also drain your bank account. But here's what I want you to hear. Returns are not the enemy. In fact, when handled right returns can be one of your most powerful tools for building customer loyalty.

Now, I know that sounds counterintuitive, but stick with me today. I'm gonna show you how to turn January returns into February, March, April, may, June, July, August, September, October of November. Repeat buyers. 'cause of the customer who returns something and has a brilliant experience, they're much more likely to buy from you again than the customer who never comes back.

Welcome to the Bringing Business to Retail podcast where we talk all about solutions that make more money for your retail or e-commerce store. Let's start with reality. January is absolutely brutal for returns. Some industries can see return rates as high as 30 to 40% after Christmas. Now, fashion and online retailers generally get hit the hardest, but 30 to 40%.

I mean, that's more than a quarter. That can be sometimes nearly half of your products getting returned. Ah, do you see what I mean when I say that this can really have a negative effect on your bank balance? Now, there are a few reasons that people return. First of all, gifts. I mean, if people have received things that they don't want or they didn't fit or they already had it, this is not a reflection on your store or your products, it's just the reality of gift giving.

Number two, the impulsive buying during sales. Now, people are notorious for buying things during Black Friday and those Christmas sales that they don't really need, and now they're probably having buyer's remorse, three sizing issues now, especially online. Personally, if I'm new to a brand online because I'm not able to try things on, I'll often order multiple sizes and just return what doesn't work.

So returns are going to happen. That is just part of retail. But here's the thing that most people get wrong. They treat returns as a problem that needs to be solved as quickly and as cheaply as possible. Process a return, refund the money, or issue a store credit and move on. But in doing that, they're missing a massive opportunity.

I think is staring you right in the face because a return is actually a moment of truth. It's a moment when a customer is engaging with your brand, when they're interacting with your customer service, and whether they're, and they're deciding whether they should trust you enough to buy from you again.

Now, if you handle it badly, they're gone forever. But if you handle it well, you've probably just created a loyal customer. So let me share something with you that might surprise you. Studies show that 92% of customers will buy from a brand. Again, if the returns process is easy, 92%. I mean, that's virtually everybody.

I mean, the 8%, they're just the people who you are never gonna keep happy anyway, right? According to research from Nava, 67% of shoppers check the return policy before making a purchase. Now, remember how I said I buy multiple sizes when I'm new to a brand? In fact, sometimes if I'm not even new to a brand, if I'm just trying to work out if you know what the cut of that might fit me better.

If I got a size bigger and got it tailored, or maybe I'll go down a size, they look quite large or go down a size, you better believe that I have checked the returns policy before I make the purchase. So this means your returns policy isn't just about damage control. It's a competitive advantage. Think about it.

When you buy from brands like Amazon or Zappos, one of the reasons you do that is because you feel comfortable buying. You know that if something goes wrong, the return is easy, no questions asked. That ease creates trust, and trust is the thing that creates repeat purchases. So here's the mindset shift I want you to make.

A return is not a lost sale. It is the beginning of a relationship. When somebody returns something, they're giving you a second chance. They're saying, you know what? I'm not done with you yet, but instead, how can you make this right? How can you make this work for me? And if you do make it work for them, they'll come back.

And what we generally find is people spend more on the second time that they purchase than the first time. Now, I've seen this play out in my own stores. We had customers who would return things in January and if they had a great experience because we sold. Baby and kids things, quite often people would come in and buy things from our store as gifts.

Now, sometimes the person already had that item or you know what? They just didn't like it. And if they were new to our business, having that great experience generally meant that they would come back again and again and again. And what we tended to find was those people would buy more expensive items.

They weren't just the bargain hunters. 'cause they remembered how we treated them. And that my friends, is your opportunity. This is where you can separate yourselves from many of the big box retailers. So I want to give you my real life framework. You know, I'm all about stepping things out and making things easier, but when I did this one, I wanted to think about it as a retailer and a strategist, but also as a consumer, what do I look for when I'm shopping?

So are you ready for it? Get your pen and paper. Step one is to make the returns process ridiculously easy. And I know what you're thinking, but Sal, if I make it too easy, people will just abuse it. Yeah, they might. A tiny percentage of people will abuse it. Those people will going to abuse anything. The vast majority won't.

And the goodwill that you create with 97% of your customers is worth more than the 3% who might take advantage. So what does ridiculously easy look like? One, a clear returns policy, one that is easy to find. I want you to put it on your website, footer on your product pages, in your order confirmation emails on a card in the package.

I want you to put it on the shelves in your store. Here's the thing, I just recently purchased some bedding, beautiful quilt cover, and I bought it from a big, big box store. I was in a hurry. I was actually going to pick up a click and collect order. And on the way out I saw that this, this quick cover, we needed a new quick cover.

It was there. It was exactly what I was looking for. I picked it up. I went to checkout on the way out and paid for it and walked out. And when I got home, I realized I picked up a single bed rather than a queen size bed. It wasn't my fault. It had been put in the wrong spot, but in my haste, I didn't really check.

I just picked it up, paid for it. I probably should have realized at the checkout that it was cheaper than I would've expected, but I wasn't really thinking about it. I was just like, oh, this is a perfect opportunity. Pick that up. I can cross that off my mental, mental list of things I need to buy. Now, of course, when I got home and saw that it was a single bed, I was like, well, this is not gonna work for us.

I took it back and when I went to the returns counter, the girl said, we don't do returns on bedding. And I was like, but, but no one told me that when I bought it, it wasn't on the shelf. No one said it to me when I purchased it. And let's be honest. We all know there is no putting a quick cover back into a package once it's been opened.

Those things fitted sheets once they've been like, woo, woo, woo wrapped. There's no putting them back if you open them. So it was very, very clear that this product had not been opened, but I was actually more annoyed about, you know, I can understand there are certain things, you know, swimwear, underwear that they might not want to take back, but bedding in a package.

That clearly hadn't been opened. I was a little bit confused, but I was more annoyed about the fact that nobody told me. I mean, I'm not going to their website when I'm in store to look at what the returns process is for and what would assume to be an everyday refundable or returnable item. Again, if it had been something like swimwear or underwear, I kind of understand that, and maybe I would go to the effort of having a look.

But in this case, Aquil cover. It just didn't occur to me that that would be something that they wouldn't return. So the first thing I want you to do. To make your returns process ridiculously easy. It's just to let people know what it is. So no confusing language, just very clear, very simple instructions, and making sure that, especially in store, your team are telling people if stuff is not refundable, if it is final sale, let them know there's no returns on this item.

If it is betting and you don't refund betting, make sure they know that they can't bring it back. The other thing I want you to look at is, and, and I cringe as I say this, but it's free shipping now, if you can afford free shipping, and I know this is a big one, and this one comes from me as a consumer, not me as a retailer, because as a retailer and a business strategist, I'm like, that's a lot of money lost in shipping.

That's a lot of profit that we're putting down the drain. But as a consumer, trust me when I say. Free return shipping is probably going to be the thing that makes me buy, it's not mandatory. And just recently in the big Black Friday sales, I was really surprised at how many big brands no longer offer free shipping on returns.

Yes, you can take it back in store, but even those pure play retailers like asos, no free shipping and no free returns. So not only are you paying to get the item to you, but then you're having to pay to return. And for me, that was like. Hmm. You know what? I probably just won't bother. And so this is one of those situations where I'm not saying yes to free shipping, but if you can afford it, I would definitely think about it.

The third thing I want you to think about is having multiple return options. Now here in Australia, many retailers use a service called Parcel Point. So what that means is rather than having to go to the post office, and I don't care where in the world you are, post offices are a bit like tardis, you think you're just going a quick in and out to drop something off, but 45 minutes later you're stuck behind the lovely old lady who is trying to purchase 400 different types of stamps.

Am I right? Maybe I just have PTSD. From all those hours I've stood in post offices before I could do parcel collection for my stores. But these parcel points are alternative drop services, and that they're usually stores, convenience stores, or places where people are more likely to congregate. So for me, there's one at my local convenience store, which is one block away, whereas the post office is a good 10 or 15 minutes away.

So this means I can drop my parcel. The local convenience store when it's convenient to me because they are open much longer than the post office is, I can pick up some milk or bread in the process. And I also feel really good that that little convenience store owner, it's just a husband and wife, they're getting paid for this service.

And so I feel like I'm doing my little bit, but it's also win-win for me. So I've even seen some higher end brands, not just using this parcel point or alternative drop service, but using Uber. For returns, allowing you to book an Uber to get the product back to them. So thinking about returns, what we are looking at is how easy can we make it for people to get their stuff back?

And I know you're probably thinking right now, Sal, but I don't want it back, but it's gonna come back. There will be stuff that gets returned. And so what we're trying to do here is build the framework for how can we make that process frictionless to make sure that the person comes back and buys again and again.

So we've had make it ridiculous, easy look at free shipping or those alternative drop services. Next up. Use this as an opportunity to sell. Now, if we continue with this example of the iconic, the Australian fashion retailer, they actually offer you a 110% refund. If you take a store credit, so if you return something and you've purchased a hundred dollars worth, you will have $110 worth of store credit to use.

Now, that 10% for them is absolutely minuscule. When it comes to customer retention, what it means is that is money that stays in their bank account and the cost of money in your account. Is far more beneficial to you than having to look at refunding it, and so that 10% I can guarantee the data shows 'cause if it didn't, they wouldn't continue to do it.

That 10% literally makes them more cashflow positive because it means the money stays in their bank account, not going back out to the customer. I've talked in the past about making your returns channel a sales channel, and so by anticipating what the customer might want and operating it as an option during the returns process, this is another way of creating a sales channel from what you used to think of as a channel that drained money from you.

Now, I'm told I haven't heard purchase from this brand before, so I can't verify if they used to do this and you know they don't anymore or they still do this. But I was told when I brought up this idea of turning returns into a sales channel, one of the retailers that we work with was telling us about an outdoor activewear brand called Outdoor Voices in America, and they have a very unique returns process.

I have to admit, I was kind of thinking, Hey, do they listen to the podcast when she told me about this? You know, ego much. But when you initiate a return for their products, the system immediately suggests similar products or different sizes. And so what they're looking at is how do they keep the money in the business?

They make it so easy to exchange that most people don't even bother with a refund. They just swap it out for something else. Is this something that you can implement in your business? Now, what I love about this is the exchange process keeps the customer engaged with your brand. They're still interacting with you.

They're still opening your packages. They're still coming into your store. They're still getting the experience, and that is a continuation of the relationship rather than just an ending. I'm gonna share with you something now that I have only shared with my five ex clients. I feel like I'm kind of betraying them by telling you guys this, but hey, if we can help you make more money, that's what this podcast is all about.

I have a thing. It's called the post return email sequence. Hmm. Yeah, you probably haven't heard of it before. Something I keep in my back pocket. So a lot of businesses, well, I'm gonna say nearly every business completely drops the ball when a customer returns something. So they process the return or the refund, they issue the store credit, and that's it.

End of story. Bye. What if you turn that around because now you have the opportunity to turn that returned sale into a future sale. Now, it doesn't matter here if you gave them the money back or if it was store credit. Here is my post return email sequence, secret, secret, secret, little email sequence that I think you should implement.

So in the first email. Ask them what they're interested in. Just like you might in a welcome sequence, this is the perfect opportunity to maximize those cookies and preferences to ensure that your customers are likely to come back and either spend money with you or use up that credit note. So email one.

What do you like? If you don't already ask this question, I want you to ask this question. Once they've returned something, email to. What do you think it's gonna be? Of course, recommend some products. So based on those answers, send them an email about products that fit that criteria. Simple. Email three. I would think about some kind of incentive.

So you want them to come back and especially if this is store credit, you want that store credit off your balance sheet as quick as possible because store credit, gift vouchers, they are a liability. You have to carry those on your profit and loss, and we don't want that. We just want them to redeem it so that they're happy and they've got their stuff, and you can write it off your balance sheet.

So maybe you might offer them a small incentive instead of 10% off. Maybe you try that 110% credit. Maybe you switch it up a little bit. Maybe it is the free shipping. Maybe it is some, maybe it is just a discount to get them to come back. Maybe it's a gift with purchase. What we want is them to come back.

It's like an abandoned cart sequence. But for returns, I know it's kind of brilliant, right? So we just are going to frame this simple email sequence as, let's get them back in. Let's make this right. And I worked with an online fashion retailer who implemented this exact sequence, and their post return conversion rate went from right about 8% to 23%.

That is customers who returned something and then bought again within 60 days. So nearly 25%, nearly a quarter of those returned customers actually ended up coming back and buying. So we're from 8% to 23%. That's a lot of money, my friends in your pocket. But that is not luck. That is building out a strategy.

The next thing you know, it's always going to pop up when it comes to sell the data. What is the data? So. Okay. This is not directly about turning returns into repeat buyers, but it is crucial for the long game because every return is a piece of data. If you're paying attention, that data will help you make better decisions.

So here are the things that I would be tracking. What are the products that get returned the most often? You might find a particular item has a really high return rate. Which, in which case there's a problem. Maybe the sizing is off online. Maybe your photos don't represent the product accurately. Maybe the model isn't the regular model that you used to using.

There's something that's not working. Maybe the quality isn't what customers expect. So if you have a particular, particular vertical or a particular product, figure out why it's got a high return rate and fix it. So that's the first one. The second one is, why are people returning? If wrong size is your top reason, and on your POS, I mean, it's easy to track this online because you've got some kind of RMA, uh, software, or you just get people to tell you while they're returning it in store.

Not a lot of brands will actually ask you why you're returning. They'll just say, is there anything wrong with it? It's like, well, no, there's nothing wrong with it, but maybe it was the wrong size. Maybe it. Maybe they had skinny mirrors. I went into a store the other day, they had skinny mirrors. You know what I'm talking about?

If you ever watch Seinfeld, I got that dress home and I was like, I look like a balloon. So what we're trying to find here, especially in store, is why are people returning things? If it didn't match the photos, then we need to look at product photography. If wrong size keeps coming up, then we need to look at our product descriptions, or maybe we need to implement reviews that allow customers to say whether it runs small or runs big.

Worst case, we just update the product description. So this is the kind of data that we use online to update our product descriptions, but in store also to train our team. Especially in things like fashion where you want to know if something runs big or runs small during the peak season, you want to be able to say to people that runs small, grab the next size up.

Right? That is just going to enhance the customer experience because the best return. Is the one that doesn't happen in the first place, right? What we're doing now is mitigating the returns process, but actually if we don't get returns in the first place, all this is a moot point, which is what I want for you as much as possible.

So while we're working on reducing returns, don't lose sight of the fact that returns will be inevitable. There will be an amount of products that people want to bring back, whether you offer refunds or exchanges. People are gonna wanna buy stuff, wanna return stuff, and those are the ones we want to turn into opportunities.

Look, I know firsthand hand how frustrating returns are. They can feel like a slap in the face, especially if you are still working in your business. Now in January when you are trying to recover from all that December was if you're seeing return after return after return, it can feel like, oh, what are we doing wrong?

And these are the steps that we've worked through, but how are we going to not just what, what did we do wrong because we didn't do anything wrong? We just found an opportunity that we needed to adjust to be able to provide a better service to our customers. Returns are part of retail, they're not going to go away.

You've got two choices. You treat them as problem, or you treat them as an opportunity. And it's an opportunity to show your customers how much you value them, how easy it can be to come and shop with you and how much you, you know, how much you really want their business. And they will remember that.

They'll talk about it, they'll come back. So if we do that, we can turn those January returns into February. Repeat buyers and those repeat buyers. They're gonna be the foundation that grows your business so you have a new mantra. All righty. Every return is a chance to create a loyal customer ready. Every return is a chance to create a loyal customer.

I said that twice because it is so important. Every return, three times, three times a charm, every return is a chance to create a loyal customer, so don't waste it. Thank you guys so much for listening. I am with you here in the background as you power through this last few weeks of the year. I cannot wait to see everything that 2026 brings for you.

All righty. Thank you so much again. I'll see you on the next episode of the Bringing Business to Retail Podcast. So that's a wrap. I'd love to hear what insight you've gotten from this episode and how you're going to put it into action. If you're a social kind of person, follow me at the Selena Knight and make sure to leave a comment and let me know.

And if this episode made you think a little bit differently or gave you some inspiration. Or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice, because the more reviews the show gets, the more independent retail and e-commerce stores just like yours, that we can help to scale.

And when that happens, it's a win for you, a win for your community, and a win for your customers. I'll see you on the next episode.