Selling North: Winning Canadians online with your return strategy

4 minute read

Millions of Canadians are savvy online shoppers who have had very positive experiences online. Their expectations have been shaped by their previous experiences with best-in-class national or global merchants.

When it comes to business growth in Canada, understanding how to meet shopper expectations can go a long way to boosting your bottom line.

One area that can’t be ignored is returns. The return process has the power to exceed your customers’ expectations and inspire them to make repeat purchases. This makes return policies a balancing act for ecommerce retailers – especially when managing cross-border shipments. You want to enjoy the benefits of offering convenient customer returns, but you also need to manage costs. You’re walking a tightrope between the two needs and want to avoid any missteps.

Convenient returns drive conversions, reduce abandoned carts, increase average order values and build customer loyalty – but they come with potential risks. Make your return process too convenient and costs might grow faster than you’d like. Make them too restrictive and you could pay the price in missed purchase opportunities. For 56 per cent of U.S. cross-border online shoppers, the ease of making a return is a critical factor in their decision to purchase.1

So, how do you strike a balance between the costs and benefits?

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How to reduce the cost of returns and keep customers happy

As a merchant, you can avoid absorbing the full cost of returns while keeping your customers content. It’s all about putting yourself in your customers’ shoes and thinking creatively.

Focus on clarity and convenience

Research shows that Canadians want clear, simple and convenient online shopping experiences. H&M, for example, has a simple and straightforward return process. They let customers know:

  • What can and can’t be returned
  • How to return items
  • How refunds are processed
  • How to get in touch with customer service for assistance

Other leading retailers in Canada use similar strategies to ensure customers are equipped with clear expectations for returns.

H&M presents its return policy in clear, easy to understand language to make shopping as easy as possible.

H&M presents its return policy in clear, easy-to-understand language to make shopping as smooth as possible.

63 per cent of Canadians would abandon their shopping cart if they had concerns regarding the return policy.2

It’s important to make your return policy easy to understand and easy to find on your website. It’s also becoming increasingly important to make it as customer friendly as possible. A complicated return policy could cost you your next sale.

Manage cost and expectations creatively

Savvy Canadian and U.S. businesses manage customer expectations to protect their margins and share the price tag of returned merchandise. They do this by:

Lowering costs with a restocking fee

Instead of absorbing the full cost of shipping, shoppers may be open to incurring a small deduction from their overall refund as a cost associated with handling a return.

Boosting retention with credits toward future purchases

Instead of a refund, shoppers receive an online or in-store credit, motivating them to return and shop.

Keeping it simple with a flat or discounted rate to ship returns

This tactic takes the sting out of the cost of return shipping. By offering a flat rate returns fee, the cost becomes less of an obstacle to purchase.

Managing customer expectations with adjustments

Some standard adjustment tactics businesses can use to deliver on customer expectations while lowering return costs include:

Communicating a clear return policy

Make your store’s return policy clear and accessible in order to manage customer expectations and reduce misunderstandings. This way, shoppers can make informed choices when placing their order, and if they choose to make a return, there will be no surprises.

Encouraging informed purchase decisions

In general, the fewer returns a business has to handle, the better. Provide plenty of product information, such as high-quality imagery, descriptions and measurements. This way customers can shop confidently and return merchandise less frequently.

A Kate Spade product web page presenting multiple high-quality views of a handbag.

A Kate Spade product web page presenting multiple high-quality views of a handbag.

Choose a shipping partner that makes returns simple

For a U.S. retailer with no physical presence, offering online shoppers more flexible return options can increase the likelihood of completed purchases. You’ll want a delivery partner who allows you to offer convenient return options – such as flexible drop points. 90 per cent of Canadians live within three miles of a Canada Post post office and have access to our 22,000 street letter boxes. This means that Canada Post can offer flexible drop points that make it easy for your customers to make a return.

For 56 per cent of U.S. cross-border online shoppers, inconvenient returns are deal breaking and lead to abandoned carts.3

How you handle your returns is important for your business. Whatever tactic you choose, make your return policy clear, easy to find on your website, and as customer friendly as possible.

Source:
1 2 3 Canada Post. 2021 Canadian Online Shopper Study, pg. 21-205, April 2021

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