Projected $37 Billion Worth Of Holiday Merchandise Will Be Returned. How Will You Handle This As A Company?

The holiday shopping season is coming to a close, which means that online businesses need to be prepared for a possible influx in returned orders. Industrial real estate experts CBRE estimates that e-commerce returns will total $37 billion this holiday season.

Product returns especially impact online businesses, since consumers aren’t able to see or feel the product until after it is purchased and sitting on their doorstep. In fact, the return rate for online purchases ranges from 15 to 30 percent, while in-store purchases are returned at a rate of roughly 8 percent.

This begs the question: are online retailers ready for return season this year?

Shipping software Shippo recently surveyed e-commerce SMBs and consumers to shed some light on how consumer expectations are changing and whether retailers are meeting, not meeting, or exceeding these expectations. The 2018 State of Shipping survey highlighted what consumers expect from online retailers when it comes to returns and what SMBs are actually offering.

Here are a few highlights from the report.

Free E-commerce Return Shipping Got a Boost

27 percent of retailers offer free return shipping for all purchases—up 10 percent from 2017. This number will need to continue to increase in order to match the 41 percent of consumers that say they will only shop at stores with free returns. Even scarier is that 30 percent of retailers will swap stores in order to receive free return shipping.


On the other side of the spectrum, retailers who make customers cover return shipping has dropped from 56 percent to 45 percent. While this number is trending in the right direction, only 28 percent of consumers say they will pay for return shipping.


Scan-based Return Labels Enable a Free Return Shipping Policy

Understandably, many online retailers are wondering how to offer free return shipping without spending a lot of time and money on shipping labels. One great option is to include a scan-based return label inside the outbound package. With scan-based return labels, the shipper is only charged if and when the label is scanned into the mailstream.

Given that free return shipping is a prevalent consumer expectation, online retailers should look for ways to offer it without breaking the bank. 

Top 5 Ways Merchants Can Use Shipping to Win Over New Customers

Shipping can strongly impact a consumer’s purchasing decision. In fact, 61 percent of online shoppers will abandon their cart due to high extra costs like shipping. In addition to the surprise price tag of shipping, consumers are on the lookout for other aspects of order fulfillment before they click “purchase”. For example, they also want to know how long it will take to get their product, which carrier you’ll use to deliver it, and how hard it will be to send the product back if it’s not to their liking.

By providing clear, detailed delivery information on your website, you can get ahead of these shipping-related questions and help give consumers the peace of mind they need to place an order.

Here are five ways you can use shipping to win the hearts of customers and keep them coming back.

Include Delivery Information on Product Pages

Amazon has influenced online shopping expectations, prompting an evolution towards transparency and a customer-focused checkout experience.

According to our 2016 State of Shipping survey, two other pieces of information items are key: the expected arrival date and exact shipping cost. However, only 33 percent of merchants include the expected delivery date and only 64 percent show the item’s shipping cost right on the product page.

Amazon doesn’t let the customer wonder about anything when they are looking at the product page. They don’t say “Two-Day Shipping” and let the customer guess when it actually arrives. Instead, they provide the expected delivery date and cost. Having all the appropriate information available on the product page has allowed them to be successful with the one-click shopping experience.

Find Ways to Offer Free Shipping

Never let the cost of shipping be an obstacle for your customers. According to research by UPS, 81 percent of shoppers cite free shipping as the most important thing they care about when going through the checkout process.

Consider providing customers with a free shipping option even if the delivery time is longer. 93 percent of those surveyed would take actions to qualify for free shipping, 58 percent of whom add items to their cart specifically to qualify for free shipping.

By offering free shipping with a minimum purchase value, your customers will typically add at least one more item to the cart in order to qualify.

One way to determine your customers’ spending threshold is by calculating your current average order value and setting the free shipping minimum slightly above it. Be careful not to set your threshold too high. If your average order value is $20 and you set your free shipping minimum at $200, you’re not offering enough savings to offset the increased spend.

Diversify Your Mix of Shipping Carriers

It’s hard to be profitable when your company is offering free shipping. If you’re only relying on one carrier right now, such as UPS or FedEx, consider adding a few additional carriers today, like USPS or DHL. Working with multiple carriers can help you optimize costs and provide more delivery options for customers.

By being prepared with multiple carriers, your team can better control costs and delivery expectations.

Consider Shipping Insurance for High-value Items

If you’re incentivizing consumers with a free shipping threshold, chances are the value of each order will be higher.

For these high-value orders, consider purchasing shipping insurance. A single loss or damage of a high-value shipment can set you back significantly. Not only have you lost the original shipment, but typically you would have to send the customer a replacement and pay for the cost of shipping again.

Each domestic FedEx and UPS parcel is covered automatically up to a value of $100 against loss or damage. The U.S. Postal Service provides an automatic $100 of coverage on expedited services like Priority Mail Express and Priority Mail Express International. If the value of your package is less than $100 you may not need to purchase additional insurance.

For shipments valued over $100, you can purchase additional insurance provided by the carriers or from a third-party insurer, which can usually be found through your shipping label platform of choice.

Be Clear About Returns

For online companies, e-commerce returns are simply part of doing business, and you can still minimize costs and operational impact.

A good place to start is to outline what your customers can expect, whether it’s an exchange, store credit, or a full refund. Every e-commerce store has its own preference, so don’t feel pressured to conform. Many people will be shopping with you for the first time, so be as clear as possible.

When it comes to the actual return procedure, include the specifics for your customers. Set expectations by making it clear who needs to ship what and by what date. Who pays for shipping—you or your customers? Should your customers use your packaging or their own?

If you sell internationally, you should create a separate policy for international customers. While not as customer friendly, you might consider limiting which items can be returned and who pays for shipping.

Remember that there are many reasons for returning products, ranging from the unavoidable to the entirely avoidable (e.g. human error on the company’s side, bad descriptions, poor product quality). Use this opportunity to understand why customers return items to help you lower your return rate.

Meeting customer expectations is an ever evolving task. It’s impossible to have everything perfected, but as long as you’re always looking for ways to improve the experience, you can make sure your customers are happy.

How Merchants Can Offer Amazon-Like Free Shipping

As an e-commerce business owner, you could do everything right—craft the perfect, personalized product, price it competitively, and provide customer-friendly support—but unless you offer free shipping, your customers will be hard-pressed to click “purchase”.

In survey after survey, consumers demand free shipping.

  • Nine out of 10 people said free shipping was the No. 1 incentive when asked what would make them shop online more often.

  • 68 percent of online shoppers expect free shipping even on purchases of less than $50, with 47 percent saying they typically back out if shipping isn’t free.

  • 31 percent of consumers will wait to make a purchase until there’s a free shipping offer.

It’s no wonder that Amazon’s early success hinged heavily on whether it could allay consumer fear of shipping costs—leading to the launch of Amazon Prime. Unfortunately a program like Amazon Prime won’t work for most businesses. Your customers typically aren’t purchasing enough from you exclusively to buy-in to a program like that. But, there are still unique ways to offer free shipping that allows you to meet customer expectations while also meeting your bottom line.

Here are a few unique ways to offer free shipping.

The Purchase Value Threshold

If you’re a newer business just beginning to experiment, a good place to start is a free shipping threshold. This means that if a customer spends a certain amount at your store, they’ll qualify for free shipping.

A good rule of thumb is to choose a threshold slightly above the average purchase value. For example, if customers typically buy a $20 T-shirt from you, price your free shipping threshold at $25 or $30 to encourage larger purchases. This helps you increase the size of your orders, while saving on shipping, since you’ll be able to package multiple items in one box or envelope.

The proof is in the purchases: 48 percent of people will add items to a cart to qualify for free shipping.

The Featured Product

You can also link a certain product to a free shipping offer. For example, if a customer adds a lipstick to their beauty purchase, they’ll qualify for free shipping.

This can help you get rid of old stock to clear out space for new products, or get a new product in front of more customers. You’ll likely want to choose a product that ships for a low cost or will fit easily in packaging with most other products. Small beauty items are a good example, in addition to T-shirts, nonperishable food items, etc.

The Rewards Program

You can use free shipping to incentivize repeat, loyal customers. Tell your customers that rewards members get special perks, including access to free shipping promo codes seasonally. Add these members to an email list to help you drive customers back to your site for secondary purchases. You can even consider including discounts or shipping promos for future purchases in the tracking page you send customers with tracking information for their upcoming delivery.

A rewards program will help you build a deeper, long-lasting relationship with customers that will allow you to increase ROI and cover the cost of shipping.

Free shipping can be incredibly daunting for e-commerce retailers to offer without breaking the bank. By experimenting with the type of free shipping promotion you offer, you can ensure you’ll be profitable as you meet one of the most important consumer demands.

What's Next for E-Commerce Beyond 2018?

One strategy in e-commerce to foster customer retention and escalate the overall profitability of your organization is a loyalty program—it enhances customer satisfaction and takes engagement to great heights. Loyalty programs are well-crafted marketing efforts that are designed to reward clients or customers who make regular purchases from a company. The market is flooded with a variety of e-commerce tools to facilitate loyalty programs, increase the lifetime value of customers, and improve conversion rates.

Let’s  take a detailed look at five successful technologies that are shaping e-commerce loyalty programs in 2018.

Artificial Intelligence

AI solutions, such as chatbots, revolutionize the entire customer experience, streamline interactions, and provide superior support. Artificial intelligence assists in the rapid and efficient capture of large volumes of customer data, which helps marketers design better promotional campaigns, schemes, and loyalty offers for their long-term clients. AI-powered software also automates manual or administrative tasks, leaving top marketing executives free to expend their energy on strategic loyalty programs, corporate goals, and objectives.


Beacons are a new technology in e-commerce that can benefit your online store and make your clients happy. Retailers with both a brick-and-mortar and online presence can use beacons to connect the shopper’s online and in-person experience. Customers use mobile devices fitted with beacons that provide cashiers or salespersons their purchase history, name, and habits so that they can be targeted for personalized promotions. It boosts the effectiveness of loyalty program by ensuring that customers are constantly receive fresh, appealing, and exciting schemes that are customized to promote lifetime retention.

Internet of Things (IoT)

The Internet of Things offers opportunities to enrich customer engagement and boost loyalty levels. This technology works by providing a number of touchpoints with the ability to collect real-time data from a wide range of channels. The customer data then serves as a central repository of essential information to aid in personalizing loyalty programs. The Internet of Things can help online marketers by providing them with current and up-to-date information, thereby leading to better decisions and customer appreciation that will surely augment positive returns.

Digital Wallets

The modern consumer is digitally savvy and increasingly relying on their personal mobile devices for quick and efficient payment transactions. The high rate of mobile technology adoption has led many e-commerce stores to start offering digital wallets through which they endow loyalty points or schemes. Smartphone-based digital wallets can also be used as a source of customer data as it easily reveals and records purchase transactions. E-commerce merchants have realized the power of mobile wallets and leveraged this technology to provide better billing security, along with superior service at minimal costs.


With Blockchain, clients have the power to utilize cryptocurrency instead of traditional loyalty points, thereby enhancing the value, agility, and flexibility of loyalty schemes. It is highly secure and leads to a reduction in financial fraud and errors. Blockchain-based loyalty programs lead to a reduction in development costs and boosts profitability by a huge margin.

Customer is king. In our world of cutthroat competition, it has become absolutely necessary for e-commerce stores to ensure that their clients remain invested in their business and keep returning for repeat purchases. Reward and loyalty programs are a great way to keep precious clients attracted to your product or service offering.

Don't Miss Out: Everything You Need to Know About Starting Your Own Subscription Box Company

Even if you’re not a subscriber yourself, chances are you’ve heard of services like Hello Fresh, JustFAB, Ipsy, Dollar Shave Club, BarkBox, and the Hot Sauce of the Month Club. They’re some of the best-known players in the booming subscription box industry.

Subscription boxes have been one of the biggest e-commerce shipping trends of the past decade, delighting consumers with carefully-curated, niche products that arrive in attractive packaging every month. This business model is built on product sampling and is extremely profitable for merchants who harness the driving forces of novelty and convenience. In fact, if there’s no subscription box model in your market, the best way to think outside the box might be to put your products inside one.

Great Reasons To Start Your Own Subscription Box Service

The subscription box market has grown by 100 percent annually for the past five years. These prepackaged goodies are especially popular among 25 to 44-year-olds who earn $50,000 to $100,000 a year—the sweet spot not just for startups but for all retail businesses.

Women, who tend to make purchasing decisions in the home, account for 60 percent of subscribers. However, men are more likely to have three or more active subscriptions. With this pedigree, it’s a pretty smart risk as new ventures go. Let’s take a look at how to get started building your own subscription box service.

Six Steps to Build a Subscription Box Business

This niche provides curated products in customized packages, so the first thing you need is a suite of products to bundle. Examples include fitness, food, and makeup boxes. Start with a great idea you are passionate about and work your way through the following steps.

1. What Products Will You Include in Your Box?

The road to a building a business is steep and may be longer than you originally imagined. Stick with products that fascinate you and make sure you have enough passion to market and sell to other people. Pick products based on the aesthetic of your target market and carefully consider production cost, shipping cost, weight, and size.

2. Which Price is Right?

This involves more than setting a price, signing up customers, and waiting for the money to roll in. If you price items too low, people won’t respect the brand, thinking it’s too cheap. However, if you go too high, customers will walk away. Start with what your competitors are charging and find out if your products are better or worse than what they’re offering. This should help you determine a starting price. As a rule of thumb, you should price your box so that you make a profit of 40 percent.

3. Marketing

A subscription box business depends on customers who want to continually acquire your products. Familiarize yourself with market metrics that will help you measure your success. For example, the Cost per Customer Acquisition (CPA) measure what it costs to secure a client. You want to keep this low, so you can become profitable as quickly as possible. The best way to advertise cheaply is to encourage current subscribers to recruit their friends via shares and likes on social media. If you really want to generate huge volume, your marketing needs to focus on getting your box to go viral.

4. Operational Challenges

Online businesses face unique challenges. Good inventory management and order fulfillment processes are make-or-break for subscription box businesses. In a bundled product, sourcing from different manufacturers can increase the shipping and logistics cost. This is an important point when setting your price and in creating your budget.

Returns are much higher for online products, some estimates say up to 50 percent higher than physical storefronts. Some of your customers won’t be happy with all the products in the box and may try to return one or two items. Make your return policy clear up front and stick to it to avoid added costs in this area.

5. Packaging Matters

Your packaging should wow customers and create a memorable unboxing experience. It’s worthwhile to invest in customized boxes and labels in a cohesive palette to reinforce your brand’s aesthetic. Washi tape, ribbons, and metallic accents give off a high-end vibe, even if your box is modestly priced. The surprise of getting a box should not turn into a let down when customers test the products, but if your packaging is thoughtful and attractive, customers are likely to be more receptive to whatever the box reveals. This is another area where it pays to check out the competition. What areas do they excel in as far as the packaging goes? What can you do better?

6. Personalize Every Step of the Customer Journey

People who subscribe to highly-targeted, niche services expect personalized attention and care. Part of the appeal is imagining that there is a stylist or concierge at the company thoughtfully picking items just for you. It’s important for subscription box businesses to build a relationship with their customers through personalized marketing and communication at every step of their journey with your brand. This will aid in acquisition and retention, which are critical in a market that has a lot of churn.

The Takeaway

Customers love subscription boxes because they’re effortless after the initial sign-up and it’s like getting a gift every month. Merchants appreciate being able to source new and obscure products and cater to a niche audience. And of course, the recurring revenue and predictable fulfillment schedule are nice as well.

The subscription box space has become more crowded and competitive in recent years, but the stunning year-over-year growth suggests that consumers are happily supporting businesses that seem to understand their wants and needs. If you want to get in on the trend, follow the steps above and think through each one carefully. You’ll be well on your way to a successful subscription box service.

Optimizing Reverse Logistics: How Easy Returns Can Mean More Sales

E-commerce has been booming, posting record year-over-year numbers. Experts are predicting that over the course of the next few years this industry may be bringing in over $2 trillion in sales annually.

Newer virtual stores that give consumers an exceptional shopping experience have contributed a lot to this boom, with successful retailers quickly adopting new technology and methods to attract more customers to their website.

The shopping experience and customer journey have become synonymous with sales: the easier it is to shop, the more sales e-tailers generate; as has been seen with Amazon’s one-click buy experiment.

Traditionally online retailers have associated sales with profit and returns with loss. But new studies find that a streamlined e-commerce returns process actually boosts profits.

What’s more, hassle-free returns are an opportunity to give better customer service, improve product descriptions, and to increase loyalty and sales in the long-term—not to mention giving retailers a 40 percent possibility of gaining second-chance sales from customers making a return.

How do easy returns increase sales and boost retention?

Here’s what you need to know:

They’re Inseparable

Returns and sales go hand-in-hand. Customers want to be assured that they can easily return something if their purchase isn’t what they expected.

E-commerce offers a more flexible and convenient shopping method for the modern consumer, but it isn’t without risk. Products can be damaged, be different than thought or described, the wrong product may have been sent out, or the item may not fit correctly.

In fact, the Wall Street Journal reported that approximately one in three products bought online is returned for these very reasons.

If you sell online, there’s a 40 percent chance that a customer may return the product. To provide an excellent experience for customers, the return process needs to be hassle-free.

Reducing Returns

E-tailers who are serious about returns have come up with methods to reduce them.

Those that offer apparel and clothing items have incorporated sizing apps and charts on their store’s pages to help buyers determine that they are purchasing the correct size before they hit that checkout button.

Taking it a step further, informative and detailed product descriptions are indispensable.

High-quality images with zoom buttons, 3D or video views, as well as multiple images all help customers decide if that product is really something they want.

Even with all of these elements in place, though, returns still top 30 percent for most retailers.

Consumers Read Your Return Policy

Most consumers want to know what your return policy says before they make a buying decision. UPS noted that about66 percent of customers are reading the policy before checking out. If returns are a hassle, the chance that they still go through with the purchase is a meager 20 percent.

On the flip side, when hassle-free returns are offered, the same study finds that a consumer is 80 percent likelier to close the sale.

Simply put: consumers want a seamless buying and after-buying experience, much like they can get at any local brick and mortar store.

If returns are hard, they’re unlikely to buy from you in the first place; and if they have already made a purchase that they need to return and it’s hard, don’t expect future purchases from that customer.

The Appeal of Online Shopping

The real draw of e-commerce is that the consumer doesn’t have to leave their house. Obviously, if they were to go to a brick and mortar store, they could try everything on, purchase it and take it home, and all within the same hour.

But they are willing to risk not trying it on and are willing to wait the time it takes for shipping. Why?

Because they love your prices and your unique selection. Plus, it’s more convenient and it takes less time.

But e-commerce is losing the battle with the returns process. When customers buy from a physical store, they can take it in any time with the receipt and will most likely get their money or a replacement item in return. It’s quick and easy.

When making a return policy for an online store, be sure to ask yourself: is your policy similar to local stores? Would it deter anyone from making a purchase? How does it compare to Amazon’s return policy?

E-commerce Returns Fast Facts

If the importance of an easy and convenient return policy isn’t sinking in, here are a few e-commerce return statistics from 2018 that can help:

Still Not Convinced?

As if that weren’t enough evidence already, a Science Daily studied 26,000 consumers over the course of six months. They concluded that easier return policies can increase profits by 25 percent or more in the long-term.

So, it’s not just about making customers happy now; it’s about boosting your sales and retention, too.

In the study, a model group along with five additional groups was offered different return policies and marketing strategies. The model group had easy, free returns. The other groups had a different (but not so convenient) return policy. After every period of three months, the marketing strategy changed, but the model group stuck with its super-easy return policy.

What they found was that when returns were free, convenient and easy, profits went up. The model group grossed almost $2 million in that six-month period. By comparison to the other five groups, who mustered up just around $1 million, there was a profit difference of 25 percent!

So, what does all of this mean for e-commerce stores?

Hassle-free returns do wonders for your bottom line. They’re no longer the pain point of yesteryear.

The jury is out: make returns easy and customers come back to buy again. Don’t, and you lose them for good. The choice is simple.

Beware of the Specific Delivery and Pickup Hours Before Christmas

This year, December 24 falls on a Monday, which means the final home stretch for Christmas pickups and deliveries is over the weekend. Even though there are still a few days left before the holidays start, you and your customers will want to get your orders in early since the carriers have adjusted weekend schedules.

Although the carriers’ weekend hours are limited, keep in mind all of the carriers spend months preparing for the holiday shipping season and are already planning to add more trucks and seasonal staff to accommodate the influx of packages leading up to the holidays.

Here are the weekend pickup and delivery schedules for USPS, FedEx, and UPS, so you can plan your strategy.

U.S. Postal Service Weekend Delivery Hours  

The USPS delivers all mail on Saturdays. You can also submit your Priority Mail Express packages into the mailstream until Saturday, December 22 for delivery in time for the holidays.

On Sundays, the U.S. Postal Service delivers some Priority Mail Express and Amazon packages in select regions. However, Priority Mail and First Class Mail will not be delivered on Sunday. And, no pickups are scheduled on Sundays.

UPS Weekend Delivery Hours

On Saturday, you can expect delivery for UPS Worldwide Express, Next Day Air, and 2nd Day Air packages processed and labeled for Saturday Delivery, which includes a $16 Saturday delivery fee.

For package pickups, keep in mind:

  • For 2nd Day Air, the last day to submit your package for it to arrive by Christmas is Thursday, December 20.

  • For Next Day Air, the last day to ship is Saturday, December 22 as long as you schedule a Saturday pickup.

If you’d like to schedule a Saturday pickup, the service is available for UPS Air and International customers. If you’re not a regular Saturday pickup customer, you’ll need to schedule an On-Call Pickup in advance. Pickup and delivery of UPS Ground for Saturday packages will be available in many metro area ZIP codes.

UPS does not deliver or pick up on Sundays.

FedEx Weekend Delivery Hours

FedEx Home Delivery will deliver on Saturday, December 22, at no additional charge. This will be the last delivery day for FedEx Home Delivery shipments.

FedEx First Overnight, FedEx Priority Overnight, and FedEx 2Day will deliver on Saturday, December 22 if Saturday delivery is selected. Keep in mind that a $16 Saturday delivery fee will be applied per package.

Finally, FedEx Ground will not deliver on Saturday, December 22.

The last day to ship for FedEx Overnight, FedEx’s fastest shipping option besides SameDay, is Friday, December 21, so we recommend planning to have all of your FedEx shipments in the mailstream before the weekend. You can always ship FedEx SameDay up until December 25.

FedEx does not deliver or pick up on Sundays.

So, What Should You Do?

The key here is to communicate.

Communicate with your carrier of choice. If you know you’re going to require Saturday delivery or pickup (if applicable) from your carrier, schedule it with them well in advance. Also, as you’re creating shipping labels, make sure you’re selecting Saturday Delivery for applicable UPS and FedEx packages to ensure on-time delivery.

Please reach out to your CSM if you have any questions!