D2C returns processing: 3 essential components

D2C returns processing: 3 essential components
Jonas van de Poel
Jonas van de Poel
Content Writer
Posted on
February 28, 2022
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The returns process keeps every online store busy. To make it even more difficult, there are different challenges per industry and business model to take into account.

If, as a manufacturer, you choose to sell directly to the end user (D2C) rather than to a reseller, you will also have to take control of the returns process and process your own returns. 

If you want to prevent your returns process from becoming a high cost item, we recommend you ask yourself a few important questions: 

  • What is an acceptable return rate
  • Which carriers will you work with? 
  • How can you keep your return costs as low as possible?

In the article below, we take you through the answers to these questions and tell you about the 3 essential components of processing D2C returns.

1. What is an acceptable return rate?

Practically every webshop has to deal with returns. The higher your return percentage, the more products you have to take back after delivery. Logically, you want this percentage to be as low as possible. 

To answer this question properly, we can look at average return rates per branch. For example, within (women's) clothing, the average percentage is 40%, which is much higher than for electronics (16%) and furniture (10%).

You can therefore say that a return rate under 40% should be the minimum goal for a (women's) clothing shop. For electronics and furniture, this percentage is a lot lower. 

In order to obtain a pure return rate, you will also have to include any exchanges and issued value vouchers in your calculations.

2. Which carriers will you work with?

The consumers you serve as a D2C e-commerce company cannot all be lumped together. Their wishes regarding receiving and returning products can vary quite widely.

For example, one customer may find it more important to have packages collected from their home while another may be concerned about the ecological footprint of the transport. The distance to a delivery point for returns can also have an impact on the purchasing process.

Reason enough to always use a multi-carrier strategy so your customers can choose which party they prefer to deal with regarding their returns. Here are some of the most popular carriers:

  • UPS. One of the world's largest parcel carriers. With UPS you can return your goods printerless using a barcode on your phone.
  • DHL. In the Netherlands alone, DHL offers 3500 parcel points. With DHL you can also offer printerless pick-up at home. 
  • DPD. This is the second largest player in the European parcel delivery market. 
  • Carrier. This carrier is perfect for transporting large products and makes very efficient use of their unique smart network. 
  • Homerr. A sustainable and social solution for receiving and returning parcels.

3. How can you keep your D2C return costs as low as possible?

High return rates can be a big cost for your D2C online store. There are a number of ways you can make sure that you lower your return rate and thus your costs:

  1. Clear and thorough product descriptions. This way, your customers know exactly what they can expect from their order and are not faced with any surprises.
  2. High resolution product pictures and videos. With high resolution pictures, you leave nothing to the imagination of your customers.
  3. Encourage customer reviews. Reading customer reviews removes uncertainty from your customers in advance and gives them a clear idea of what they can expect.  
  4. Excellent customer service experience. Some problems can be handled with good customer service to avoid them translating into returns.
  5. Data-driven optimisations. Analyse your return data and use the insights to improve your offering.
  6. Optimize customer experience for mobile devices. Mobile-first e-commerce has grown strongly in recent years. Adapt your D2C online store to this as well in order to reduce the risk of mis-selling.
  7. Encourage exchanges. Instead of seeing returns as a cost item, you can also turn them into a growth factor. Is the size too big? Offer a size smaller during the return request.

Especially the last tip we strongly recommend to every D2C e-commerce company. By offering exchanges based on live stock, you can convert up to 40% of your returns into exchanges.

It is also possible to let customers continue shopping during the returns process with a coupon worth the purchase amount. This way, your customers can still spend this amount in your online store and you will retain more turnover. 

Do you also want to know how to process D2C returns better? 

With Returnista's global returns solution you can optimize and automate the entire returns process. This ensures a drastic reduction in the number of returns, allowing you to generate more turnover.

Want to know more? Request a demo on our website.

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