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Can Your Shipping & Returns Policy Affect Conversion Rates? 4 Examples Show How

Can Your Shipping & Returns Policy Affect Conversion Rates? 4 Examples Show How

Yes, your shipping and returns policies can affect your conversion rates.

Shipping and returns policies can make or break the customer experience, and ultimately impact conversion rates. These policies serve as a roadmap for customers, giving them a clear understanding of what to expect when it comes to:

  • Delivery times
  • Shipping costs
  • Returns
  • Shipping options

From clear and detailed shipping information to flexible returns policies, each aspect of your post-purchase policy plays a crucial role in building trust and creating a positive shopping experience.

We'll delve into a few ideas for creating a winning shipping and returns policy and show real-life examples of each idea in practice. Get ready to streamline your policies and take your online store to the next level.

1 - Clear and Detailed Shipping Information

Providing clear and detailed information about delivery times, costs, and any restrictions or exclusions can help set expectations and prevent confusion or frustration during the ordering process.

Studies have shown that customers are more likely to complete a purchase when they have a clear understanding of the shipping process.

In one such study, Baymard found that 48% of shoppers abandon their online shopping carts due to unexpected shipping costs, and 22% because the delivery speed was too slow.

Long-term, companies that prioritize transparency and clarity in the presentation of their shipping and returns information win. And we can see this in the success of ecommerce giants like Amazon and Zappos.

Check out this example from Skwala. While it doesn’t go into as much detail as the major ecommerce companies do, all that matters is that it addresses the concerns of any cautious buyer, such as:

  • Order tracking
  • Supported shipping locations
  • Return shipping details
  • Shipping options offered

As shown below, Skwala answers relevant shipping questions via its FAQs page.

Skwala’s shipping FAQs

It also provides shipping information on all checkout pages as seen below.

shipping information on Skwala’s checkout page

Bottom line, it is vital to provide clear and detailed shipping information on your ecommerce store, whether via:

  • FAQs (as Skwala has done)
  • A dedicated shipping page
  • A shipping calculator
  • Delivery time estimates on product pages

By doing so, online stores can ensure that shoppers have a clear understanding of the shipping process and feel confident in their purchasing decisions.

2 - Flexible Returns Policy

Having a flexible returns policy can give shoppers peace of mind when making a purchase, just like having insurance.

In a study carried out by UPS and Forrester, it was discovered that:

  • 81% of customers agreed with the statement “If an online retailer makes it easier for me to return a product, I am more likely to buy from that retailer.”
  • 81% agreed with the statement “I am more loyal to retailers that have generous return policies (e.g. free return shipping, ability to return any time for any reason).”
  • 73% agreed with the statement “I am less likely to buy in the future from an online retailer where the returns process is a hassle.”

And it makes sense when you think about it. When you buy insurance, you have peace of mind knowing that if anything goes wrong, you're covered. It's the same with a flexible returns policy; it acts as a safety net for buyers.

They know that if they're not happy with the purchase, they can return it easily for a refund or exchange, giving them the confidence to buy in the first place and reducing the risk of buyer's remorse.

Moreover, this sense of security can be especially important for first-time customers who may be hesitant to buy from a new online store.

What to Include in a Returns Policy

So what should your returns policy contain? Ideally, it should have the following elements:

  1. Time frame for returns: Specify the time frame within which customers can initiate a return, such as 14, 30, or 60 days from the date of purchase.
  2. Conditions for returns: Clearly state the conditions under which returns are accepted. For instance, the item must be in its original condition, unused, and in its original packaging.
  3. Process for initiating a return: Explain the steps they need to follow to initiate a return. For example, they must first contact customer service and obtain a return authorization number before shipping the item back.
  4. Refunds and exchanges: Describe the options available for people to get their money back. Would you offer refunds, exchanges, or store credits? What is the process for obtaining a refund or exchange?
  5. Shipping costs: Clearly state who is responsible for the shipping costs associated with the return (that is, is the buyer or seller responsible for the shipping costs?)
  6. Exclusions: Specify any items that are not eligible for return, such as final sale items, customized products, or perishable items.
  7. Contact information: Provide clear contact information for customer service, including a phone number, email address, or chat function, to make it easy for people to initiate a return.

Duckworth, a Tadpull client, is an example of an ecommerce brand with an excellent returns policy. It’s short and sweet, yet crystal clear.

Notice how, in such few words, you get a half dozen pieces of information, including the:

  • Time frame for returns
  • Conditions for returns
  • Products excluded from returns
  • Process for initiating a return (with a link to the return portal)
  • Notes about refunds versus exchanges
  • Shipping costs
Duckworth’s returns policy

Having a clear, concise, and easily accessible returns policy is crucial for building trust and encouraging people to shop with confidence.

By providing this information upfront, ecommerce stores can help manage expectations and reduce confusion, leading to a better overall customer experience.

A well-crafted shipping and returns policy can have a significant impact on the success of an online store.

3 - Free or Discounted Shipping

Offering free or discounted shipping can be a powerful motivator for customers when making a purchase.

Shipping costs are often a major factor in the purchasing decision, and many people will abandon their shopping carts if shipping costs are too high.

By offering free or discounted shipping, online stores can remove this barrier and encourage shoppers to complete their purchase.

Here are some ways offering free or discounted shipping can incentivize customers and increase conversion rates:

  • Encourages Impulse Purchases: Free or discounted shipping can encourage customers to make impulsive purchases, especially for smaller, lower-cost items that they might otherwise not have purchased due to high shipping costs.
  • Increases Average Order Value: By offering free or discounted shipping, ecommerce stores can incentivize shoppers to purchase more items, thereby increasing the average order value and boosting overall sales.
  • Improves Customer Satisfaction: Offering free or discounted shipping can improve customer satisfaction and increase the likelihood of repeat business, as people appreciate the convenience and savings.

All that said, it's important to mention any limitations or exclusions that apply to your shipping policy, whether free or discounted. These might include:

  • Minimum order amounts
  • Exclusions for certain products
  • Restrictions for certain regions

For example, an ecommerce brand may offer free shipping on orders over $50 or only within the Continental US. Such information should be clearly stated in the shipping policy to avoid confusion or disappointment for customers.

Consider Mack’s Prairie Wings, an online store that sells waterfowl hunting gear.

Right on its home page, there’s a banner clearly advertising its free shipping policy for orders over $99. This can incentivize shoppers to buy more products just to take advantage of the offer, leading to a higher average order value (AOV).

Mack’s Prairie Wings’ home page showing its free shipping offer

In summary, offering free or discounted shipping can increase conversion rates by removing a major barrier to purchase (shipping fees), improving customer satisfaction, and boosting AOV.

And by clearly communicating any limitations or exclusions, ecommerce stores can effectively use this tool to drive sales and grow their business.

4 - Expedited Shipping Options

Offering expedited shipping options—such as next-day or same-day delivery—can provide significant benefits for ecommerce stores by meeting the needs of customers who prefer to receive their orders quickly.

By offering options for fast shipping, you can reap the following benefits (and these are just a few of them):

  1. Increased customer satisfaction: Offering a range of delivery options, including expedited shipping, will allow you to cater to the needs of a wider range of customers, increasing satisfaction and loyalty.
  2. Improved conversion rates: Fast shipping can incentivize shoppers to make a purchase, particularly those who need their orders urgently, thereby increasing conversion rates.
  3. Competitive advantage: By offering fast or free shipping, ecommerce stores can differentiate themselves from competitors and appeal to a wider range of customers.

Expedited shipping options can be presented to customers through a shipping calculator or checkout process, where the customer can select the preferred delivery option and any associated fees.

These options can be shown as premium or additional services, with higher fees reflecting the increased cost of these quicker delivery times.

It's important to be transparent about any additional fees associated with fast shipping, as customers are more likely to choose this option if they understand the full cost involved.

An example of an ecommerce brand that adopts this idea is Toad&Co.

The clarity of the information on its shipping page is exemplary, and it outlines what customers can expect to pay for ground, 2-day, and next-day shipping for orders at various price levels.

Toad&Co’s expedited shipping options

How Different Ecommerce Shipping Policies Affect Conversion Rates

Let’s now compare the effect of various shipping policies on conversion rates and gauge the flexibility and customer satisfaction afforded by each shipping policy.

Note that, within the context of this discourse, we define flexibility as an assessment of the amount of wiggle room offered by each shipping and returns policy to accommodate any changes to an order.

Such changes might include the ability to change an order after it has been placed, the ability to track an order, and the availability of alternative delivery options.

The table below compares the effect of various shipping policies on conversion rates and attempts to rate the flexibility and customer satisfaction that each option provides with a three-tiered rating system (High, Moderate, and Low).

Read the next article: 4 Discount Popup Examples & How They Drive Sales

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