Holiday Retail: Turning Returns Into Sales
By Allan Pulga
The Christmas season, or more specifically, the post-Christmas season is without a doubt the busiest time of year for returned items. In a busy store full of people trying to get what they want quickly, returns can pose a precarious challenge for you and your staff.
Handling a return well is vital because it represents a continued interaction with a previous customer – this customer has already bought from you! Because this customer was impressed enough by his/her sale experience, you’re already ahead of the game. Keep him/her happy and you’ll turn these daunting returns into exchanges and avoid refunds. It all comes down to customer service.
Shari Waters, retail columnist at About.com, offers the following four tips to help you convert returns into sales.
1. Listen and Learn: “Start the transaction by genuinely listening to the customer,” she says. “This allows the customer to be heard and it’s your chance to understand the shopper’s needs. Once the customer is finished speaking, begin asking any unanswered questions to establish the reason for the return.“Why is the item being returned? What is wrong with the item? What end result is the customer seeking? Once the reason for the return is known, we can offer solutions to the problem.”
One thing I know from my experience as a Christmas shopper is that frustrated salespeople run the risk of sounding accusatory when dealing with returns. This must be avoided. As soon as customers feel they’re on trial, they’ll ask for a refund and they’re out the door. No exchange. Lost sale.
2. Offer Suggestions: “Now that we understand why an item is being returned, we can suggest alternative products or solutions,” adds Waters. “Would the shopper like a different style, color, or size? Could a similar item serve the customer’s needs? Do we offer a better product than the one being returned? If so, make those suggestions.“Be sure to mention the benefits to the customer. This isn’t just a return; it’s an opportunity to sell.”
3. Cross-sell and Up-sell:“If no substitution will satisfy the customer, all is not lost. Depending on the store’s return policy, it may be possible to offer in-store credit or girt cards instead of a cash refund,” she says.
“If you must provide a cash refund or credit card chargeback, consider offering accessories or related items to the customer. Without being pushy, mention current specials, best sellers or other products the customer may need. Is there an additional item he/she could use?”
4. Satisfy the customer:“Not all returns can be exchanges. Many customers will only want their money back. That’s okay,” says Waters. “After you’ve exhausted the above selling opportunities and you’ve satisfied the customer, chances are good that he or she will return to shop with you another day.”
Why avoid refunds?“For many retailers, refunds and returns can account for up to 13 per cent of sales,” wrote the experts at IntelliQ, a U.K. loss-prevention software company, in a recent White Paper. “It’s a devastating figure and one of the most deflating features of retail.”
While it would be impossible to eliminate all refunds from your everyday operations, paying attention to your refund data can help you curb unnecessary profit loss from fraud or improper execution.