How to Efficiently Handle Post-Holiday Returns and Exchanges: Tips for Retailers
The holiday season is approaching quickly and while shoppers are busy brainstorming gift ideas and creating wish lists, as a retailer, you need to prepare for more than just sales: post-holiday returns and exchanges.
These are inevitable and simply a part of the retail cycle.
As a retailer, it’s important to prepare in advance for the amount of customers looking to return or exchange their gifts.
In fact, managing post-holiday returns and exchanges smoothly will enhance your customers’ experience and even strengthen your relationships with them.
To help out with that, we’ve rounded up a few tips & tricks on how to make the post-holiday returns and exchanges a great experience for you and your customers.
Additionally, we even guide you on how using Ikeono’s text messaging platform and Lightspeed POS can take some of the weight off your shoulders when it comes to managing this annual challenge—while keeping your bottom line intact.
#1 Embrace the Wave of Returns With a Clear Return Policy
Returns are a natural part of retail, and they’re especially common during & after the holidays.
In 2023, 14.5% of all purchases were returned, with online sales seeing even higher return rates at 17.6%. These statistics highlight just how crucial it is for retailers to plan ahead for the surge of returns.
Remember, customers aren’t thrilled to make returns either (let’s be honest: it’s time-consuming and no one likes waiting in line, whether it be in-store or at the post office), so instead of seeing them as a hassle, embrace them!
They’re a chance to engage with your customers, creating the perfect opportunity to turn a negative experience into a positive one.
That’s why a clear and transparent return policy is your best friend.
A well-defined policy that’s easy to find will reduce confusion and create a smoother experience for both you and your customers. Key words: well-defined and easy to find.
How Text Receipts Can Help with Return Management
Retailers who display their return policies clearly—on both physical and digital receipts—are already ahead of the game.
Use text receipts as a way to inform customers of return and exchange deadlines and damage policies upfront.
By doing this, you avoid any potential for misunderstandings, and it allows customers to feel confident shopping with you.
This is also where you would list out any fees associated with returns which is an increasingly common policy that both big-box and small-box retailers have started to implement.
And a bonus: since the policy now lives on their phones, it’s easy for customers to access it whenever they need it!
What to expect with the Lightspeed and Ikeono integration 👀:
#2 Introduce Restocking Fees: The New Normal
Many retailers, including H&M and Urban Outfitters, now charge restocking fees (or “processing fees”) to offset the cost of handling returns, especially for online orders.
With big-box stores creating this norm, customers will be more understanding when independent retailers follow suit—recognizing it as standard practice across the industry.
The idea behind these fees is simple: they help cover the costs of reprocessing items, especially when returns involve extra steps, such as repackaging or inspection. But how can you incorporate restocking fees into your return policy without frustrating your customers?
#1 Be Transparent
Always mention these fees upfront in your return policy. Avoid surprises by being clear about which items will incur a fee and why.
#2 Offer a grace period
Some stores choose to waive the fee if the return is made within a short window (i.e., 10-14 days). This gives customers an incentive to act quickly, reducing the overall burden.
#3 Differentiate between returns and exchanges
While restocking fees might make sense for returns, consider waiving them for exchanges. Encouraging customers to exchange an item instead of returning it helps to maintain revenue while providing an alternative solution that suits their needs.
Including restocking fees in your return policy can prevent headaches down the line when customers expect a full refund. With that being said, be strategic! There may be cases where it’s best to waive these fees altogether.
When to Waive Fees
Consider waiving your restocking fee under certain circumstances, such as for gift exchanges or defective items.
You can also leverage texting, customers can easily send photos of damaged products or describe issues, helping you determine whether a fee should be waived and define the best next steps.
The best part? These challenging conversations can happen via text, allowing emotions to stay neutral, the process to feel more professional, and away from the eyes of other customers in the store.
Some examples of when to waive fees include:
Gift exchanges: Since many post-holiday returns are due to gifting, consider waiving the fee for exchanges on items purchased as gifts.
Defective products: If an item arrives damaged or is faulty, waiving the fee is a must. This shows customers that you stand behind your products and prioritize their satisfaction.
High-value or first-time customers: For your regular customers or those who spend significantly, it’s worth waiving fees as a token of appreciation. It’s also worth offering this courtesy to new customers and take it as an educational opportunity.
#3 Optimize the Return/Exchange Process
Returns are a part of retail, but exchanges? They’re an opportunity.
Encouraging customers to exchange instead of return can lead to a great outcome: the customer gets a product that better suits their needs, while you still maintain the sale.
With the right tools, like Ikeono's integration with Lightspeed POS, you can streamline and enhance this process, making it easier for both your team and your customers.
Here are some ways to optimize the return/exchange process:
Be proactive: Make it part of your sales process to answer any questions customers may have via text message before they purchase. They can reach out to you either via webchat or straight to your business phone number for any lingering questions before they purchase.
💡PRO TIP: With Ikeono’s Lightspeed integration you can reference their past purchases in their purchase history and help them find the right product for them.
Make exchanges easy: Offer customers incentives to exchange rather than return, such as free shipping on exchange items. Providing a pre-printed return label in orders designed exclusively for exchanges can be the nudge customers need to choose an exchange.
#4 Build Trust with your Customers
A smooth return or exchange process can be a wonderful trust-building moment with your customers.
By paying close attention to every step in the customer journey, you show that you’re invested in helping them find the right product, not just make a sale.
Here are a few ways to build customer trust:
Multichannel Communication
Being available to answer their questions quickly whether they reach out via text, web chat, or social media. Ikeono’s centralized inbox feature allows you to manage all these channels in one place, ensuring that no inquiry goes unanswered.
Expert Advice
Customers appreciate speaking with someone knowledgeable, especially when dealing with large purchases or even product issues. Whether it’s a question about warranties or product care, offering expert guidance can build long-term loyalty.
The Bottom Line: Don’t Overcomplicate It!
When it comes to exchanges or returns, don’t overcomplicate it!
No one wants to jump through hoops to return or exchange an item. In fact, 84% of consumers say they won’t return to a business after a poor return experience.
By applying our tips and tricks for simplifying returns and exchanges, you’ve already done most of the heavy lifting! Now, when a customer reaches out, you can focus solely on delivering quick and thoughtful support.
With a simple, transparent return process, you reduce friction for your customers and increase the likelihood that they’ll return for future purchases. Having an expert on hand, whether through text or web chat, also ensures issues are resolved fast.
💡PRO TIP: Be Strict When Necessary
In some cases, it’s important to maintain strict return policies, particularly for custom or personalized products. Retailers that offer customized services, like jewelry stores that create bespoke pieces or bike shops that provide custom builds often implement no-return policies for these items.
However, you can still offer alternatives such as repairs, resizing, or product modifications to turn a potentially negative experience into a positive one.
Better Yet: Prevent Returns/Exchanges with Text-Based Communication
The best way to handle returns? Prevent them. Thankfully with Ikeono’s text-based communication, customers can be guided to make more intentional purchases which will lead to less returns in the long run. Through web chat and texting, customers can ask questions about products before they buy—whether it’s about size, fit, or product availability.
By providing proactive support, you can solve issues before they arise, improving customer satisfaction and reducing the burden of even having to think about handling returns later on.
Retailers have the opportunity to turn what might be a chaotic time into an opportunity to build stronger relationships with your customers. Using the right tools allows you to streamline your processes, making the returns experience quick, efficient, and—most importantly—painless for your customers.
Remember: the goal isn’t just to process returns, but to create lasting connections with your customers.
When you handle returns effectively, you’re not just solving an issue—you’re building trust, increasing your customer satisfaction, and fostering loyalty that extends beyond the holidays.