3 AI-based strategies to Boost Loyalty Through Returns

Product returns are more than just a “cost of doing business”; they’re a major trigger for customer churn. 42% of customers reported they would stop purchasing from a brand if they had to return an item because of an issue attributed to the brand itself.

To enhance customer satisfaction and loyalty, eCommerce brands need to look at returns as a personalized service that adapts to each customer’s journey,

They need to let go of rigid return policies and look at returns as paid media that can transform customers into brand advocates.

In this article, we’ll look at three strategies brands can employ to transform returns into a loyalty building and retention tool.

How to Avoid Returns?

While returns can be seen as a valuable engagement strategy, the primary focus should be to prevent them and build stronger relationships with customers to improve profitability. We’ve listed a few different ways brands can do this:

Furnish Customers with Important Information

Brands should equip shoppers with detailed product information to help them make informed decisions and reduce the likelihood of returns.

For starters, they can provide high-quality, multi-angle images, and 360° product views along with informative videos, Q&As, and detailed reviews that highlight specific product benefits.

Additionally, implement filters catering to industry nuances (e.g., material, occasion for clothes, size, style, and color compatibility for furniture) to guide customers towards ideal choices.

Provide Personalized Experiences

Offering personalized guidance eliminates problems like misaligned expectations, lack of product knowledge, and enhances overall shopping experience. Here’s how brands can do it:

Utilize data AI to suggest products aligned with individual preferences and enhance purchase confidence.
Offer personalized fit recommendations and virtual try-on experiences for apparel, footwear, and other relevant products.
Allow customers to compare similar products side-by-side based on key features and specifications.

Be Transparent About Return Policies

Transparent policies streamline returns and open a two-way dialogue that enables customers to offer feedback without penalty.

Brands can then analyze this feedback to improve products, sizing charts and descriptions to ultimately reduce future returns and ensure a win-win for both sides.

AI chatbots further help with this. They offer instant answers to customer queries and even help process returns seamlessly.

3 AI-based Strategies to Turn Returns into Retention

With customer acquisition costs at an all-time high and the loyalty of consumers more fickle than ever, the approach to handling returns can significantly influence an eCommerce brand’s success.

Here are 3 ways AI can enhance this process and improve customer loyalty:

Create Personalized and Dynamic Return Policies

Static return policies fail to account for the unique needs and preferences of different customers and don’t offer opportunities to reward loyalty or incentivize future purchases.

Furthermore, inconvenient or restrictive return policies can create frustration and negatively impact the overall customer experience. This can lead to lost sales, negative reviews, and decreased brand loyalty.

So, brands need to offer personalized and flexible return policies to differentiate themselves from the competition, attract customers and retain them.

One effective strategy is to leverage AI-powered tools to analyze customers’ purchase history and online interactions, and offer extended return windows to those who demonstrate more loyalty.

Furthermore, brands can fine-tune return policies based on product categories. For example, a store can offer extended returns for shirts (considering try-on and fit concerns) compared to accessories like scarves.

Location-based adjustments for seasonal products, such as extended return windows for winter wear in colder regions and limited-time “no questions asked” return policy also enhance consumer experience.

But to proactively minimize future returns, brands should use AI to analyze return data and identify trends, and adjust policies accordingly. For instance, a high rate of returns within a particular size range could signal sizing issues requiring attention and improvement.

This data-driven approach ensures a more customer-centric and efficient return process, ultimately benefiting both brands and consumers.

Encourage Exchange over Returns

Encouraging exchanges instead of returns keeps customer spending within the brand’s ecosystem, and boosts loyalty and cash flow.

AI tools help achieve this, personalizing the exchange experience and incentivizing customers to choose exchanges over returns.

When a customer returns a product, AI can suggest similar styles, different colors, or even complementary items to increase the chance of finding a suitable replacement.

For example, if a customer returns shoes due to fit issues, AI could recommend styles with better size consistency or wider options.

Another way to incentivize returns is to offer loyalty points or rewards based on their loyalty tier. This personalizes the experience and makes exchanges more rewarding.

Imagine a customer named Sarah is returning a dress as a Silver tier member with 500 points. Here’s how AI can personalize the exchange experience:

Offer 2x points for exchange (total: 1000 points): This incentivizes Sarah to choose an exchange over a return.
Recommend similar dresses based on purchase history and preferences: Increases the chance of finding a suitable replacement and prevents further returns.
Show progress towards next tier (8000 points needed): Motivates Sarah to continue using the loyalty program and potentially reach the next tier.

Streamline the Return Process

Convenient return options like pre-paid labels, multiple return channels, and clear communication minimize stress and frustration associated with returns. This encourages customers to try new products or just shop confidently, knowing they can easily return items that don’t meet their expectations.

While conventional methods can handle basic returns, they lack the scalability, personalization, and predictive capabilities of AI, making them less efficient and unable to adapt to the dynamic needs of customers.

Here’s how AI helps streamline returns compared to conventional methods:

24/7 support: AI-powered chatbots and virtual assistants provide immediate support for initiating returns anytime, anywhere, eliminating waiting times and frustrations.
Personalized assistance: AI guides customers through the return process based on their specific needs and the reason for return, offering relevant solutions and reducing confusion.
Pre-filled forms and labels: AI automatically pre-fills return forms with relevant information, saving customers time and effort, and offering pre-paid labels for immediate action.
Real-time tracking and updates: AI provides accurate and real-time tracking of returned items, keeping customers informed throughout the process and reducing anxiety.

Enhance the Return Experience with Raleon

The key to transforming product returns into a strategic advantage lies in viewing them not as mere transactions but as opportunities to deepen customer engagement and loyalty.

Raleon’s AI-powered loyalty and rewards platform helps with this. Our platform is designed to enhance eCommerce brands’ engagement with their customers through personalized loyalty experiences.

Our loyalty co-pilot helps craft loyalty campaigns that offer personalized rewards and deepen the brand connection to encourage repeat business. This makes it more likely for customers to engage with the brand positively and avoid returns.

Additionally, with Raleon, brands can customize earning methods and rewards, and add unique triggers that align with brand and revenue goals. This flexibility allows for the creation of loyalty incentives specifically designed to discourage returns and promote exchanges.

To discover how Raleon enhances the loyalty experience and improves retention and revenue, check out the Shopify app or talk to our loyalty expert today.