How to Incentivize Exchanges with Bonus Credit in Shopify
As an online merchant, it’s important to provide a smooth and hassle-free shopping experience for your customers. This includes providing an efficient and easy-to-use returns and exchanges process. However, when it comes to returns and exchanges, many merchants focus solely on the return process and overlook the benefits of incentivizing exchanges and the use of Bonus Credit.
An exchange is when a customer returns a product but instead of receiving a refund, they exchange it for a different product. There are several benefits to incentivizing exchanges over refunds, such as salvaging a sale and increasing margins and customer retention. In this blog, we’ll discuss how to instantly incentivize a customer with ReturnLogic’s Bonus Credit in Shopify to optimize refund rates.
Optimize Refund Rates with More Exchanges
Exchanges are better for merchants than refunds because they can help you retain customers and increase sales. When a customer exchanges a product, they are still purchasing from your store, rather than returning the item and potentially buying from a competitor.
Shipping fees can be a pain for you and your customers, but with an exchange, you can feel good about knowing you have increased margins from the return. Exchanges can also increase customer retention as it shows that you care about their needs and are willing to work with them to ensure their satisfaction.
Incentivize Customers to Exchange Instead of Refund
To encourage customers to exchange a product instead of a refund, it’s important to give exchanges priority over other options. Merchants should consider listing exchanges as the first option when the customer initiates a return.
Offering an extended window for exchanges can help incentivize your customers to opt for an exchange instead of a refund. Providing free shipping for exchanges can also be a powerful incentive. Adding store credit or Bonus Credit to exchanges can further incentivize customers to choose an exchange over a refund.
Streamline the Shopify Ecommerce Exchange Process
To make the exchange process as smooth and efficient as possible, scaling merchants should consider implementing return automation workflows. This can include using strategic rules in your returns portal to protect against exchange fraud, adhering to shipping policies, and simplifying accounting.
ReturnLogic’s suite of tools can guide customers to exchanges instead of refunds, visually de-emphasize the refund workflows, and encourage upsell opportunities with store Bonus Credits.
Offer Exchanges without Stripe Accounting Issues
There are many benefits of incentivizing exchanges over refunds in Shopify, but there is also an important detail that makes Bonus Credit different from our competitors. Unlike our competitors, ReturnLogic does not use Stripe for payment processing – all financial records are kept in Shopify.
Why is this important? Stripe can sometimes count an exchange as a new sale, which can lead to double accounting for sales, inaccurate inventory, and overstating the cost of goods sold.
Using Stripe to process exchanges can create serious problems for merchants as inaccurate sales numbers and inventory can lead them to believe they are doing much better financially than they truly are. Once a merchant realizes their books and inventory are off, it will cost time and money to get the problem fixed.
Leveraging tools like ReturnLogic’s Bonus Credit incentivizes exchanges without the risk of accounting issues that can occur with Stripe.
Reduce Return Fraud with Disposition Management
ReturnLogic’s Collector feature can also help combat fraud in the exchange process. This feature enables warehouse teams to physically inspect the return and mark its disposition based on its condition.
This is an important safeguard against fraudulent returns, which can be a significant problem in the retail industry. For example, shoppers can game the system with competitors by buying multiple products, requesting refunds on all of them, and then only returning some of them.
Without the ability to mark the disposition of the return, warehouse teams would have no way of knowing if this kind of fraud is taking place. It’s important that merchants have a way to protect themselves against return fraud with disposition management.
Retain Customers and Protect Profits with Bonus Credit
Incentivizing exchanges over refunds can be a smart move for online merchants by optimizing the exchange process and offering incentives, merchants can increase customer retention, reduce costs, and increase sales.
While incentivizing exchanges over refunds can be a powerful tool to retain revenue and convert refunds into exchanges, it’s important to implement it correctly to avoid inflated sales and inaccurate inventory.
By using Bonus Credit and Shopify’s financial records instead of Stripe, and by utilizing tools like ReturnLogic’s Collector feature, merchants can streamline the exchange process and safeguard against fraudulent returns. This will ultimately lead to a more accurate financial picture and better inventory management.
With the right tools and strategies in place, Shopify merchants can make the exchange process as smooth and efficient as possible, resulting in happy customers, increased customer lifetime value and a healthier bottom line.
Schedule a demo with a returns specialist today to find out more about our new Bonus Credit feature and how you can start incentivizing exchanges with your customers.