The e-commerce industry keeps on growing and with it, the demands of its customers. This is by no means all bad news for the whole sector, as it provides a huge opportunity for those companies looking for ways to stand out among the competition. 

According to Amazon, there are exactly 72 reasons to return an item bought online! The average online purchase return rate for e-commerce has recently grown to around 18% (the percentage changes depending on the product category). That means that out of five items purchased online, one ends up being sent back to the merchant. Return policies and refunds are also becoming more and more a competitive advantage for merchants as shoppers are by their own admission more likely to buy from and stay loyal to online shops offering simple (and possibly free) returns and flexible policies. 

Consumer behaviour is truly shifting towards a higher demand for online returns, and merchants need to react and accommodate the new trends and expectations. In a saturated and greatly competitive market like e-commerce, creating loyalty comes down to offering unbeatable customer experiences. 

Returns should be easy! 

30-day return policies have become an industry standard. Customers expect free, no-hassle returns and exchanges. On top of that, they want to receive their refunds quickly, if not instantly.  

Here is a random sample of an e-commerce return policy found online: 

If you are looking to return or exchange your order for whatever reason, we’re here to help! We offer free returns or exchanges within 30 days of receiving your order. The shipping fee is free and will be paid for by us. As we are a small business and therefore cannot issue a free return label, we ask all customers to pay for their returns and the cost of is refunded back with the original returns. We simply need proof of receipt.

It seems obvious that this merchant (even if small) is doing everything in its power to assure the satisfaction of its customers. From the 30-day window to the no-fees policy to welcome returns, it seems to recognise returns and exchanges are a strong selling point as well as an incentive to spend more and with more confidence on its portal. 

Slow refunds are no longer excused.

You can return your product for store credit, a different product, or a full refund to the original payment method.

When it comes to full monetary refunds (like in the example above), they usually can be processed only to the original payment method. As for how long the process usually takes, the policy above promises up to three working days from the day the merchant receives the returned goods or at least a full week if the original payment was made through Paypal.  

Amazon published its own extensive list of different waiting times (for different payment methods) customers must wait after a refund is issued: 

Refund method

Credit card
Debit card
Checking account
Promotional certificate
Shop with reward points
Pay in cash (at a participating location)
Pre-paid credit card

Refund time

3 to 5 business days
Up to 10 business days
Up to 10 business days
No refund issued
Up to 5 business days
Up to 10 business days
Up to 30 days (depending on the issuer of the card)

What do online shoppers want? Instant refunds.

Waiting for several days to receive a payment that is rightfully owed is anachronistic. Consumers move in a world overflowing with instant experiences, and they expect to find them everywhere. They are also more determined than ever to skim through returns policies looking for reasons to shop (or not to). Should they not find what they seek, they can easily go look elsewhere. 

At Finshark, we agree that refunds should happen in seconds. That is why we built Instant payouts, a product that does exactly what it says on the tin. It is powered by one simple idea: getting a refund for something should be as easy as it was paying for it in the first place. We created it for those merchants willing to provide breezy experiences – worth returning to. 

With Instant payouts customers can buy from an online store with confidence, knowing that if they change their mind (clothes don’t always fit!) they can request a return as easily and get back their funds immediately – straight into their bank account, ready to be spent on the next purchase.  

That kind of freedom directly translates into customer loyalty. Guaranteed! 

What do online merchants want? Happy customers. And fewer fees.

Beside keeping their loyal, recurring customers satisfied, merchants can issue payouts at a much lower cost than traditional refunds towards credit or debit cards. Our Instant payouts solution powers bank-to-bank payments which do not need any additional intermediaries to work – such as the more expensive card schemes and payment gateways also slowing the process (if you are interested to read more about how tricky online payments can be, read this). 

No middlemen means that merchants can call the shots by completely owning their refund processes from start to finish, without the traditional fees or unnecessary delays.

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Nicola Spera | CBO

A jack of all trades with a passion for usability, fresh pasta and breezy payment flows.

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