In this article I’m going to show you how to overcome buyer’s remorse and how to prevent serial returners. This will help you to have fewer customer returns to your e-commerce store. Let’s dive in, shall we?
How to Overcome Buyer’s Remorse Table of Contents:
- What is Buyer’s Remorse?
- Why Serial Returners a Problem
- How Brands Strike Back to Overcome Buyer’s Remorse
- The Cognitive Battle of The Avoidance System
- Why Customers Return Purchases
- Most Common Items Returns the Most
- Emotional Purchases vs Practical Purchases
- Impulse Purchases
- What You Can do to Prevent Buyer’s Remorse
What is Buyer’s Remorse? (and Why Serial Returners Are A Problem)
We all buy things. We all regret things. We all buy things we regret.
In fact, 82% of consumers feel regret or guilt about a purchase. This results in 30% of all online sales being returned.
This phenomenon is so widespread that psychologists, marketers and retailers refer to it as buyer’s remorse.
The repercussions of buyer’s remorse are devastating to e-commerce brands. This growing trend has given birth to the serial returner — a select group of consumers who purchase a high quantity of items that they have no intention of keeping.
This means that regardless of what you do to create or increase demand for what you’re selling, almost a third of those sales will be refunded. This will increase your costs to acquire new customers and lower your profit margins.
One explanation offered by retailers and economists for serial returners is that social pressures force Millennial customers to believe that they must wear new clothes in every photograph and selfie that they publish on social media.
Furthermore, a recent survey found that being a social media influencer is the most desired career path by Millenials. Therefore, it is of little surprise that serial returners are becoming more common.
Regardless of your opinion of capitalism; few can argue that a business can remain indifferent to such a murderous and dirty crime, as serial returns.
Once there is a war on a retailer’s profit margins there is only one thing to do. The war must be won. For defeat brings far worse things than any that can ever happen in war.
Therefore, it has never been as important as it now for e-commerce brands to know how to overcome buyer’s remorse and serial returners.
How Brands Strike Back to Overcome Buyer’s Remorse.
While there are a great many reasons for the existence of serial returners, brands like ASOS are actively investigating their customers’ social media feeds for evidence of abuse of their return policy. Suspects are then blacklisted from making future purchases.
On the surface, this may appear to be an extreme solution to overcoming buyer’s remorse. However, the costs attributed to serial returners cannot be understated.
Major retailers and fashion brands are struggling to break even and in an effort to lower costs further, they are now investing in AI and image recognition software. This will enable them to automate the process of investigating customers’ social media feeds.
While technology and blacklisting customers are one method of dealing with serial returns, it’s important to understand the psychology of why customers return items to online retailers.
This is important for understanding how to overcome buyer’s remorse. Armed with this knowledge, we’ll then examine how you can adapt your business to reduce the number of return purchases from your eCommerce store.
The Cognitive Battle of The Avoidance System.
When you’re considering a purchase, two opposing forces are waging a neural war inside of your head and one will die like a dog for no good reason.
The avoidance system is aptly named as it tells you to avoid risks and negative consequences; the other, the approach system, tells you to do whatever makes you happy at that moment.
It’s important to remember that most of the choices that we make are in the avoidance of pain. Even when we know that something is harmful to our body in the long term, we continue to do it in order to avoid short term pain.
Classic examples are smoking, alcohol abuse, or eating fatty foods.
If you were to strip the psychology of buyer’s remorse to its most basic form, then you’ll discover that it is a form of cognitive dissonance — a period of mental discomfort caused by conflicting beliefs and attitudes.
A rabid nest of thoughts and feelings hatch from deep within our subconscious. Growing and mutating until we often find ourselves not questioning what we don’t have, but rather what we can do with what we already have.
However, while this psychology may apply to the majority of consumers, it does very little to explain the fears and motivations of serial returners.
Why People Return an Online Purchase:
The most common reasons for customer returns are:
- 58% didn’t meet expectations
- 30% didn’t end up using
- 20% Cost
- 15% found a better deal
- 15% Didn’t need it
Some surveys have shown that as many as 7 out of 10 people who buy a new car, and 60% of all new homeowners, experience some form of buyer’s remorse. But small items — clothing, electronics, and kitchenware — just as easily haunt us.
This list is incredibly useful for understanding how to overcome buyer’s remorse.
Most Common Items for Buyer’s Remorse:
The most common products that customers return to an online store are:
- Clothing 60%
- House 44%
- Exercise equipment 42%
- Kitchen gadgets: 41%
- Cosmetics 40%
- Electronics 36%
- Vehicles 32%
- Grocery foods 30%
Emotional Purchases vs Practical Purchases.
Material purchases: Physical objects like computers, cars, and TVs
Material purchases are believed to produce a far higher percentage of customers feeling buyer’s remorse because they are “interchangeable” goods. In today’s market, almost any given product you buy has dozens, if not hundreds, of very similar alternatives.
This leads to the dreaded paradox of choice when an abundance of similar options causes psychological stress.
As the number of choices increases, the opportunity cost of discarded choices grows in tandem. When you finally choose one, the compounded effect of these missed opportunities causes buyer’s remorse — even if the item fulfils your needs.
The data highlights that the rate of buyer’s remorse is strongly linked to how often we use an item. Merely owning a nice new Apple laptop won’t make you happy; you have to engage with it consistently enough to justify the financial resources used to purchase it.
Experiential purchases: Experiences like concerts, vacations, and playing sports.
We are far less likely to regret an experiential product.
In fact, when it comes to knowing how to overcome buyer’s remorse, it is far more common for customers to regret missing out on an experience (FOMO, or “fear of missing out”) than to grumble about spending money on one.
This is partly because we interpret experiences as unique, not interchangeable. While a website might line up their products feature by feature, it is hard to make an equally objective comparison between, say, a tour of Scotland and a vacation in Japan. Thus, we don’t feel the same sense of lost opportunity cost.
But it also has to do with the way you remember an experience that has an effect on how to overcome buyer’s remorse:
“You don’t think about how long-lasting the effect of that concert was. You remember the high when you left.”Art Markman, UT Austin psychologist
Experiences create sustaining memories that outlive the event. Even bad experiences can in time evolve into memories that we come to laugh at.
Brands are well aware of this and have developed marketing strategies and copywriting techniques to cement an association of their product(s) being an experience.
A car isn’t a car; it’s the “Ultimate Driving Experience” and an expression of freedom; the Apple iPhone isn’t a cellphone, it’s a portal that connects you to the online world around you and enables you to capture unique and special moments; Coca-Cola isn’t a drink, it’s a nostalgic memory of Christmas and a great tasting way to feel sexy.
This kind of positioning is, among other things, designed to overcome buyer’s remorse.
Impulse Purchases are Emotional Purchases
While objects can certainly be experiential, have you ever had one glass of wine too many that led to an impulse purchase? You’re not alone.
It’s believed that over 80% of impulse purchases are emotional purchases that when given time, few consumers can justify owning.
With e-commerce stores offering easy and lengthy returns policies to boost their conversion rates, it has never been easier to return unwanted products.
What You Can do to Prevent Buyer’s Remorse
So, now that we know why customers return items to an online store, the question still remains: how to overcome buyer’s remorse?
- Yes you can check social media for serial returners, but it’s time-consuming – hire remote PAs or build AI image recognition using existing frameworks such as Tensor Flow
- Customers can earn money back or loyalty points for purchases
- Offer discounts, freebies and money back for referrals to your online store
- Provide multiple ways to pay including 0% interest over 5-years
- Clearly display discounts and the amount saved on your webpages and landing pages
- Annually, we each spend an average of $1,600 on subscriptions. Adapt your business model to incorporate subscriptions
- Market your brand as a gateway to an experience
- Make your products a habit – create a trigger, action, invesment, reward system
- When customers talk, listen completely. Most business owners never listen
- Do not offer free postage for returned packages
- Ensure that return labels must be printed off by the consumer
- When possible, use collection points for return packages
In conclusion, I feel that it’s important to stress that you must never force consumers to think that buyer’s remorse, no matter how necessary or justified, is not a crime.
This isn’t to say that a brand should make their customers feel “guilty” or “dirty” about making a return. Instead, the brand must lessen the psychological pain of owning their product.
This goes beyond a direct association between a company and the target demographic. It’s about shaping marketing campaigns to nurture the concept that their material goods are an experiential product.
The reason why is rather straightforward: all good brands are alike in that their marketing shapes a product into an experience that is truer than if they had really happened to the consumer. By customers using the product, the experience belongs to them; the good and the bad, the ecstasy and sorrow, the people and the places and how the weather was. If you can give that to people, then you have fewer returns and a stronger brand.
Thank you for reading How to Overcome Buyer’s Remorse. Don’t forget to share this article with someone who’ll love it and to leave a comment below.