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eCommerce: Want to reduce returns? Give gifts

Customers love bundles. What nobody tells you is that a lot of times, at least one item from that bundle gets returned.

Don’t worry. There is a workaround, a way to frame your offer so that customers are less likely to return those items.

And it has to do with buyer psychology. Here’s what we mean…

Thomas McKinelay shares an example of two different promotions:

  • Buy a blazer and get a matching tie for $60.
  • Buy a $60 blazer and get a matching tie for free.

Use a free gift instead of a bundle promotion to reduce product returns.

Now imagine you see a similar, slightly cheaper blazer shortly after buying this one. Which of the two promotions would make you less likely to return the blazer?

According to research, the second offer makes returning much more difficult.

Because if you frame the second product as a part of a bundle package, people are much more likely to return an item vs. something they got as a gift.

The finding comes from an interesting experiment. People were given two options – buy a sweater for $49 and get a free scarf, or buy both for $49.90.

Those who chose the second option were 14% more likely to make a return.

Additionally, people said they were two times more likely to return an item in a bundle promotion (30%) compared to items that came with a free gift (15%).

Interesting… But why does this happen? Thomas says it’s because of how we perceive value.

  • Bundle promotion is utilitarian. We look through utilitarian lenses – how much money will we save.
  • Free gift is hedonistic. On top of being a good deal, the shopper sees it as valuable, of being a free item, which is exciting.

The bottom line: When customers buy a gift promotion, they feel like they’ve gotten more value from it than a bundle promotion, and they’re less likely to return it.

Definitely worth testing in your future campaigns.