Are your order cancellation rates affecting your profitability?

Etailers lose substantial amounts of money if a customer cancels an order prior to dispatch. Cancellations after dispatch incur additional costs of delivery on top of the staff picking and packing costs, making them a significant drain on etailers’ profitability.

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Cancelled orders are bad news for customer satisfaction and risk poor reviews. Why did the customer cancel the order? Did they find it cheaper elsewhere? Were the delivery times quicker or cheaper at another seller’s business?

The costs for the etailer are many, from the cost of picking up the unwanted goods and sending them back to the warehouse to the negative customer feedback that may result and the administration and financial costs of processing a return, with no compensating sale generated to balance the books.

Tips to minimize cancelled orders:
Be transparent about your handling and delivery times. Don’t say next day delivery if the goods are out of stock and won’t be available for dispatch. Waiting for a delivery that doesn’t arrive downgrades the customer experience and increases the chances they will cancel. Avoid this scenario by giving accurate delivery estimates and notifying the customer if there are unforeseen deviations from these times.
Communication is essential. The customer wants to feel that their order is important to you. As we mentioned above if there’s a delay, email or call the customer. Email on dispatch and if possible let the customer track their delivery. Deal with customer queries by email or phone promptly and professionally. Poor communication loses orders.
Maintain consumer confidence in the product and the etailer. Trusting the product and the etailer enhances the customer experience. This principle is true even in the saturated ecommerce market where choices are infinite. Take note of customer reviews and post positive product and company reviews. where the customers refer to them pre and post purchase. Make sure you and your staff are knowledgeable about your products and can answer any queries the customer may have.

These commonsense steps will help you minimize 80% of orders cancelled by customers for reasons other than personal choice.

Image credit: Enokson

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