🫲 The refund effect

Happy Wednesday! Here’s what we’ve got for you this week:

• Boomers on BNPL

• How to use Shopify self-serve returns

• How to capitalize on the “refund effect”

• A return policy that encourages final sales

• David vs Goliath: Shopify taking on the Canadian Government

ACQUISITION

Shifting Consumer Behaviour: Massive Spike in BNPL Purchases By Boomers

Older generations are jumping on the Buy Now Pay Later bandwagon as a means of budgeting. Whilst BNPL heavy weight Afterpay has seen year on year growth since launching, they saw an impressive 12% increase amongst boomers, and 16% with GenX (see their impressive growth above).

Older generations are frequently using the services for purchases from department stores or food and beverage retailers. They’re also driving BNPL sales in areas like outdoor equipment, luggage, toys and electronics. Overall, Afterpay orders hit more than $5.5 billion in the first quarter of 2023, roughly triple the amount from the first quarter of 2020.

The increased adoption comes at a time when low- to middle-income shoppers are managing household budgets amid high inflation. This trend is predicted to keep growing.

CONVERSION

How To Capitalize on the “Refund Effect”

Refunds can make or break your Shopify store. According to the National Retail Federation, in 2022 U.S. consumers returned a whopping 16.5% of their purchases. That's a staggering $816 billion in lost revenue for retailers!

Now, there are some common strategies to tackle this issue. One approach is to provide customers with more information about products through things like reviews and FAQs. Another strategy involves making the return process more costly for consumers, such as adding shipping fees or limiting return windows. But here's the catch: these strategies can be expensive for retailers or inconvenient for customers.

Harvard Business Review recently reported an effective solution that benefits everyone involved. It's all about cross-selling during the product-return process. Let me explain.

Over the course of six experiments, they found that consumers treat refunds as money they've already lost. So, when given the opportunity to spend that refunded money on another purchase, it feels less painful to them.

So, what's the takeaway here? Well, by leveraging what they call "the refund effect," retailers can reduce their revenue loss from returns. Customers are more willing to spend refunded money on additional purchases, and that's a win-win situation for everyone involved.

The Iconic here in Australia do this really well. When you go online to ask for a refund you get three options: exchange, refund, or 110% store credit. And I gotta admit, I always take that juicy store credit.

How To Use Shopify Self-Serve Returns

Shopify finally has a native self-serve returns feature. Hallelujah!

To activate it, go to Settings → Customer accounts, then:

1. Enable the returns feature

2. Activate the new customer accounts

3. Configure the returns rules

Check out the video above for more detailed instructions.

South Moon Under launches online return policy that encourages final sales

Apparel retailer South Moon Under has made an update to its online return policy with the introduction of the KeepIt program. When shopping online, customers can now enjoy a 15% discount on full-priced items by using the code "KEEPIT" during checkout, though it’s important to note that using the code will make the entire purchase final.

This change offers shoppers a trade-off: a tempting discount in exchange for a non-returnable purchase.

This is an interesting strategy. We tested something similar in our fashion Shopify store. Whilst it definitely reduced the number of return requests, you will always have those persistent customers who will insist on a return. This opens you up to potential negative customer experiences (and reviews!) should you refuse. Something to think about!

Grab your popcorn: Yotpo vs Reviews.io

ICYMI, Yotpo recently sent an email campaign targeting Reviews.io clients, proclaiming their superiority. This wasn’t their first shot fired.

Watch the video to see what the Reviews.io CEO has to say about the matter.

Spicy. Which platform do you prefer? Hit reply and let me know!

EMAIL MARKETING

Maximising Email Impact: Finding the Right Balance Between Retention and Acquisition

Rather than funnelling all your efforts into just growing your list, it is crucial to dedicate equal (perhaps greater) efforts towards retaining existing customers. Research indicates that acquiring a new customer costs five times more than retaining an existing one.

Get ready for peak BFCM and Festive Shopping now with proven Email Retention Strategies

SHOPIFY NEWS

Enterprise retailers outside Shopify gain access to top-converting shop pay.

Shop Pay, the high-converting accelerated checkout with over 100 million users, will be available to enterprise retailers who are not on Shopify.

The availability of Shop Pay for non-Shopify retailers is facilitated through commerce components by Shopify (CCS), which grants access to the same components powering a significant portion of U.S. Ecommerce.

See the full announcement here.

Shopify CEO Vows to Fight Tax Authority's Request for 6 Years of Canadian Store Records

Inspo of the Week

There’s no other way to say this than Flakes is my new website crush. A midnight blue colour scheme that ties perfectly in with top-notch product photography is just the start. Where this site really shines is copywriting and persuasion… toeing the line perfectly between personality, science, and sales.

How we can help…

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Smart ecommerce brands rely on us for innovative design, development, optimisation, and growth strategies to create highly profitable Shopify websites. Work with our consultancy.

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