Return Labels: Pros, Cons, Methods

Return labels are among one of the most confusing aspects of business for online retailers. They act as both goodwill value additions and tentative cost additions, making them a strategically tricky option. Including a pre-printed return label makes your customers feel that they are in control as upto 30% of the processed orders end up getting returned.

On the other hand, they are pitfalls for online stores, and using return labels can act as a damage control mechanism or even as an opportunity for additional sales. In this article, we will learn about shipping labels, their pros, cons, and ideal application cases. Dive in deeper to learn more.

Pros Of Implementing Return-Friendly Labeling

While there are a handful of players in each category that include prepaid labels for returning the merchandise, they can work like a charm if approached correctly. Here, we are listing down the benefits of adding these labels alongside your products and see if you can benefit from doing so:

Return Labels Support Convenience-Driven Decision Making

Cart abandonment is among the biggest turndowns for online businesses. Mentioning that the customer can return the merchandise quickly with pre-assigned return labels can help in reducing it. They improve the odds of making a purchase since your customers will find it convenient to make an order since they know it’s reversible. This improves their confidence. On the other hand, when a customer actually receives the wrong item, the return label automatically deescalates the situation since they have an option to send it back right away. 

Return Labels Support Convenience

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Return Labels Are Great Marketing Props

Return labels also double as marketing props. They offer a distinct value addition when your competitor isn’t offering the same. You can also include the prepaid return labels as a part of your marketing copy. Thus, you can take advantage of the uncertainty of returns by selling more products. You can also benefit from the fact that people will not spread negative word of mouth as their problems get solved without much effort. When the billing size is small, many returns aren’t likely, while it makes it easy to sell high-value merchandise. This adds a dimension of transparency as it sends a clear message: Even if things don’t go well, we got your back.

Return Label Props

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Positive Branding Due To Proactively Approaching Undesirable Situations

It is understandable that not every customer is going to be happy with their purchase. Things like buyer’s remorse and even a mood shift can trigger contempt. Hence, handling such instances with return labels improves your reputation among them and builds brand credibility. When other buyers look at how you are handling returns with so much convenience, they will feel more confident about ordering from you. This also means that you can free up your customer support department of the avoidable complaints. All in all, if used properly, return labels can create a very positive impact on your branding game.

Cons Of Including Return Labels In Your Operating Model

Naturally, including return labels comes with a lot of backlashes, both organizational and financial. Before you make the call, you should analyze how much money your online store leaves on the table in the form of returns. Also, you should consider such negative aspects concerning your products and overall business model. Have a look here: 

Increased Return Rate

As we discussed earlier, a prepaid return label will make it easy to return your products regardless of whether it’s faulty or not. Buyer’s remorse or finding out other alternatives can lead to returning. It becomes effortless to return since they don’t need to go through a lengthy process. No matter if they fall short of their monthly budget or the installation for their recent smartphone gets due, and your product is a soft target. Thus, if you choose to go with a return-friendly policy, you should be expecting an increase in the return rate without any fault of yours. 

30% Buyers deliberately shop more items only to return the unwanted merchandise.

Uncertainty Over Return Workflows

Giving your customers the liberty to give back any item translates to operational glitches. You don’t have any visibility regarding how much stock will return, of which type, price, and when. It also costs you to bring those items to your facility. Also, this is equally unexciting for your finance team. Uncertainty regarding the status of sold items and risks of proliferation make return labels unwanted. 

Soaring Costs Of Returned Products

The items are returned solely by the customers, which means that the seller has no insights into the inbound items that destabilize inventory management. Also, if they damage the packaging, which is quite apparent, this cost, too, adds up on your part. These goods also need an examination to see if they are damaged or not. In case these articles get lost, the losses only get amplified. Hence, it’s tough to predict how much damage it causes unless one applies the policies and collects data when it comes to the economic burden.

Ways To Reduce Returns

Now that we are familiar with the risks and financial backlashes posed by implementing return labels let us understand ways to reduce returns. In this section, we will discuss how you can lower the product returning rate in a simple, cost-effective, yet efficient manner. Depending on your products and their price range, you can use these tactics to improve your services and incur minimum losses on account of returned goods. Have a quick look here:

Educate Your Customers

In many cases, if your customer doesn’t understand how to use your product and they find the return label, they might simply return it. You can resolve such issues by providing educational content like quick guides or video manuals that your customers can find easily. You can also include links to tutorial videos with the help of QR codes. This is an extremely useful way to provide educational content because nobody appreciates surfing YouTube to go through FAQ video(s) to find a solution. Contrary to doing that, they may simply send the product back as its prepaid. You can also send such content in the email along with the order confirmation and bill.

Extend A Proper Return Policy

Giving your customers the liberty to take over the entire return transaction can still turn into a nightmare for them if they are unsure of the terms and conditions. You can help out the confused customers with a proper return policy. It should contain all the information on the scope of return, pick up destinations, applicable regions, and replacement terms—this aids in reducing the contingencies and containing negative reviews. Also, shippers offering such flexibilities also support multiple return options, which can add to the confusion. As a result, attaching a clear return policy is mandatory to smooth operations. 

Offering Quick Exchange, Alternatives, And Temporary Replacement

You can offer quick exchanges or alternatives based on your customer’s demand. You can also push for more premium alternatives if they are not happy with the overall quality. In many cases, customers cannot wait for the next item to get delivered a few days after the current is picked away, like in case of industrial supplies. You can provide them with temporary replacements at your local facility to calm them and ensure that they don’t make a purchase elsewhere. These methods of providing a temporary alternative can also become a valuable addition to your company. 

Methods Of Using Return Labels

This is a tricky area for online retailers since one can divert the returning products and the concerned process in many ways depending on the mutual ease. We will try to highlight three popular ways of doing so. However, you can also combine these methods and find out the most suitable alternative from their permutations and combinations. 

Labelling Right On The Packaging

This is the simplest among the three, as you just print and stick the label on the packaging before sending it to the shipping partners. This works fine in most cases, but if the shipper damages the box or the customer throws it away before checking the concerned item, problems arise. You can add the label inside the packing in an envelope to avoid such situations. In spite of the simplicity, we don’t recommend using it. This is because you don’t have any insights into the reason behind returning your articles. As a business, knowing the reasons behind such issues is necessary for making well-informed corrective actions.

Labeling Right On The Packaging

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Generating Labels On-Demand

You can also ask your customers to send out an email or communicate with your client, servicing executives for generating a label on demand. This may be in the form of activating the label after collecting necessary credentials, but it dilutes the purpose of including the tags. Employing your human resources after paying for these labels is neither a smart move for the business nor for your buyers. Having to communicate to a person over a call or email is the problem which they were looking to avoid in the first place. If you insist on routing the process, you can use simple software to auto-generate the activation code.

Keeping A Web-Based Portal In The Loop

A web-based portal can be a better alternative than using a simple API to check credentials and automatically generate labels. They allow you to quickly fetch the reason for returning the item and also getting suggestions. This window can also help you in upselling or cross-selling, which is a big advantage of this method. You can even know if the customer needs guidance on using the product and send tutorials to them immediately. This can help reduce the pitfalls in revenue while generating much-needed business intelligence. 

Selecting a suitable option among these three shouldn’t be a tough choice because you are well aware of your customer base and other factors. However, we find that integrating the returning goods data from your order management system with the inventory software always works better for businesses.

As far as handling the yet to be returned items, you can use either a pick-up or drop-off option depending on the location and carrier availability. Pick-up facility ropes in more support from the buyers while dropping-off the items to carrier location is more economical. However, if you are into omnichannel sales, you can also allow them to drop-off the item to the store. It will also improve the chances of selling more items in the store. 

Web-Based Portal

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You should include the returning items in the total shipping volume considerations for getting additional rebates/discounts from your carrier as applicable. Also, you can select slower deliveries for returning items since they are less expensive. On the other hand, if the location isn’t mapped in your shipping territory, drop-off points act as great strategic buffer zones for bulk shipping. 


We have tried to cover most of the areas concerning the use of return labels here. However, they can be overwhelming if proper systems and software solutions aren’t used. If you are planning to include return labels as value addition and vouch for your brand value, you should weigh the pros and cons of your product line up. Nonetheless, they are excellent for customer retention, nurturing brand loyalty, marketing tools, and driving repeat purchases. We hope that this article on return labels becomes useful to you for your online store operations.

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Neel Vithalani

Neel Vithalani

Neel is a creative who's always ready to lay his hands on anything that is innovative and captures masses. He is currently working with Orderhive. Apart from technology and business practices, he drools over psychology, history, and cinematography. You can find him on hiking trips, talking over anything from alien belief systems to 90's cartoon shows.

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