The Pros and Cons of Prepaid Return Shipping Labels for Online Merchants

Returns are much more common in online retail than in traditional brick-and-mortar stores, and most customers are more likely to buy again from a store with a good return policy even if they end up returning the first purchase. Providing your customers with free return labels may be beneficial for your store, but it has its drawbacks as well.

Return labels are prepaid and pre-addressed shipping labels that customers can use for free product returns. Merchants can either print them out and include them with orders, or email them to customers in the PDF format so that customers can print them at home. Some merchants use scan-based shipping labels instead of prepaid ones; unlike prepaid labels, scan-based labels are only charged upon use.

Many online shops benefit from including return shipping labels with orders, but this is not always the case. We suggest that you weigh all pros and cons before deciding whether you should include return labels with every order instead of emailing them to customers upon their request or handling returns some other way.

Pro. Return labels make it easier for retailers. Providing your customers with prepaid shipping labels gives you more control over the return process: you can make sure that the return address is correct and that the right amount of postage is paid, so the package is less likely to get lost in transit. In addition, prepaid return labels give you the freedom to choose the postal service with the best rates and reduce your expenses, as well as take the load off your customer support team.

Con. Return labels might result in additional expenses. You can void prepaid shipping labels that haven’t been used by customers and request a refund within a specific time fame. However, getting your refund may take some time. In addition, you may be charged a cancellation fee. There is no such problem with scan-based return labels, but such labels usually have higher shipping rates and may be subject to additional surcharges, which means that you are charged more when customers end up using the labels to return their purchases.

Pro. Return labels make it easier for shoppers. Including a free return label with every order makes it easier for customers to send their purchases back because they don’t even need to contact your customer support team. All they need to do is affix the provided label to the package (after printing it out first if you include PDF labels in your order confirmation emails instead of placing physical labels inside packages) and drop it off at the nearest post office.

Con. Return labels prevent you from getting feedback. Allowing customers to return their purchases without contacting you can remove the opportunity to get feedback from them; you won’t know why exactly they decided to return the purchase and what they weren’t satisfied with. Without analyzing the reasons for returns, you won’t be able to improve your service and reduce return rates.

Pro. Return labels can increase customer satisfaction and boost loyalty. According to statistics, a free return policy makes customers more likely to order from your store even if they are not familiar with it and place a repeat order even if they returned the first one because the opportunity to return a purchase with ease and with no additional fees helps remove uncertainty, increases trust, and creates a positive shopping experience.

Con. Return labels may cause you lose money due to shipping fraud. It doesn’t happen too often, otherwise online merchants wouldn’t use prepaid return labels so widely, but prepaid shipping labels can be used for a range of scams that can make merchants lose both money and trust in their customers, even though scammers make up a tiny portion of customers who use return shipping labels.

So, while you can definitely benefit from a free return policy, including return shipping labels with orders might not be the best decision. If it works for you, good! Go for it! If it doesn’t, you should consider emailing prepaid shipping labels to your customers upon request, which will allow you to get feedback from shoppers and spend money on returns only when strictly necessary. With PostageMaker, you can easily generate prepaid return labels online and save on returns due to our shipping discounts.