Purchase returns are the most common problem people go through when shopping online. The main purpose of this product is to enable users to report a return in case they purchased something that didn’t fit, or they didn’t like and other few reasons.
Report a return
What if purchase returns would have the same simple experience independent of the store you buy from? Yes, we made it. Only a few taps and a return is reported, the merchant is notified so they can rebalance their stock and the customer's invoice is paused so they don't need to pay for something they are not keeping.
-17% Return errands
+3% Conversion rate
40k Returns reported monthly in the app.
Most of the time people report a return and after they forget how to do it. We created a simple step by step instructions with everything they need. Another common pain is that they don't know when the item has returned. So we created an integration with the store that once the return has been registered we notify the customer and update his invoice.
Some people like better interacting with a chatbot and that's fine. Our customers could also request the return by interacting with our Klarna Chatbot.
The feature is also available in our web application with the same simple experience.
Behind the Scenes
1. User journeys
We started the project by trying to understand people’s journeys when returning purchases. We gathered data, talked to stores, consumers and the customer service which had lots of knowledge of people’s main concerns.
After going through a lot of information, we ran in-depth interviews in the markets we are present to validate our assumptions about people's purchase return journeys. The research also brought tons of insights on how to create the best solution.
Avoid buying things I might have to return
People are concerned to buy things that they are not sure if will fit them. They reported that its a hustle to return and even more if they have to wait to be refunded.
Paying for what I won’t keep is a burden
Most of the time people report that when they shop they have to pay and then if they don’t like the product for some reason they need to go through the refund process which can take quite long.
Understanding how returns work for each store is a nightmare
People were skeptical to buy in stores that they weren’t sure about their return processes.
After understanding all the complexity within the returns journey, we started ideating to create the simplest return experience.
• Reduce the costs with delivery errands for Klarna and the merchant.
• Increase the conversion rates from merchants by providing a simple return experience that customers understand and are happy to repeat a purchase.
3. Results / Business & user impact
The return experience is currently live for all our 9 million users. A few weeks after we launched we were happy to see positive results.
Merchants reported an average of 30% return errands from all purchases in a year. Before all these returns were handled by the merchant or our customer service agents, which generated thousands of dollars in costs for our merchants. After launching returns on the Klarna app, this number dropped to 13%. Therefore reducing operational costs for our merchants radically.
Returns reported monthly in the app
On average 40k returns are reported, from 20 million purchases a month. The general feedback from users was that the feature made their lifes much easier since they can manage all their purchases in one place. We are also working on features that will reduce the number of returns by helping users to choose products that are the right fit for them.
Klarna has a great track record of creating products that positively impact conversion for new merchants who choose to integrate. The post-purchase experience (deliveries and returns) helps to build trust with our merchant’s consumers, resulting in more confidence to buy. Increasing the conversion rate with 2-3% with an estimated AOV of $128 would result somewhere around 78-117 mkr per day.