Skagen Clothing earns an additional €41,600/month

Returns are not (necessarily) ≠ refunds

Like many other e-commerce businesses in the fashion industry, Skagen Clothing experiences a significant portion of all shipped orders being returned.

“We have improved the size guide and many other aspects, but return volume remains an inevitable part of the business,” says co-founder Thomas Melgaard.

In October 2024, we partnered with Skagen Clothing for what might at first seem like a boring iniative: How can the return process be transformed from a practical necessity into a strategic advantage? Here’s the process we followed.

The solution

The first few weeks were spent testing the new flow, setting up incentives for exchanges and gift cards, including differentiated prices on return labels and bonuses on gift cards.

Skagen Clothing had already tested the price elasticity of return labels and knew the optimal price point for their customer segment.

In November and December, products worth €247,148.07 were returned, of which €103,406.70 (41.84%) was converted into exchanges and gift cards.

Of this, 29.3 percentage points were exchanges, while 12.1 percentage points were refunded as gift cards.

Proactive monitoring and alerts

With the volume of orders that Skagen Clothing handles, there can be instances where something goes wrong: A customer changes their mind, a return package is lost by the carrier, or perhaps it gets forgotten in the warehouse.

Returnflows continuously monitors Shopify, SmartPack, and Shipmondo, alerting the team to any errors, delays, and discrepancies before the customer even reaches out.

Shop Overlay

The Returnflows Shop Overlay gives Skagen Clothing customers a clear view of their returned items and current exchange orders, all while allowing them to continue shopping seamlessly on Skagen's store.

Instant Exchange

When we introduced Instant Exchange to Skagen Clothing, the customer service team was especially excited.

The feature tracks the status of all shipments from Skagen's carriers and sends the exchange order as soon as the customer drops off the return package. This reduces the waiting/lead time from 6-8 days to just 12 hours.

As for customer service? They were relieved to finally have a solution for customers who used to call in a panic about an outfit that didn’t fit for an upcoming event.