Rethinking Shopify order cancellations: A data-informed approach
Why customer self-service order editing matters for your bottom line
Did you know that over 80% of cancelled orders on Shopify are immediately replaced with new ones? According to our data of Shopify merchants that allow self-service order cancellations, the most significant cause for cancellations is a mistake that customers immediately plan to rectify.
Customers sometimes make order mistakes between hunting down discount codes and deciphering return policies. They place an order, then quickly realize – oops, picked the wrong size, forgot to add that discount code, or just had a sudden urge to add one more item.
If you’ve enabled self-service order cancellations, then customers have the ability to solve their order mistakes themselves. But if you don’t, you’ve probably seen support requests for ‘order cancellation’ or ‘modification’ queueing in your inbox like rush hour traffic, messing up your smoothly-running order fulfillment operations.
Order cancellations happen regardless of whether self-service order editing is enabled. Allowing customers to make their own order changes can seem scary, but let’s delve into the world of data and statistics, which reveals an exciting narrative – allowing your customers to edit their orders with Customer Portal can actually boost your profitability while enhancing customer happiness (and set up takes less than 5 minutes!).
We’ll provide the stats so you can make data-informed decisions and show you how self-service order changes can:
Lower costs by reducing returns
Reduce routine tickets and allow your team to focus on high-value work
Boost customer satisfaction
Should customers be able to cancel orders?
Allowing customers to cancel orders themselves is beneficial for so many reasons:
Over 80% of order cancellations are immediately replaced with a new order by the same customer.
Self-service order cancellations help save business costs
Self-service provides a fantastic customer experience
Gathering cancelation reasons provides valuable business insights
More often than not, cancellations are simply a customer’s white flag of surrender when they botch their orders. Maybe they accidentally clicked on the wrong model or decided to add in a few more items last minute, or they blanked on adding the discount code that took an archaeology expedition in their email to find.
Our data sheds light on some numbers – a startling 68.2% of cancellations happened primarily because customers wanted to correct a mistake.
18.9% of mistakes were related to adding discounts.
43.1% of mistakes were related to adding the wrong item to the order.
13.7% wanted to change the payment type, like adding a gift card.
6.8% wanted to change their shipping details.
Envision this as less of a headache and more of a gold mine of opportunity. Instead of handling every cancellation or order change request that comes through your support queue, empower your customers to make their own changes. Looping in: self-service order editing.
By allowing customers to rectify their own mistakes, you not only minimize the collateral damage of cancellations – like the expensive cost of returns for your business – but also boost customer morale. A satisfied customer is probably a repeat customer. According to Forbes, 87% of customers who say they had a great experience will make another purchase from the company.
Giving up that bit of control can be hard, but self-service order editing has customizable measures in place. While customers enjoy the convenient benefits of editing orders on their own, merchants control a lot:
Editing window timeframe
Fraud prevention controls
Disallowing specific order tags from editing
If you think customers shouldn’t be allowed to self-edit their orders, we hope the stats give you a new perspective. The data shows that self-service order editing might just make order cancellations appear less like obstacles and more like low-maintenance, self-running business opportunities.
Key insights from data
Unraveling the data from when we first released Customer Portal at the beginning of 2023, we found some surprising stats:
The top reason for order cancellations
The top reason for order cancellations is that customers want to correct a mistake. This accounted for 68.2% of order cancellations, with about 30% of mistakes being “wrong item in the order.” Astonishingly, a full third of all cancellation reasons was because a customer simply clicked on the wrong item.
The second most popular cancellation reason was that 13% of customers canceled their order because they wanted to add an additional item. About 18% of canceled orders were true cancellations.
✅ Consider this Add an 'edit order' button, and a large portion of manual work from order cancellations just vanishes.
Reordering after an order cancellation
More than 80% of canceled orders will be replaced with a new one. Yes, your customers aren't straying away; they're simply course-correcting their initial orders. Giving your customers the power to cancel their orders isn’t something to fear, it’s something that significantly helps your business. And the less than 20% of orders that are genuinely canceled? Now you won’t have to deal with returns on these orders and their associated costs.
“If they’re inclined to cancel, it’s more satisfying for them to cancel themselves and not have to wait to make sure the email was received in time,”
— Brad Bennett, Pacific Pickle Works
The customers who are in the minority and genuinely want to cancel their orders thanks to buyer's remorse or another reason, will find a way to cancel anyway. But if they don’t have access to self-service editing, they’ll instead clog your support queues when your team’s time could be better spent dealing with higher-level issues. Or they’ll make a costly return. Brad Bennett, the founder of Pacific Pickle Works in California, experienced this first-hand. After enabling Customer Portal, his operations saw a huge improvement.
Cost of returns
Finally, the climax of the data deep dive: when you use Customer Portal to allow self-service order editing, you save drastically on the cost of returns because 42% of current order cancellations might never happen thanks to switching out items and adding new ones. The average $50 item costs brands $33 to return. Imagine the money saved if you didn’t have to process those returns because customers could correct their own order mistakes.
By enabling order cancellations, you sidestep the cumbersome process of managing returns—an activity that nibbles away at your funds and makes your logistics team break into cold sweats. Return costs include not just shipping and handling but also restocking expenses and potential loss in value of returned items. This can cost about 21% of the item’s original value.
A study by Voxware found that 29% of returns are due to ordering the wrong item. You can minimize shipping errors and slash return rates by enabling customers to review and edit their orders.
Getting the most from order cancellations
Rethink cancellations. Don't see them as profit-siphoning pests; instead, view them as opportunities to save costs and gather strategic insights. Here's how:
First is by embracing self-service order cancellations.
This move reduces the financial drain of returned goods, and with Customer Portal, customers can disclose why they canceled, giving you valuable data to shape your product offerings. For example, maybe you find out that all your customers who ordered a poster-sized picture frame switched to smaller sizes, indicating that your product descriptions could use some clarity.Then, consider how you handle refunds.
A full refund might be the go-to move, but what about store credit or a gift card? It pleases the customer and keeps the funds within your store.And finally, ponder over cancellation fees.
Could a small fee offset some costs, or does the risk of upsetting your customers outweigh the benefits? Each business is unique; choose wisely.
Once the fear of cancellations fades into the background, customer satisfaction leaps forward. With fewer cancellations breaking your stride, your operations run smoother. Your support team, liberated from the order cancellation avalanche, can focus on creating even more delightful customer experiences.
Be a leader in ecommerce
In our rapidly evolving economic climate, it's not just about keeping up—it's about leading. Leading with innovative approaches, leading with data-backed decisions, and, most importantly, leading with a customer-centric approach.
Through this journey, remember the customer who picked the wrong color or the one who wanted to add another item to their cart. Think of Lola and countless others in the same boat. Sometimes, they just need a chance to edit. Why not offer it to them? After all, while perfection may be a myth, a fantastic customer experience doesn’t have to be.
