Best Practices in Returns Processing

‘Tis the season for holiday merchandise returns. With online sales at their highest volume ever returns have become a critical component of the supply chain. Both B2B and B2C companies need to ensure a seamless returns process for their customers. Missteps can lead to higher costs and customer dissatisfaction.

Industry Returns Data

Online return percentages can be dependent both the type of product and the company’s returns policy. While the average industry rate is four percent, consumer durable goods can range from two to 10 percent and apparel can be in excess of 20 percent. According to Multichannel Merchant, there are several reasons for merchandise returns.

  • Customer ordered incorrect product or size
  • Customer decided product was not needed or wanted
  • Customer returned product with no reason given
  • Product did not fit description on website or in catalog
  • Product did not meet customer’s expectations
  • Company shipped incorrect product or size

The High Cost of Returns

Returns touch more of the supply chain and result in redundant, often unforeseen costs. Below are examples of costs associated with many returns. These costs can add up quickly and reduce your bottom line profit.

  • Initial outbound fulfillment processing + shipping costs
  • Returns shipping + inbound returns processing costs
  • Replacement shipment + outbound replacement shipping cost
  • Call center or customer service costs
  • Credit card or merchant transaction costs
  • Back end disposition of products that are damaged or faulty
  • Customer dissatisfaction or loss of customer, poor reviews

Start with a Solid Returns Policy

Two thirds of online consumers will read your returns policy prior to making a purchase. Therefore it is critical to develop a solid policy to effectively engage your customers. Make sure this policy is clear and is aligned with the types of products you sell. Be sure to clarify the timeframe, condition and returns policy details before the purchase. A solid returns policy will also protect the merchant in the event of a disputed charge. If your policy is unclear, the credit card company will favor the customer, not the merchant.

Make the Returns Process a Positive Experience

A returns experience that satisfies the customer can build trust, encourage repeat business and spread a positive brand experience. Customers who are unhappy with their returns can result in negative feedback or the loss of a customer. Allowing customers to print a returns label or providing one with the shipment will help simplify the process. This method also creates a transaction with an RMA (Returns Merchandise Authorization) or reference to the original sales order number. This number can be scanned into the system and processed more quickly, resulting in a faster replacement order or a credit back to the customer.

Find an Experienced Fulfillment Partner

While returns will always be a part of doing business; outbound shipment accuracy and effective returns management will help manage costs and the experience for the customer. Experienced fulfillment companies like EchoData scan and ship items accurately the first time, consult on proper packing techniques to reduce damage during transit and apply systems designed to handle the returns process.

When it comes to returns processing, companies need to focus on their returns policies and customer service, information technology, markets and speed, organizing for returns, physical facilities and resources as well as product quality and packaging.  Having these systems in place will ensure returns are handled properly and your customers are satisfied with the complete shopping experience.