Management is the lifeblood of any successful business, getting things done while meeting business objectives. In retail and eCommerce the returns management process is a key part of that, it can directly impact customer satisfaction and operational efficiency.
By make a productively return management businesses can boost customer satisfaction, reduce lost sales, stay competitive and also minimize returns.
Here are the tips to help you manage your returns better.
Companies may wonder what is return management?, a management process is a series of structured activities and workflows to achieve business objectives.
These processes involve planning, executing and monitoring to get the best results.
Whether in brick and mortar store or a online store, managing returns is part of the broader returns management process, it intersects with logistics, inventory and customer service.
Businesses operate through:
Operations management: Getting daily activities like manage inventory, manage correctly the customer requests, planning delivery routes, to align with business goals.
Inventory management: Managing stock levels to avoid overstocking or stockouts its very helpful on the retail industry.
Returns management: Managing returns process to handle return requests faster. This will give better customer service and can reduce customer returns.
Customer communication: Addressing what is going to customers wishing and customer feedback to delight.
The returns management process is key to the customer experience, especially in eCommerce where online purchases often result in returns due to reasons like wrong size or damaged items.
A managed returns process helps with consumer retention, reduces negative reviews, and overall operational efficiency.
how to manage returns is a question companies may ask, and returns management is all the activities involved in handling customer returns, reverse logistics, inspections and issuing refunds or store credit.
A good system ensures customer has a smooth experience whether shopping online or in-store.
Customer Loyalty: A customer decides to buy again more often when there is an efficient return management in eCommerce. Strategies like offer free returns or easy refund policy builds trust and good relationship
Cost Savings: Simplifying the reverse logistics reduces unnecessary costs like extra shipping costs and associated costs.
Competitive Advantage: A hassle-free returns management process solution will attract online shoppers and retain many customers by meeting their needs.
Sustainability: An eco-friendly customer returns process will reduce waste in the online store and improve brand perception.
A smooth returns process is key to customer satisfaction. Customers expect a quick resolution to their return requests whether they want a full refund or exchange.
By putting their convenience first in the company's returns policy businesses will meet customer expectations and minimize unhappy customers and customer dissatisfaction.
Defining goals is the starting point of a good returns management process.
Goals help eCommerce businesses focus on what’s important like efficiency, cost reduction, and customer experience.
Without clear goals, the process will be inconsistent and allow unsatisfied customers to leave negative reviews.
To succeed businesses should align their return order management goals with overall business strategy. For example:
eCommerce businesses may focus on reducing the time to process returns to increase online sales.
Retailers may want to simplify reverse logistics to reduce costs while maintaining high customer service.
A priority could be to track returns data to identify controllable returns (e.g. product defects) and uncontrollable returns (e.g. customer decisions).
Examples:
Reduce average time to process returns by 20%, by make a return merchandise authorization fast for example
Increase consumer retention through a better refund policy.
Reduce lost revenue by offering store credit or alternatives to refunds, to reduce customer returns.
Improve returns management process systems for real time monitoring.
A smooth returns management process saves time, reduces errors and increases customer satisfaction. Businesses can simplify workflows by:
Providing pre-printed return labels to speed up shipping.
Having clear guidelines for employees handling return requests, this also going to boost the supply chain process.
Using standardised process to evaluate and approve returns data.
Automation is the key to returns management services. By using advanced tools like returns management programs businesses can:
Auto authorise return merchandise authorisation (RMA) requests.
Track products through the reverse logistics process.
Link inventory management system to returns process to prevent stock mismatches.
Good inventory control is key to minimising disruptions caused by returns. By linking the returns process to stock management system businesses can:
Update stock levels in real time after proceduring returns.
Products to resell, refurbish or recycle.
Reduce lost sales by restocking returned products quickly.
A smooth returns management process relies on a trained team.
Employees need to understand the importance of managing eCommerce returns to meet customer expectations and handle return requests quickly.
Proper training reduces errors, improves consumer experience and ensures compliance to company’s returns and refund policy.
Employees involved in returns management should:
Problem Solving: To handle issues like missing items or poor packaging during the reverse logistics process.
Customer Communication: To be professional and empathetic when dealing with customer refund or exchange requests. This must be initiated since the beginning of the process when the customer initiates the returns.
Technical Skills: Knowledge of returns management programs to track and process returns smoothly.
Continuous training programs keep employees up to date with best practices and technologies like optimising the shipping process or integrating returns management programs.
Regular reviews and customer feedback will help identify areas for improvement so teams can adapt and refine their workflows will managing returns effectively.
Using technology in the process simplifies, reduces errors and improves efficiency.
Tools like returns management programs automate tasks, track returns data and reduce human intervention so businesses can process return requests faster.
Returns Management Software: Platforms that auto generate return labels, track shipments and issue refunds or store credit., helps to managing returns more easy. Make sure to make a research to choose the best return management software for your operations
Inventory Management System: Tools that link to the returns process to update stock levels in real time.
Third Party Logistics: Providers that manage the reverse logistics aspect like product inspection, repair and shipping.
eCommerce businesses like Amazon are using advanced algorithms and robotics to optimise their reverse logistics process so there’s no delay in online sales.
Small businesses using cost-effective tools like Zoho Inventory have reduced operational costs and improved efficiency in managing uncontrollable returns in the returns management process.
A customer focused returns policy is key to increasing customer satisfaction and retaining online customers.
A policy should be clear, simple and flexible to meet customer expectations. This includes:
Free returns for eligible products.
Multiple resolution options like exchange, refund or store credit.
Seamless returns process by offering hassle free process for customers to return products.
While customer experience is key, businesses must also reduce costs. For example:
Implement policies that encourage exchange instead of refund to maintain profit margin.
Analyse returns data to identify controllable returns and address the root cause, like shipping wrong size products.
Use third party logistics to manage reverse shipments, cost effective and quality service.
Zappos: No questions asked return and refund policy with 365 days return window, consumer loyalty booster.
ASOS: Simple and flexible with easy to use returns management process, favourite among ecommerce businesses.
Monitoring your returns process is key to identifying inefficiencies and areas for improvement.
Regular reviews will ensure your policy and workflows meet customer expectations and operational goals.
Return Rate: Percentage of total sales that result in return requests.
Processing Time: Time to process returns and resolve.
Cost Per Return: Shipping, labor and restocking costs.
Customer Retention: Percentage of customers who shop again after a return.
Advanced returns management programs and data analytics tools allow businesses to measure KPIs and adjust processes in real time.
These tools also link to stock management system to keep stock levels accurate after each return so you don’t lose sales or overstock.
Analyzing returns data not only improves the returns process but also identifies opportunities for innovation.
For example, companies can fix packaging issues or product descriptions to reduce out of control returns.
Managing customer returns can be tough especially for ecommerce businesses with high volumes. Some common pain points are:
Uncontrollable Returns: Products returned for reasons beyond the business’s control, like wrong size or buyer’s remorse.
Controllable Returns: Poor packaging, product defects or misleading descriptions.
Shipping Costs: Managing the high cost of reverse logistics and return shipments.
Inventory Management: Delays in restocking returned products, resulting with decrease in sales.
Use returns management programs to automate tasks and reduce manual errors.
Partner with third party logistics providers to simplify reverse logistics.
Analyse returns data to identify recurring issues, like frequent complaints on specific products.
Retail giants like Target have simplified returns by offering customers flexible returns in both online and offline stores.
Businesses like Stitch Fix are tackling controllable returns by using AI to recommend products that match customer preferences.
A sustainable returns process is good for the environment and can also reduce operational costs and customer complaints.
By removing waste and inefficiencies in the reverse logistics process businesses can be more sustainable.
Recycling and Refurbishing: Reuse returned products instead of discarding them.
Reduce Returns: Educate customers on sizing or specifications to reduce out of control returns like wrong size issues.
Partner with Green Logistics Providers: Use eco-friendly options for transportation and product disposal.
Brands that highlight their sustainability in the returns process have a competitive advantage as many customers prefer to shop with companies that share their values.
For example Patagonia promotes their recycling initiatives which appeals to eco-conscious customers and increases customer loyalty.
Returns management requires collaboration between multiple departments like customer service, logistics and inventory teams.
Lack of communication can lead to delays, increased operational expenses and poor customer satisfaction.
Unified Communication Tools: Use tools that centralise communication so everyone is aware of updates in the returns process.
Shared KPIs: Set up metrics like time to process return requests to encourage teamwork.
Feedback Loops: Collect and act on feedback from all teams involved in returns to solve bottlenecks.
Companies like Nordstrom are aligning their stock management systems with customer service platforms to update returned products in real-time.
An ecommerce business using shared dashboards between teams improved their inventory accuracy and reduced decrease in sales due to delayed restocking.
Returns can be costly if not managed well. Cost drivers are:
Shipping Costs: Especially for businesses that offer non-costs returns or international shipping.
Reverse Logistics: Retrieving, inspecting and restocking products.
Labor Costs: Manual effort in inspecting and processing returns.
Automation: Use returns management systems to reduce manual tasks like issuing return labels or tracking shipments.
Clear Product Descriptions: Minimise uncontrollable returns by providing product information to customers during cybershopping.
Store Credit: Offer this type of credits instead of full refund to retain revenue and encourage future sales.
Investing in technologies like an advanced returns management solution or partnering with a 3PL can save significant costs.
Tracking the return on investment (ROI) of these initiatives will help businesses understand the value and optimise for higher margin.
Ecommerce and retail leaders are already implementing innovative ways to manage returns.
Other businesses can learn from them and improve their own returns procedure to increase customer satisfaction and cost savings.
Automated Returns Solutions: ASOS use returns management systems to automate return requests and track products.
Flexible Return Options: Zappos offer hassle free, non-costs returns with multiple return channels including mail or drop off locations.
Proactive consumer Communication: Amazon sends updates on the returns procedure in real-time to ensure a smooth customer experience.
While big businesses have the resources to implement complex systems, smaller businesses can apply these by:
Partnering with 3PL for reverse logistics.
Using an effective returns management software to streamline processes and reduce costs.
Offering value added services like consumer credit to increase customer loyalty.
Returns management is key to a positive customer experience and business success.
By simplifying workflows, using technology and designing customer centric policies businesses can process returns better, save costs and increase customer satisfaction.
Businesses that invest in their management process gain a competitive edge and customer loyalty.
Whether ecommerce or traditional retail, returns management will ultimately improve your end to end supply chain and margin.
Getting the reverse logistics right, from starting the return to restocking inventory is key.
Providing product descriptions and size guides during online purchases can reduce uncontrollable returns like products with wrong proportions.
Returns management software and stock management systems simplify tasks, improve accuracy and reduce labour costs in the returns procedure.
Non-costs returns builds trust and encourages future sales, resulting in higher customer retention and satisfaction.
By adopting cost-effective strategies, such as outsourcing reverse logistics to third-party logistics providers and focusing on customer-centric policies, small businesses can stay competitive.