How to Streamline E-Commerce Returns Management

Returns are a natural part of the buying cycle. Because consumer convenience is the key to brand loyalty, it is essential businesses are adapting their fulfillment strategies towards a streamlined return process.  Reports collected by Invespcro confirm that 92% of customers will buy or order from a store again if the return process is made easy.
Having a streamlined returns management service for your e-commerce site will improve the quality of customer support, and it will lower the overall cost of dealing with returns. This begs the question: How can you manage and streamline e-commerce returns? And how can you capitalize on its benefits?

Customer Returns Have Been Increasing

Returns in fashion retail have been excessively high, with 30% of purchased articles returned to the store. This aligns with a study done by Narvar in 2018, showing that 41% of shoppers have bought something with the intention of returning it. These numbers have been steadily increasing over the last ten years, and experts have speculated a few reasons.

  • Attitudes about returns are changing – Consumers are becoming more confident when it comes to shopping from an online store. If something is off with their purchase or if they change their mind, they’re not afraid to send it back.
  • Ease of returns – This attitude change is also influenced by the fact that there are easy methods of retail returns now. Companies will provide printable return labels and offer no questions asked policies. They’ll even pay for the return shipping costs.
  • Try before you buy stores – Several online stores are popping up that allow you to try on a product before purchasing. Companies like Zappos send customers multiple pairs of shoes and whatever they don’t return are considered bought. It’s this method of shopping, some experts believe, that is changing the way consumers think of the return experience.
  • Buy Online Return in Store – Another option retailers are providing for their customers is BORIS (buy online return in-store). Returning things by mail can be a pain for customers. With BORIS, customers can easily make returns without dealing with shipping labels and packaging. Plus, retailers don’t have to worry about these items being shipped properly—they can just set up an in-store smart locker to handle it. Win-win!  

Setting up E-commerce Returns Management

If returns are increasing, then companies have to come up with new supply-chain strategies and solutions to handle them. Nowadays, companies create new departments with the sole responsibility of returns management. This is an expensive process that involves: 

  • Hiring employees
  • Finding warehouse space 
  • Spending money to repair or replace returned items
  • Paying for return shipping

While the upfront investment is high, it’s essential to keep customer service and customer convenience as the forefront objective. A customer’s lifetime value far exceeds the cost of a few return shipping labels.

Streamlining The Process

To better handle this system, there are a few different factors to consider updating within your e-commerce business.

  • Customer Communication – Are return packages randomly showing up on your company’s doorstep, or do you have a dedicated web page to directing customers on how to return their items? The difference can be countless hours of wasted time and staff labor.
  • Tracking – How are the packages tracked? Is there a dedicated computer system handling all inventory tracking or are there tracking numbers written on post-it notes with the word “Reminder!” on them? Setting up a tracking system can ensure packages don’t get lost en route. This will avoid uncomfortable conversations with consumers about if they sent the package or not, which can ruin customer satisfaction.
  • Shipping – Having an easy-to-use system for customers to print shipping labels can prevent the unnecessary hassle of tracking down packages that went to the wrong address.

Reducing The Cost of Returns Management

Using the above as a guideline, reducing the cost of returns management can be achieved by saving money on each component.

  • Bulk shipping costs – Instead of having customers individually ship items back—which can cost up to $10 per return—set up designated drop off zones. Using smart lockers, like the ones made by Parcel Pending, a single employee can drive to a nearby locker and pick up any number of waiting returns. This creates bulk returns, which will significantly lower costs.
  • Warehouse efficiency – Tracing down each return one at a time can be an easy way to waste the day. To be efficient in warehouses, companies can use smart lockers to streamline operations and keep track of every return. 
  • Automate the tracking – As your company scales in sales, it will also scale in returns. For smaller e-commerce companies, it might be possible to keep on top of the tracking system manually. However, as your business grows, this method of inventory management will quickly become unmanageable.  Automating the traffic sooner than later with the integration of a tracking system can save time and money. 

Bring on The Returns

While returns usually mean the customer was dissatisfied with your product, you can take solace in the fact that no company is avoiding this problem. It’s now part of the retail landscape, and for the time being, companies and business owners are stuck with them. Be sure to set up a streamlined e-commerce returns management system to prepare yourself.
It’s simple economics. Lower the costs of your returns; increase the profit of your company. With a reliable communication, tracking, and shipping system in place, you’ll be ready for any problem that arises, and you can refocus on improving your products. If returns are part of the game, then bring them on. 
Invespcro. E-commerce Product Return Rate – Statistics and Trends. https://www.invespcro.com/blog/e-commerce -product-return-rate-statistics/
Forbes. We’ve Created A Monster: Retail’s Growing Returns Problem. https://www.forbes.com/sites/stevendennis/2018/10/29/weve-created-a-monster-retails-growing-returns-problem/#4a21c681b1a9
Narvar. The State of Returns: What Today’s Shoppers Expect. https://see.narvar.com/rs/249-TEC-877/images/Consumer-Report-Returns-2018-4.3.pdf