Returns are one of the most dreaded yet most prevalent aspects of eCommerce fulfillment. This article explores the adverse implications of returns on eCommerce brands and how to deal with them.
Most retail businesses are leveraging online platforms to showcase their products. Doing so ensures that their product reaches a much wider audience and accelerates their business growth. However, one of the key success factors of any online business is how smooth is the returns policy. The more seamless the return policy, the higher your chances of getting repeat customers. In fact, customers can adjust to a lesser variety of products if that means they get a smoother return experience.
The process of returns is not smooth and, unless you manage it properly, there are high chances that you will end up incurring a business loss. Effective management of returns is one of the key challenges in the online retail industry.
Challenges of eCommerce Returns
The returns that customers make online or in the store seriously impact company profits. Some companies allow customers to buy their products online and return them at their physical stores. The challenge is then finding space in the store for these returned items. The store also must have staff specially trained to receive these returns. Moreover, if all the pertinent details of a return are not updated, the store manager will struggle when receiving returns, not to mention the ire of the customers that, the store and its employees will face.
Impact of COVID on eCommerce Returns
When the pandemic started, there was a sharp decrease in the returns of the product among consumers. The most likely causes included the customers not wanting the added hassle of returning a product. Also, if they chose shop return, they would have to visit the store, which was not ideal during the pandemic. In certain scenarios, the customer had to visit the local store that handled shipping to return a product which is not ideal when the general advice from the government and healthcare agencies was to self-isolate. Interestingly enough, the time taken by eCommerce brands has increased post-COVID.
Returns Policy & Customer Loyalty
When a customer decides to return their purchase, most online brands prefer to return the price of the item to the customer after receiving the returned item. Some offer other modes, such as exchanges or gift cards for the purchased amount. These gift cards can be redeemed in the future within a specific timeframe. Irrespective of the mode of return, many customers base their loyalty on how easy it is to get a return of the item they have purchased. A vast majority of customers prefer to get a return within 30 days of purchasing the product.
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You might face several hurdles if you don’t have a strong returns policy as a retailer. A strong returns policy goes a long way in ascertaining a solid and loyal customer base. It has been observed that certain customers prefer seamless returns over a variety of products available! If you make the returns process easy and hassle-free for your customer, they are more likely to return to you for their future purchases. So much so that you might build a long-term customer base from this smooth and easy returns policy.
Best Practices in Managing Cost & Losses
The returns accrue losses for the company. However, if you handle the returns process judiciously, you might be able to reduce the losses. The following are the ways of managing your returns to ensure minimum losses:
• Return Items to the Warehouse
Specifically, in the case of eCommerce businesses, when you receive the returned product, check if you can return it to the originating warehouse. That warehouse is already set up to store the product and can transition it back to another process for order fulfillment. This ensures that the process of returns is accelerated, and all it takes is a quick update to your inventory management system.
• Return Items to Store
Most customers will be more inclined to purchase online if they can return the product to a brick-and-mortar shop. If you have a physical shop, check if you can open it up for online customers to drop in for a quick exchange or return. You will then be able to inspect the returned product. You will also be able to put it on the display shelf immediately.
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Additionally, when a customer visits your physical shop to return an item, they might be tempted to buy more products from your shop. Of course, it will depend on how convenient and smooth you make the returns process. If a customer is in the shop to return a piece of clothing, they can try a different size immediately, depending on availability.
Once they are confident about their size, chances are you will see more purchases from them in the future online, offline, or both.
• Outsource Logistics Management
A great idea to manage your product returns is to outsource the logistics of it. The management of returns is a lengthy and arduous process. Some third-party logistics or 3PL providers are well-equipped to handle this returns process. They can ensure that product returns are processed per your returns policy. The 3PL provider can also store the returned products in their warehouse.
When a consumer returns a purchased item shipped by a 3PL provider, the product returns to the warehouse of the provider. The team there checks the product and issues a refund. The returned product is then placed to be processed for another order. The whole process is handled smoothly by these 3PL companies and reduces your headache.
Conclusion:
There are various reasons behind customers returning products. Some of the most common reasons include broken or damaged products, the product received is not per the description provided online, the product is of diminished quality, or the customer no longer wanting the product.
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It’s undisputed that returns are costly for your business. However, it might not be as detrimental if you manage the returns process effectively and use that to encourage the customer towards future purchases subtly. The idea is then to use this return process as an opportunity to further your business and build a long-standing relationship with the customer.
About XPDEL:
XPDEL is a leading hi-tech provider of Fulfillment and Logistics Services on a mission to enable growth for eCommerce companies. We are futuristic in our vision and constantly work on creating technology that helps us meet customer expectations for today and tomorrow. We have a wide network of Fulfillment centers that enables us to efficiently handle nationwide delivery in the US – same day, next day, and 2-day delivery. Being closer to the end consumer, we deliver much faster than others.
