Strategies To Streamline Return Management And Reduce Cost: A Complete Guide

How To Streamline Return Management

Here’s a fact— at least 30% of all products ordered online are returned as compared to about just 9% in brick-and-mortar stores. Also, a survey suggests that 92% of consumers will buy again if the brand’s online return process is easy.

What does this data depict?

The need to have an easy return policy for any E-commerce brand. 

Having a return process in place allows your customers to have confidence in buying from you. It’s a signal from you that you put your customers’ satisfaction above everything and value their time and money. 

However, handling returns isn’t easy. You need to have a streamlined Return Management process while keeping costs down.

In this article, we’ll be talking all about that. Starting from the basics.

What Is E-commerce Returns Management?

In retail or E-commerce, Returns Management is a procedure that deals with customers who wish to return purchased items. This process involves engaging with customers, receiving returned products, and replenishing the stock with returned items. It is crucial for retailers to handle Returns Management effectively as mismanagement can lead to significant cost implications.

Why Do Customers Return A Product?

Returns aren’t a bad thing, in fact, it’s inevitable. No matter how good your products are, there will always be returns.

However, you can always decrease the return rate by implementing some common strategies. Now to decrease the return rate, you first need to understand what are the common return reasons. Here are a few reasons why customers return products:

Incorrect Product Size

Over 50% of the returns are because of sizing issues. While this may seem beyond the control of an online store, there are ways to mitigate it. 

In a physical store, customers have the opportunity to try products and get a better idea of their size. They can even try on clothes and shoes to check for proper fit and comfort. But this is not possible while shopping online. Discrepancies due to sizing can easily be tackled by offering detailed product description and using size standardization. There are many plug-ins available in the market to help you recommend accurate sizing to your customers. 

Product No Longer Required

Many customers order products online, but sometimes circumstances change and they no longer require the item when it arrives. For instance, a customer may have ordered something online and by the time it comes, you might have got a better version offline, thus not needing it anymore. 

Another reason for returns is when an upgraded version of the product becomes available. Electronics, such as chargers, mobile phones, tablets, and laptops are common examples of this. While this type of product return may be out of your control, there are ways to encourage customers to keep the product by highlighting its unique benefits and/or offering a discount coupon. 

Mismatch Between Product And Description

It’s not uncommon for products to appear different in reality than they are described in the product description, which can lead to customer disputes and reflect poorly on business practices. To avoid this, product descriptions must be detailed and accurate. 

Crafting complete, clear, and accurate descriptions is crucial to answering customers’ questions and avoiding disputes. Additionally, it’s important to proofread the descriptions and accompanying images before publishing them, as first impressions matter. Take the time to write, read, edit, re-edit, and proofread descriptions to ensure their accuracy and avoid any potential misunderstandings. Make sure your descriptions are accompanied by clear product images from different angles, leaving no surprises for the end consumers. By providing clear descriptions and real-life product images, sellers can prevent unnecessary disputes and returns. Read our blog on how to click awesome product photographs to get started. 

Wrong Product Shipped

Effective product picking is a critical task in the fulfillment process, and failure to do so diligently can lead to a significant number of returns. It’s important to ensure that the correct products are properly sorted and selected, as mistakes can result in unnecessary labour and shipping costs. 

To mitigate this risk, partnering with a 3PL (third-party logistics) fulfillment provider with robust OMS (Order Management Systems) can be a viable solution. These providers have expert teams who handle products, sort them, and pack and ship them. They also offer storage solutions, and when an order is received, they can process it on your behalf. By utilizing the services of a 3PL provider, businesses can minimize the risk of errors in product picking and save on associated costs.

E-commerce Return Management Process Explained

E-commerce Return Management Process

The Returns Management process involves multiple touchpoints or points of interaction between the customer and the E-commerce business. However, it all begins with the customer initiating a return.

Customer Requests A Return On Their Order

Returns can occur for a variety of reasons, some of which may seem illogical and based solely on the customer’s emotions. Let’s consider the scenario in which a customer is dissatisfied with their order. 

In this case, the customer would select the item they wish to return and provide a valid reason, as requested by the E-commerce business.

Return Request Is Rejected Or Approved

If return requests do not meet the conditions set by the E-commerce business, they may be rejected, and the interaction regarding that order ends. 

However, if the return request is valid, it can be approved, and the process for initiating the return will begin.

Order Is In Transit

From the moment an order return is scheduled to be collected until it reaches the E-commerce store, it is considered to be in transit. During this time, E-commerce brands can take advantage of these moments to share return status updates with their customers.

Product Is Returned To The Store

After the returned product has been received by the E-commerce store, collecting customer feedback on their shopping experience with the brand can begin. If the feedback is positive, the E-commerce business can consider encouraging the customer to shop for a replacement product (if they haven’t already chosen one).

E-commerce Returns Management Process: Best Practices

We’ve already talked about the importance of having a good Returns Management process in place and now here are some best practices to help you achieve the same.

Have A Shopper-friendly Returns Policy

More than 67% of shoppers check a brand’s return policy before buying. This is why it’s imperative to dedicate a page on your website clearly describing your return policy.

Here are a few things to consider while creating a return policy-

  1. Clarify conditions and deadlines for return.
  2. Mention your objectives and customers’ needs clearly.
  3. Don’t encourage fraudulent returns and wardrobing.

By creating a customer-friendly returns policy that balances flexibility with the E-commerce store’s objectives, a win-win situation can be achieved. This can result in increased conversions without the need to spend excessively on customer acquisition or return-related expenses. 

To ensure that customers can easily find the returns policy, it should be prominently displayed in areas of high visibility, such as the home page, product pages, checkout page, and FAQ section. This will help to minimize confusion and streamline the returns process, ultimately improving the customer experience. Read our complete guide on E-commerce return policy to get started. 

Avoid These Common Mistakes

Here are two of the most common mistakes that brands make while selling online.

Mistake: Inaccurate product photo

Photos are among the first few things that customers check before buying any product. If the photos are misleading or different from the real product, the chances of returns are high.

Solution: Keep the photos real. You can make it look attractive but make sure it still shows what exactly the product is like. You can also ask your customers to share real-life photos of the product. Ask them to post their pictures of your product and tag your brand on Instagram. And then use tools like Pixlee, Yotpo, or Later to automatically collect images/videos and display them on your website.

Mistake: Wrong product description

Before buying anything your customers would do extensive research and after that research, if the product doesn’t look or feel like the description, they will return it and may never come back. 

Solution: Write descriptions that match the product’s qualities and standards. 

For example, Nykaa provides in-depth as well as visually appealing product descriptions that are easy-to-read and understand.

Product Description Example By Nykaa

 

Offer Fast And Easy Returns 

A staggering 92% of shoppers are more likely to make repeat purchases if the returns process is easy. Furthermore, E-commerce businesses can simplify the returns process by enabling customers to initiate returns easily and quickly through a returns portal. 

With a returns portal, customers can access their orders, select the item they wish to return, provide a reason for the return, and select a return method in just a few minutes. This streamlined experience can make customers more inclined to continue shopping with the E-commerce business, ultimately boosting customer loyalty and retention. Also, adding the option to return in-store can also be helpful for people who want to return immediately. 

Collect Customer Feedback

Collecting customer feedback is essential. The reason behind this is that these feedbacks provide you with valuable insights into the customer experience. By understanding why customers are returning products and their overall satisfaction with the returns process, E-commerce businesses can improve their Returns Management policies and procedures. 

Moreover, customer feedback can also help identify common issues that customers may face when returning products. For example, if customers frequently experience delays or issues with return shipping, you can take steps to address these issues and improve the returns process.

How Flipkart collect feedback from customers

Use Data To Decrease The Chances Of Return

Making your marketing and operations team work together can get your brand to touch new heights. 

By leveraging customer feedback and segment data, you can easily identify the following things:

Problematic products:

By checking and analyzing feedback and returns you can easily spot which products are problematic and getting returned the most.

Problematic customers:

Create personalized profiles for high-risk customers by utilizing customer segmentation and feedback. Share this information with your marketing team to help them determine the appropriate customers and products to target. 

When a product with a high return rate is bought or a customer with a history of high returns makes a purchase, send them a targeted email.

Problem with the products that are good but different:

For instance, with the help of user feedback, you know there’s a t-shirt that runs one size smaller than the standard size. Now to handle this, you can mention on that particular brand’s products’ page that the size runs smaller than the usual ones. This small note will help customers determine and order the right size and, in turn, will reduce returns. 

Restock Returned Products To Improve Inventory Flow

The success of a retailer heavily relies on its inventory management. Apparel products, in particular, tend to lose their value quickly over time, which means it is essential to avoid being left with a large amount of unsold merchandise at the end of the season.

This is exactly why effective inventory management and proper reverse logistics are crucial for E-commerce retailers.

About 30% of products sold are returned. Timely grading and restocking returned products are vital as every minute in the warehouse and every touch by a worker increases the cost. Inefficient handling of returns can lead to up to 10% of sales revenue loss. This issue becomes even more significant for multichannel sales, where fully integrated inventory management can make a significant difference. 

Thus, streamlining the returns process improves both customer experience and operational efficiency.

Recapture Costs From Damaged Good

Recapturing costs from damaged goods is the process of recovering the real value of the returned product. In this process, instead of simply rejecting the product, you can try to salvage some value by repairing, repackaging, or reselling the product. By recapturing the costs of the returned product, you can reduce your losses and improve your bottom line. Proper inventory management and reverse logistics processes can help you streamline this process and recapture as much value as possible from damaged goods.

Provide Exceptional Customer Service During Returns

According to a report, a whopping 89% of consumers say that they are more likely to return and make another purchase after positive customer service. 

It’s no secret that customer service is an essential component of brand building. Nearly 3 out of 5 customers report that good customer service is crucial to stay committed to a brand. And if you don’t provide good customer service during returns, they will feel betrayed and may never buy from you again. 

Outsource Your Reverse Logistic Process To ANS Commerce

At ANS Commerce, we specialize in helping E-commerce businesses to optimize their storage and supply management processes. Our services encompass the entire supply chain, from product inwarding to final delivery and even Return Management. By leveraging our expertise and technology, we can help streamline your operations and improve efficiency, ultimately saving you time and money. 

Whether you need assistance with inventory management, warehouse organization, or order fulfillment, our team is dedicated to providing customized solutions that meet your unique needs. Let ANS Commerce be your partner in optimizing your supply chain and taking your business to the next level.

Connect with our E-commerce expert today to see how we can help you grow your business.