Effective Returns Management Strategies To Reclaim Time And Money
Returns happen—there’s no way around them. Well, unless you implement a no-returns policy and, for most industries, this is a surefire way to customer dissatisfaction right up there with charging shipping fees instead of including them in the cost of the item. Whether an item is broken, the wrong size or color, or the customer simply no longer wants it, it’s critical for growing businesses to give serious contemplation to their returns management strategy. Every return, whether or not the product is defective, uses resources—time, money, shipping resources, warehouse space, sorting and restocking efforts.
Online retailers especially are experiencing unprecedented returns as ecommerce sales continue to rise. In 2021, we saw a year-over-year 17.9% increasue up to $933.30 billion. As supply chain issues and shortages continue to mount and everyone struggles to obtain once-plentiful products at a reasonable rate or in a reasonable timeframe, returns incur more pressure than they once did. Every returned item that remains unsorted or caught in transit is an item that’s not available for customers to purchase. Consumer frustration continues to mount surrounding shortages, and unnecessary delays or costs due to returns can incur damages that are reputational and/or include loss of loyalty from customers. It is more important now than ever to implement an effective return management process that is both time and money efficient.
Strategies For Effective Returns Management
There are several aspects of an effective returns management process that businesses can consider to create a more robust and flexible system to handle customer returns. First, it’s important to evaluate the returns management process itself. Only then is it possible to implement actionable, measurable solutions at each stage.
What Is Return Management?
Returns management is a buffet of business aspects—one serving logistics, a helping of customer support, and a hearty side of inventory management. Each of these functions plays a role in the returns management process which, in short, involves communicating with a customer who wants to make a return (customer service), then receiving (logistics), sorting, and restocking unbroken items in the warehouse (inventory management).
Talk To The Customer
When a customer is not satisfied with a product, they will reach out to customer support to initiate a return, refund, or exchange. Here, customer service reps help mitigate reputational damage—and even have an opportunity to boost customer satisfaction and loyalty—by hearing a customer’s concerns and offering options based on the company’s return policy. These options usually include a return, refund, or exchange of the product.
The Decision Is With The Customer
The final say remains with the customer as to whether or not they accept the terms of the return, refund, or exchange. Is the company only offering gift credit? Will the customer be expected to pay return shipping? Will refunds not post to the customer’s bank for up to six weeks? All of these things can result in frustration for a customer and may lead them to choose to stop the process here. However, if the terms are acceptable, a customer will generally proceed with the refund, exchange, or returns process.
Get The Product Back To The Company
If a return is chosen, then companies must now get the product back in their possession. Since most companies use a 3PL service, this usually comes in the form of a prepaid shipping label that the customer receives digitally. The customer then sends the package back to the company’s warehouse or returns facility.
Delivery And Assessment
When the product arrives back at the facility, employees will open the package and inspect the product for any damage (customer incurred or otherwise) and choose whether or not the product is suitable to go back to the warehouse for purchase by another customer. At this stage, there is valuable information to collect (such as whether or not a product was damaged during shipping or if the customer received a faulty item) which can be used to hone other business processes such as quality assurance.
Return To Warehouse Shelves
It is at this stage that products are sorted and restocked. Effective inventory management techniques and close supplier relationships are critical at this stage to ensure that the correct amount of stock remains in the warehouse for optimal storage space and cost imposition while still being able to meet demand.
The Three Pillars Of Effective Returns Management
Speed, visibility, and control are the three pillars to focus on in order to develop a more effective returns management process.
Pillar One: Speed
As mentioned above, the faster you can make decisions about returned products and get them back on warehouse shelves, the easier it is to meet customer demands even in the face of supply shortages. Speedy returns processes support this. Automation is a key component in boosting returns speed. The decision to generate Return Materials Authorizations (RMAs) can be automated. Automated workflows that consider the nature of the product and its value to the company often come into play here. Automatically creating shipping labels and documents can reduce delays due to human error as well as boost speed in the label creation process itself. Some companies also implement user profiles that can help assess return eligibility or group customers by like characteristics for quicker returns management.
Pillar Two: Visibility
Better visibility results in greater speed and control in the returns management process. Offering web-based portals to collect information, integrating carrier info such as tracking numbers linked to returns provide visibility both to the company and the consumer through accurate, automatic updates, and integrating barcodes in receiving and repairs boosts visibility within the company.
Pillar Three: Control
Some returns are under your control while others are not. For example, a customer no longer wants an item vs. the items were improperly manufactured. You can control your quality assurance procedures whereas you cannot control your customer’s fluctuation desires. A major aspect of control in effective returns management is reconciliation. By reconconciling RMAs with information including financial data as well physical shipment and item value data. The result is better control within (in terms of quality and finance control) and without (as it pertains to customer satisfaction). Quality assurance, reconciliation and final disposition, and regulatory compliance are all aspects of the control pillar businesses can assess and implement new strategies within to create a more effective returns management process.
ShipWorks is able to boost speed, visibility, and control throughout the returns process through the use of automation. Additionally, reduced carrier fees can result in major savings during shipping processes. To learn more about how ShipWorks can help boost your business’s returns management process, reach out to us for a free consultation or start a free 30-day trial.