Returns in Retail E-Commerce

The holiday season often means big sales for retailers of e-commerce stores. But it can expect massive returns. E-commerce owners and managers face several challenges when it comes to online returns from increased operational costs to supply chain complexity. The new consumer mentality helps exacerbate these challenges. 

Today’s consumers are ordering multiple sizes and colors of products knowing that they will only keep a few or just one item of the product assortment they ordered and return the rest. In fact, Navar’s annual study on returns reveals that almost 50 percent of consumers who order products online in multiple sizes have the intention to return these products. But the good news is that there are several approaches they can take to combat these challenges. Here are some practical ways to subside the challenges they face with online returns:

Minimize Errors

Part of what makes the returns process so challenging is that it’s easy for errors to occur. Products can be easily misplaced or mislabeled upon return.

Moreover, these return errors can cost e-commerce companies between $35-$50 per product. However, warehouse managers can minimize human errors by enhancing their returns process with quality assurance tools and practices. For instance, warehouse managers can leverage ShipWorks’ Quality Assurance feature to help to reduce errors in the picking and packing process of returns.

Enhance the Return Experience

Organizing returns effectively is often a challenge for many online retailers. Some companies like Bose have multiple touch points that can make the returns processing time and operational costs associated with online returns challenging. The new consumer mindset not only expects accommodation for multiple sizing for the products they order, but they also expect free returns, too. Yet, these free returns come at a high cost for e-commerce companies. Research project the cost of returns to be $550 billion by 2020—a 75-percent increase from 2016. 

Without a productive way to handle returns, online retailers may compromise the return experience for consumers, and with as many as 13 percent of consumers willing to not shop at an online retailer again due to a poor returns experience, there’s much for e-commerce companies to consider. One way to handle returns effectively is to simplify the process by making returns less pricey for the e-commerce company and less complex for the consumer. For example, online stores can partner with physical stores to help consumers with returns processing, such as serving as a collection point for accepting boxes that need to be shipped back to the e-commerce company. Warehouse managers can minimize costs to enhance the returns experience by using ShipWorks Best Rate Tool to find the lowest cost shipping rate that fits their shipping delivery time needs for returns.

Reduce Returns Processing Time

The supply chain complexity often adds to the time it takes to process returns. However, warehouse managers and e-commerce owners can reduce the returns processing time by using effective solutions to help automate repetitive tasks and anticipating a return in advance. For example, ShipWorks provides a feature that helps e-commerce companies print automatic return labels conveniently. By using these labels, warehouse managers and e-commerce owners can save time and money in the long run.

Final Thoughts

While online returns come with its unique challenges, warehouse managers and e-commerce owners can take actionable steps to help reduce these issues. From automating the returns process with printed return labels to improving the return experience by simplifying the process, there’s much that e-commerce companies can do to manage online returns better. Warehouse managers and e-commerce companies can also leverage shipping software like ShipWorks. 

Contact ShipWorks to discover more on how to use shipping technology to help better manage online returns.

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