E-commerce Returns Management Processes

E-commerce Returns Management will be described in this article. Online retailers put their products to the test during the holidays. You must be ready to manage the significant increase in the number of orders. There is always a need to stack inventories. Ensuring a seamless customer experience is crucial. However, it isn’t the case. Returns are increasing in tandem with the volume of orders.

E-commerce Returns Management Processes And Best Practices

In this article, you can know about E-commerce Returns Management here are the details below;

The causes of e-commerce returns are numerous and include defective merchandise, incorrect merchandise, and sizing concerns. Indeed, the total value of returns from e-commerce reached $37 billion in 2018. And as each year goes by, this figure simply rises.

However, handling returns is not at all simple. Each return order should be handled promptly, with the customer receiving either a refund or an exchange, all the while making sure that the most value is retained for these products.

In order to help your company maximise the value from returns, we have provided a comprehensive guide to e-commerce returns management.

what are e-commerce returns?

Items that clients return after making an online purchase are known as e-commerce returns. There are various reasons why customers return something. It can be the case that there is a flaw, the size is incorrect, or the buyer just doesn’t like it.

It’s critical for brands to handle these returns effectively. It goes beyond simply returning a product. It also involves keeping a positive rapport with the client. A simple return procedure can entice them to make additional purchases from you.

what is e-commerce returns management?

Businesses handle returns and exchanges from clients through an online system called e-commerce returns management. It’s a strategy for effectively and seamlessly managing these returns.

Let’s dissect the procedure in detail:

  1. Product returned by the customer: Let’s say an online buyer chooses to return a purchase after it is delivered. The process of managing returns in e-commerce starts here. At this point, it’s critical to make sure the return process is simple and, ideally, door pickup.
  2. Product inspection by the business: It’s critical that the business performs a comprehensive inspection of the returned item. To make sure the product is in its original condition and satisfies the requirements of the return policy, this step is essential. During the examination, it may be necessary to look for any damage, confirm that it is the right item, and make sure it hasn’t been misused or altered.
  3. Offer of a refund or exchange: The company moves on to the next round as soon as the returned product passes inspection. The company gives a refund or an exchange, depending on the customer’s request and corporate policy. While an exchange might entail delivering the consumer a replacement, a refund might be handled back to the original payment method.
  4. Communication with the client: It’s critical to keep lines of communication open and transparent with the client throughout this process. This entails keeping the consumer informed about the status of their refund or exchange, updating them upon receipt of the returned item, and alerting them of the inspection results. Providing customers with frequent updates helps foster trust and reassure them that their return is being handled effectively.

Use Gmail to handle e-commerce returns.

Challenges in e-commerce returns

The operations and customer relations of a business may be impacted by the particular difficulties that come with e-commerce returns. The following are some of the difficulties you may encounter:

1. High costs

The costs associated with managing returns in e-commerce can have a big effect on a company’s bottom line.

For example, a company that sells home d├ęcor goods may have to pay hefty return shipping costs, particularly for large products that clients return because the product’s design doesn’t go with their interior decor.

Solution: By providing discounts, companies can encourage exchanges rather than returns in order to control excessive return costs. This method reduces shipping costs because swaps often only need one round of shipment as opposed to two. On the other hand, there are two delivery cycles when a client returns a product and then buys a new one, which raises the cost.

2. Logistical Hurdles

Resources may be strained during the management of the reverse flow of goods process, which calls for close coordination.

For instance, an electronics manufacturer may receive returns from different parts of the world, which makes the process of gathering, classifying, and redistributing goods difficult and time-consuming.

One potential solution to expedite this process would be to establish return centres or hubs in different regions. With this strategy, a company handles returns through a number of centres dispersed throughout several locations rather than sending all returns to a single, central site. This guarantees that goods are examined promptly, reconditioned if needed, and ready for distribution or resale. Additionally, this reduces logistical challenges and downtime.

3. Fraudulent Returns

Returns fraud can cause a large reduction in revenue and can take many different forms, from benign to highly organised criminal activity.

Customers purchasing products, utilising them for a specified purpose, and then returning them for a complete refund are examples of return fraud.

Solution: Companies should implement explicit return guidelines, maybe in conjunction with an electronic verification system that monitors product quality or usage. This could be useful in spotting and stopping fraudulent return practices.

4. Customer Expectations

Meeting and surpassing consumer expectations about returns is essential for fostering loyalty and repeat business in the cutthroat world of e-commerce.

For instance, if a consumer must wait a lengthy time for their return to be acknowledged and handled, they may grow irate.

Solution: Customers can feel confident that their demands are being met quickly because the return acknowledgment procedure is automated and timely updates are provided at each stage.

5. Environment Impact

For companies who are dedicated to sustainability, controlling the environmental impact of the returns process is crucial.

For example, a company that sells electronics can have trouble recycling or properly disposing of items that can’t be sold again.

Solution: Forming alliances with recycling companies can be beneficial. It can guarantee that non-resaleable products are disposed of ecologically responsible ways, minimising waste in landfills and possibly recovering valuable materials.

6.Impact on Profitability

A large number of returns can have a negative direct impact on a company’s profitability.

For instance, significant quantities of seasonal goods, such as holiday decorations, may be returned after the season, frequently too late to be resold in the same year.

Solution: Maintaining profitability might be aided by providing shop credit rather than refunds for certain items. Most likely, credit will be used within the same company, possibly for products with higher profit margins or lower return rates.

How to reduse e-commerce returns?

For any online retailer, lowering e-commerce returns is a vital objective. Saving money, preserving profit margins, and guaranteeing customer happiness are all possible with efficient e-commerce returns management. Also check Invoice Approval Software

Here are some methods to make this happen:

  • Precise Product Descriptions: Uncertainties are avoided with precise, in-depth product descriptions. Giving clients access to accurate measurements, material descriptions, and high-quality photographs, for instance, can assist them in making well-informed selections and lower the possibility of returns resulting from unfulfilled expectations.
  • Size Charts and Resources: Returns for size mismatches are frequent, particularly with apparel. Businesses can use interactive virtual fitting tools to assist customers in selecting the ideal fit at the time of purchase.
  • Customer Reviews: Presenting and encouraging customer reviews can help prospective customers make better decisions by providing real-world information about the product’s quality and fit.
  • Quality Control: Thorough quality inspections prior to shipment can guarantee that each item complies with the company’s requirements, minimising returns for flaws or damage.
  • Flexible swap Policies: Providing a simple swap rather than a refund may be more enticing. For example, allowing a simple exchange for the correct size in the event that a consumer orders a garment in the incorrect size can save a whole refund.
  • Feedback Loops: You can find trends and opportunities for improvement in your products and internal procedures by putting in place a mechanism to gather input from customers about the reasons they return items. For example, a company discovers that a certain model of wireless headphones has a high rate of returns. Consumer complaints indicate that users have expressed pain when donning the headphones. This knowledge can be used to investigate matters such as clamping force or ear pad material. As a result, the business can improve the product design. In this manner, the company may address the underlying reason for returns.
  • Excellent Customer Service: Solving problems before they lead to returns is possible when you respond to customers’ questions in a timely and kind manner. As an illustration, suppose a buyer is browsing your website’s shoe section but is unclear about the purchasing process. If your website has live chat, it will be incredibly simple for customers to ask inquiries and instantly get in contact with a support representative. The likelihood that a buyer will return a goods can be reduced when they are clear about what to buy.

E-commerce returns management best practices

Even though it’s important for businesses to minimise e-commerce returns, returns can occasionally occur. You should therefore be knowledgeable on the best ways to deal with them effectively.

These are the main best practices that can make the procedure of returns smooth and easy. They will also strengthen brand loyalty and improve the client experience.

1. Have a customer-friendly returns policy

Today’s consumers make very knowledgeable choices. Before making a purchase, a brand’s return policy is the most important consideration for them.

In actuality, it conveys to the consumer their level of trustworthiness regarding your brand.

Thus, how can one design a return policy that does not alienate clients? Here’s a quick tip to remember: make it simple to locate, read, and comprehend.

Make sure that your return policy is clearly visible on your website so that clients can readily find it. A few options are as follows:

  • Make sure that every product listing page has the return policy mentioned.
  • Make a single, comprehensive page about returns.
  • Attach links to your return policy to emails that provide status updates and order confirmations.

For instance, each product listing on Zappos includes a link to their returns website.

E-commerce: Management of Returns

Zappos uses easily accessible links to its returns page to make returns simple.

It’s crucial to have a returns policy that explains expectations in as much detail as possible while still making a statement. Here is where a lot of internet businesses go wrong: they either create policies that are unclear or don’t give customers adequate information. Verify that the following is covered under the terms of your policy:

  • The deadline for submitting a return application
  • Requirements that must be fulfilled in order to validate a return
  • When may the client expect a response from you?
  • When would the reimbursement be processed?
  • Prompted arrival time, in the event that a product needs to be exchanged

2. Make returns easy

Do customers find it simple to submit a return application? Only 53% of consumers are happy with how simple it is to return items to a website they purchased from, according to UPS.

Customers are frequently required to complete unnecessary paperwork, arrange for their own courier service, and in certain situations, even pay for shipment.

All of this lessens the possibility that the client will make another purchase from you. How therefore can you streamline your return procedure? Here are some actions you may take:

  • Give consumers the option to start a return through your mobile app or website. Make sure your portal can manage the spike in requests by doing load tests prior to the start of the holiday season.
  • Assume responsibility for retrieving the merchandise from the client. Partner with a third-party vendor for door-step pickup if you’re short on staff.
  • Request a convenient time from the customer to pick up returns. For professionals who work throughout the day, it is crucial to arrange for a pickup outside of regular business hours.
  • Products that are being returned must be carefully wrapped before being sent to the warehouse. During pickup, avoid asking the consumer for the packaging. Equip your local squads to complete this instead.
  • Inform the client on the progress of return orders (more on this later).

For example, the return policy on this website that sells Lockout Tagout Tags is really straightforward. Order replacement inquiries can be promptly addressed by consumers by forwarding order details to their designated email address. Reducing the amount of steps a consumer must do to begin a return order is the aim.

3. Have the right automations place

These days, automations are widely used in logistics. They significantly reduce manual labour and expedite procedures.

The good news is that they can expedite the return process as well. Having the appropriate automations can be a game-changer for your warehouse personnel, even with the exceptions that inevitably arise when managing returns.

Real-time inventory management: Your warehouse teams can make informed decisions about where to store returned goods, whether to process an exchange, and when to proactively contact vendors about refilling stock when a product is seeing a high return rate, for example, by keeping track of inventory levels in real-time. Real-time counter LED displays could be installed in warehouses. Wearables that monitor stock levels throughout warehouses are another option.

Emails providing status updates: I’m sure you already inform customers about returns. After processing returns and mailing the replacement item or providing a refund, the majority of online sellers send out updates. However, how are delays communicated? Remember that there are times when delays occur for causes beyond your control. It’s best to let customers know about it at all times. You can accomplish this by setting up a trigger that will activate when a return order isn’t filled within ‘X’ days. Send a consumer an email or SMS explaining the delay. Based on the potential causes of the delay, create different versions of the status update email and send them out in response.

Easy return shipping: Returned items must be shipped according to their condition. Broken ones must be restored. A portion must be returned to the seller. Others to discard. Conveyor systems for sorting are a wonderful way to move returns quickly through the sorting process. Before the holidays, perform a load test if you already have these set up. Furthermore, Automated Guided Vehicles can be useful for swiftly transporting goods between levels of warehouses and distribution centres.

Credit: Sending order IDs and receipts to the finance department is typically the first step in the reimbursement procedure. There’s a good probability that some of these receipts may be overlooked as the number of returns increases. Rather, have the warehouse’s receiving team verify the returned item and initiate an online refund request that is forwarded to the finance department automatically. If the finance staff has a specific group email address for handling refund claims, that can also be helpful in this situation.

Suggested reading: Handling Automation in E-Commerce

4. Equip your receiving team with the right instructions

Accurately identifying and classifying the returned goods is a critical first step in the return management process. Without a question, this is a labor-intensive activity. However, there are a few steps you may take to effectively sort returns.

Set up a specific area in your warehouse to examine each and every returned item. Give your receiving crew the task of carefully examining every product to ensure that it matches the original item. In addition, they will need to evaluate the sender’s name, the quantity of products received, and the item’s quality.

Here, using return labels can save a tonne of time. All it takes is a quick scan of the label’s unique ID to determine whether the returned item is identical to the one that was originally purchased.

Managing the exceptions presents the most challenge in this situation. Certain things may be lost during shipping, some may be damaged during unloading, and some may differ greatly from what the buyer initially requested. These are but a handful of examples.

  • Make a list of unforeseen circumstances for managing returns.
  • Make thorough procedures for every one of these situations.
  • Make sure these processes are scalable in case the number of return orders rises over the Christmas season.
  • Make sure that each staff handling returns is aware of these processes and understands their responsibilities.
  • Before using these routines for real returns, test them.

Developing these routines will primarily benefit your receiving team by removing the need for them to wait for instructions in the event of an issue.

5. Seamless internal collaboration is a must-have

In the case of processing returns, time is critical. Why?

A returned product’s worth decreases with the length of time it is kept in the warehouse. This gets us to the point that, in order to swiftly remove returns from the chain, smooth internal coordination is required. However, it is rare for a single team to handle returns end-to-end. Also check Google Optimize Alternatives

For updates on order status, the support team must coordinate with the warehouse crew because customers will probably follow up via texts, calls, and emails.

When a consumer requests a refund, the logistics team and the financial team must collaborate to process the credit issue.

In order to return damaged items to the vendor’s location, the receiving team must arrange with the vendors. If not, they must get in touch with the relevant warehouse staff to arrange for a customer exchange if the goods is unopened.

These many channels of communication must all function smoothly and concurrently. Writing emails to various teams, sharing order receipts, utilising Ccs to include coworkers, and other methods are standard ways to accomplish this. But when the number of return orders spikes, this strategy may become too much to handle. Crucial details are frequently overlooked.

This is where Hiver, a solution that enables teams to expedite internal collaboration without increasing email volume, can be useful.

6. Recovering the highest value from returned goods

On the one hand, keeping customers happy and loyal requires prompt handling of returns. However, in order to minimise your losses, it’s critical that you get the most money possible out of the returned items.

Make sure your workflows direct returned goods into the path with the highest selling price after they have been separated.

  • You can stock up on unopened boxes and resell them on your online store.
  • Products that have been opened but are still essentially “new” can be sent to a nearby physical store.
  • Before restocking the items from your warehouse, you may want to return any damaged or defective items to the vendor for repair.
  • You can sell the objects as scrap material and still get money, even if they are worthless.

Assume all returned goods as assets, and make sure a procedure is in place to extract as much value as possible from them.

7. Assessing the financial impact of returns

Regardless of how simple it is for customers to request returns, handling the return chain is costly and difficult.

So, how can it be made more affordable?

You must understand the financial effect returns have on your company in order to do that.

Cerasis suggests using a straightforward formula to figure out how much return management costs.

Processing Costs: As the name implies, these are the expenses incurred during the handling and processing of the returns. For example, from the time the client requests a return through the RMA (return material authorization), the receipts must be sent to the warehouse, together with any associated repair costs for the returned item.

Logistics costs: All expenses related to returning items for transportation. This covers returning things to the warehouse, sending returns there, and returning any replacement items to the client. It also covers returning returns to the departure point.

Cost of Credits/Replacements: Obtaining an exchange or credit is the primary goal of returning an item.

Asset Depreciation: Every returned item, including unsealed boxes and scrap, has a monetary worth. Their value depreciation increases with the length of time they are stored. When determining the overall costs of reverse logistics, this depreciation must be taken into account.

Online retailers would have a clear image of which component of the return process can be optimised to save costs if the individual costs were determined.

8. Listening to your customers

The best approach to maximise and develop is through feedback. This also applies to how returns are handled. Find out what feedback your customers have regarding your return policy. Do they find it difficult to submit a return application? Do they find it frustrating that it takes so long to get an exchange? Do they need to contact your support staff for updates on a regular basis?

Inquire, evaluate, and advance. Since 95% of internet shoppers will make additional purchases from a seller who offers a positive return/exchange experience.

Don’t overwhelm the buyer with questions, but don’t ask too many either. Make your return experience survey brief and easy to understand. These are a few possible questions to ask.

  • Why did you decide to come back?
  • Was the exchange item shipped in a pristine condition?
  • Did the support staff answer your questions promptly?
  • Was it easy for you to follow the shipment?

Remember to use a variety of touchpoints to connect with your customers. Send an in-app survey if you have a mobile app. If not, you can send them the link via email or SMS. But make every effort to stay away from paper forms.

Aligning the return experience with evolving customer expectations can be achieved most easily and effectively by including the Voice of the Customer. Remember to include a QR Code (created with a QR code maker) so that clients may easily submit comments.

Finals words

In summary, effective return management mostly involves optimising personnel and workflows. Make sure your staff is prepared to manage the volume of goods arriving, and develop procedures that will save you time when removing these things from the return chain. Purchasing a powerful help desk software can also help your brand’s returns management procedure run more smoothly.

You can keep track of all your customer information, including previous exchanges and purchases, with the use of a centralised service desk. You’ll be able to keep track of the reviews left by customers for each purchase and return encounter. This will enable you to consistently provide superior customer service, which will eventually result in a positive client experience.

You may wish to give Hiver some thought if you’re searching for a help desk solution of this kind. Hiver gives you central access to your Gmail inbox’s customer information and inquiries. In this manner, your customer-facing support representatives can engage in contextual dialogue with them, facilitating quicker issue resolution.