As an eCommerce business, it’s only natural that a customer may want to return a product to you. There are many reasons why a customer returns a product; sometimes it can be avoided, sometimes it can’t.
Returns management is one part of running an eCommerce business that many of us would rather not have to deal with, but in today’s eCommerce landscape, having a good returns policy is key to staying competitive. It’s about providing a good service to your customers, while making sure your reverse logistics is working efficiently.
Today, we break down what the returns management process entails. We’ll take a look at why returns happen, ways of managing returns, how we can mitigate the chances of them happening, and how we can process returns quickly so we can get them back on the shelf.
In this article
What is returns management?
Returns management is an aspect of the supply chain and fulfilment process associated with reverse logistics, or, in other words, the return of goods from the customer to the retailer. Returns management involves the efficient processing of returns, as well as the implementation of strategies to minimise the chance of returns.
The goal of a good returns management strategy is to make the returns process as cost-effective and efficient as possible to the benefit both the businesses and the customer.
Why a good returns management strategy is important
It encourages customers to buy from you
An important part of your returns management process should be your Returns Policy. If your customers see a clear and simple Returns Policy displayed on your website, it breaks down a potential barrier to them making a purchase with you.
A Returns Policy builds trust and credibility, and increases customer satisfaction. There’s a lot to be said about peace of mind, and when a customer knows they can easily return a product to you if it’s not quite right, their chances of converting are much higher.
You’ll provide customers with a better experience
Your returns management process has a big part to play in a customer’s overall experience with your company. Having to wait a long time for a refund or a lack of clarity on whether or not a return has been processed can deter customers from buying from you in the future.
If returns are simple to make and quick to process, you’ll find that your customers will be happier overall. Managing customer return expectations effectively can encourage repeat business.
You’ll be able to filter out returns that should never have happened
Once you’ve defined your Returns Policy, you will be able to identify the returns that are valid and those you cannot accept. For example, you may only accept returns within a certain timeframe, or on the condition that the item has not been used or opened.
If your business offers free returns, it’s not uncommon for customers to take advantage. There’s many instances of eCommerce consumers ‘wardrobing’, which is essentially purchasing a product for a specific event with the intention of returning it afterwards. A robust Returns Policy will help reduce the chance of wardrobing from happening.
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It’s important to find a good balance between offering a returns process that appeals to customers, while being firm on the return requests that fall outside your policy.
You can reduce the number of returns requests
Another hugely important component of your returns management process is prevention. There are many ways to reduce the number of return requests you receive, from helping your customers make informed decisions to ensuring that items are packed properly. We’ll go into more detail later in this article.
You can resell the returned item faster
You don’t want items to be in limbo for too long during the returns process. Not only will it take longer for you to process the correct refund, but each day an item spends off the shelf is another day it can’t be sold to a new customer.
A good returns management strategy allows you to get speed up the returns process, cutting down stress and hassle for all parties involved, and increasing the profitability of your business.
Why do customers return items?
There are many reasons why a customer might want to return a product. Sometimes the fault is with your business, whereas at other times it might be because one of your third-party partners (such as couriers) let you down. And, in many cases, customers simply change their minds, and there’s nothing you can really do about that.
Here are some of the most common reasons a customer might make a return:
- The product wasn’t as advertised
- The product was damaged upon arrival
- The wrong item turned up
- Their order arrived too late
- They found a better deal elsewhere
- They had a bad experience with your company after making their order
- Your customer changed their mind
How to reduce the amount of returns in your business
Comprehensive product pages
If a customer receives a product that was different from what was advertised on your website, it’s only natural that they’d want to return it. Sometimes, customers will order the wrong item, or misread the information provided.
But this isn’t always the case, and a common reason why customers return items is because there wasn’t enough information available to them at checkout, and so the order isn’t what they expected.
Remember that buying products through an online store is a very different experience than going to a brick and mortar store and viewing items physically. It’s important to give your customers all the information they need to make an informed decision. Detailed product information combined with high-resolution photographs is a great way to achieve this.
Download our eCommerce web design whitepaper for some great advice on how to get the most out of your product pages, as well as your eCommerce website as a whole.
Ensure items are packed properly
There’s nothing more frustrating than waiting for an order to arrive, only for it to be damaged or faulty. No reasonable business expects a customer to be satisfied with an item that’s broken before they’ve even got their hands on it, and you’ve little choice other than to accept a return and issue a refund if this happens.
Packaging that looks great is important, but it shouldn’t come at the expense of protection. This is particularly true for fragile or expensive items. Outer packaging should be appropriately studied for the products inside, and resistant to the elements.
Inner packaging should provide adequate padding and eliminate void space as much as possible so items don’t slide around during transit. It’s worth investing a little extra time and money into finding the perfect packaging for your businesses’ needs.
At James and James, we’ll take care of all your packaging so you don’t need to. We’ll only choose packaging that guarantees protection for your items, and we pack all orders protectively to minimise the risk of damages during transit.
Make sure orders are accurate
Similar to our previous point, having the wrong item turn up isn’t a great experience. If you only sell a few types of products, it’s fairly straightforward to ensure that your customers get the right item.
But, as you continue to introduce new products and variations of the same product, and your customer-base gets larger and larger, you might start to find that some customers begin receiving the wrong order. An effective quality control process can help alleviate this issue.
If you’ve reached a point where you are struggling to fulfil orders accurately, outsourcing to a 3PL like James and James could be worth considering. We’re a tech enabled fulfilment provider that ships orders with 99.999% accuracy.
Communicate with your customers
Customers will likely be annoyed if their order takes too long to turn up, especially if it’s after the estimated delivery date. This can often be down to delays on the courier’s side, and in those situations, there isn’t much you can do other than inform your customer that they might be affected.
Communication is key in the returns management process. If you’re expecting certain orders to be delayed, create a banner on your website, and let your customers know while they’re selecting their shipping options. You can also email customers directly if delays are expected to occur after they’ve made their order.
Having a customer service team on board with this can help, but if that’s not possible, there are plenty of tools available to automate much of your eCommerce customer service.
Inform customers of the environmental impact
All the items that get returned each day creates a significant environmental impact. Informing your customers of this might make them think twice about returning an item unless they really need to.
A large share of the eCommerce market is made up of environmentally conscious consumers, so a gentle reminder might result in some of them thinking twice before returning.
Incentivise reviews and encourage feedback
Feedback is important for eCommerce businesses, and often provides a great deal of learning opportunities. Take the time to request feedback from customers who return items, especially if you start to see trends emerging. They may identify areas for you to make improvement, whether that’s on your website or to your fulfilment process.
Similarly, if you can incentivise customers to review the items they buy, you may be able to persuade customers to keep items rather than send them back. There are many ways to incentivise reviews, whether that’s through a loyalty program, exclusive discounts, free items, and so on.
You’ll also enjoy a better public reception with a bounty of good reviews under your belt.
Returns Management in Supply Chain FAQs
Returns management vs reverse logistics
Reverse logistics refers to the stage of the supply chain in which goods are returned from the consumer to the retailer or seller. Returns management is the strategising associated with the optimisation of reverse logistics.
What is the best way to track returns?
Most couriers will provide tracking information for both businesses and customers via a link or tracking code. This is essential for effective returns management.
How do returns affect the supply chain?
Returns can impact the supply chain quite significantly if they become too numerous. The warehouse may become overstocked, resulting in reduced efficiency and increased storage costs.
Returns also increase the environmental impact of the supply chain as a whole, making it less sustainable. There’s also the fuel / labour costs associated with returns that should be considered.
What should companies do with returned items?
In the first instance, returned items should be validated. Then, items should be thoroughly checked to ensure they are in a good enough condition to be resold. Then, they should be placed back into storage and recorded on the inventory management system.
Returns policy vs refund policy
A Returns Policy is the conditions laid out by a company that detail under what circumstances an item can be returned. A Refund Policy will specify when returned items are eligible for a refund, how long the refund will take to be paid, and any other circumstances in which a customer may be eligible for a refund (such as late delivery, broken items, and so on).
Is it legal to not accept returns?
It’s up to the retailer or seller to decide whether or not they will accept returns. The only instance where a return must be accepted by law is if the goods are defective upon receipt, or if any other terms of the contract have been breached.
Need help with your returns management?
If you’re spending too much time on returns management why not let us take care of it for you? James and James are an award-winning fulfilment service, optimised for eCommerce businesses looking to scale.
We store, pick, pack, and ship your products, and when returns do happen, we make sure refunds are promptly given and that your products are back on the shelves to be sold again – fast.
Take the time and effort you’re currently putting into order fulfilment and returns management, and reinvest it into marketing, networking, launching new products, and everything else your business needs to succeed.
Want to learn more? Feel free to get in touch.