Austin, TX – August 11, 2010 – Summer is winding down, and as consumers turn their focus toward back-to-school shopping, retailers are already in the thick of preparing for the holidays. The planning required to support an industry which secures as much as 40 percent of its annual revenues in the fourth quarter is an exhausting process. One particularly daunting task is as inevitable as the holidays themselves -- handling the onslaught of returns that follow as soon as the gifts are unwrapped. 

Returns are a fact of life for retailers. And while they can take action to reduce return volumes or streamline the returns handling process, what can be done to lessen the impact of returns that should never have been received? Fraudulent returns cost everyone money – from retailers to consumers – so striving to limit the impact of these events helps everyone.

Sizing the issue
“Despite the fact that the majority of consumers do the right thing when it comes to returning merchandise, the fact remains that the efforts of a devious few can wreak havoc on the industry,” said Bill Razzouk, president and CEO of Newgistics. According to statistics released by National Retail Federation, $42 billion in merchandise was returned by consumers during the 2009 peak holiday shopping season – of which $2.74 billion was reported as fraudulent. The continued growth of revenue drivers such as e-commerce and mobile commerce, coupled with new tactics from dishonest consumers, means the problem will only grow harder to combat. However, the impact on retailers can be determined by how well they police the issue and manage the expectations of their customers.

Best Practices for Returns Management
“The long-term value of the relationship a merchant builds with a loyal customer is undeniable. These customers often identify very closely on a personal level with the brand and are committed to its success,” said Razzouk. “As you want to ensure the satisfaction of this group while keeping your bottom line in mind, you should invest in their well-being by implementing a friendly and comprehensive – but firm – return policy.” Below are some best practices to consider: 
• Clearly state your return policy. Your policy should be stated in the store and on the receipt - or in the case of an e-commerce/catalog merchant - on the order summary and confirmation.
• Don’t leave an open-ended timeline. Define the period of time for which you will accept a return for refund or store credit and stick to it. With an open timeline, it is sometimes impossible to verify what may or may not have been carried at a given time throughout the year.
• Integrate the returns process across channels. If you allow e-commerce returns to come back to a retail location, can you verify that the item being returned was available for purchase online even though it may not be carried locally? If so, does the consumer have the appropriate documentation to verify the purchase?
• Implement an easy-to-use returns process. Returns management providers like Newgistics make the returns process as easy and seamless as possible for both the retailer and its shoppers. For example, Newgistics allows customers to return products by simply attaching a prepaid label and dropping it off at any USPS location or drop box. Newgistics empowers the retailer and customer with complete visibility and traceability of the return every step of the way – at a lower cost and with better customer service than expedited shipper alternatives.
While all of this seems fairly straightforward, some retailers fear that, by enforcing a strict ‘code of conduct’ for their customers, they will somehow offend the customer or risk customer loyalty. However, customers typically appreciate a well-defined returns policy – and it also reduces the retailer’s risk of returns fraud, ultimately protecting the bottom line. 

Additionally, a common misconception of implementing a comprehensive returns strategy is that it will increase the volume of returns – but the reality is that good customers do not purchase products simply to return them unless they are purchasing multiple items in order to select the item that best meets their need. In such cases, the ability to provide the customer with an easily understood returns policy only improves the customer experience, driving customer loyalty and attracting the attention of consumers that otherwise may not have shopped with a merchant due to an ambiguous return process. 

About Newgistics
Newgistics is leading companies into the new age of retailing by delivering unrivaled small parcel shipping services on time and under budget, all while offering the most comprehensive set of technology-based solutions available in a Postal-based shipping environment. The result is a premium customer shopping experience while lowering costs up to 40%. We know shipping, backward and forward.