Returns have traditionally been a challenge for all types of businesses, from brick and mortar retailers and online brands to manufacturers that may drop-ship merchandise on behalf of a retail partner. Whether you’re looking to improve overall efficiency or customer service, lower operational costs – or all of the above – you must evaluate your return policies and processes and ensure that they serve to:

• Improve inventory controls;
• Streamline asset utilization relative to real estate and equipment;
• and increase consumer satisfaction to enhance lifetime customer value. 

This article addresses the challenges that face merchants looking to implement such processes, and best practices that can make a better returns experience a reality.

1. Clearly Define Your Policy
Your return policy should be well-defined and easy for your customers to understand. While this area of the supply chain has historically been viewed as a nuisance, it is really an opportunity to improve business operations and enhance service for your customers and internal departments. By implementing a comprehensive, customer-friendly returns strategy, you are not (contrary to some outdated beliefs) driving return rates higher, but instead acknowledging to your customers that their business is important. By simplifying returns, your company says, in effect: “We’re disappointed that the shopping experience didn’t meet your expectations, but we are committed to your total satisfaction and are willing to go the extra mile to earn your business in the years to come.” A well-designed returns program is far more than an operational investment – it’s an investment in your customers and your brand.

2. Understand the Challenges with Multichannel
Does your business operate in multiple sales or distribution channels? Then you must consider the unique challenges multichannel operations present. For example, for traditional cataloguers that have embraced e-Commerce, their business only improves by successfully handling sales in both the catalog and e-tail environments. Thus, especially for this group, the implementation of a consistent, well-defined return policy may be more important than it is in traditional brick and mortar environments. 

However, brick and mortar – whether operating as a standalone business or as a component of a multichannel strategy – presents its own unique challenges. If a retail store acts as a drop point for consumers making returns for products purchased online, they can face complex inventory issues, coupled with potentially disconnected technology systems between the brick and mortar, e-Commerce and catalog channels – often resulting in increased expenses and a negative impact on the customer experience. 

When working in a multichannel environment, integrated systems, along with a clear program to ensure effective inventory management within the store, are essential in managing the increasingly higher expectations of today’s consumers. 

3. Leverage Technology for the Most Seamless, Efficient Returns
When it comes to implementing a seamless returns program, merchants should not underestimate the importance of the technology component, regardless of the channel in which the merchandise is sold or returned. In the direct channel, decisions about what type of policy or system to implement are often left to operations and transportation to manage. While these groups play a vital role in managing returns and thus selecting the systems to manage them, other areas such as finance, customer service, marketing, and information technology also play just as critical a role in the process of evaluating various solutions and returns policies, if not more so. 

When assessing returns vendors, some merchants make the mistake of looking to the company that offers the cheapest rate for the sake of saving a nickel or dime here and there, failing to see the big picture. It is important to remember that a return may be a direct result of a customer’s dissatisfaction with a particular aspect of the shopping experience. If not properly managed, the impact of a poorly structured return policy can have a devastating impact on a customer’s commitment to your brand, impacting revenues and net income, so it’s important to look at how technology can simplify the returns process, improve the customer experience, and ultimately build sustainable loyalty. 

Kevin Brown is the Director of Marketing for Newgistics. Newgistics is leading companies into the new age of retailing by delivering unrivaled small parcel delivery and returns services on time and under budget, all while offering the most comprehensive set of technology solutions available in a Postal-based shipping environment. The result is a premium customer shopping experience while lowering costs up to 40 percent. Visit for more information, and be sure to follow Newgistics’ blog, The Gist (, and on Twitter (