With the holiday season in full swing, most online retailers are focusing on order fulfillment and shipping, which is no surprise as products fly off distribution center shelves and into gift baskets all over the world. 

Those are critical logistics functions on which to focus, especially considering the results of the 2010 Consumer Shopping Habits Survey by ChannelAdvisor, which found that 58 percent of consumers are very likely to purchase their holiday gifts online, with only 41 percent likely to purchase gifts via brick-and-mortar stores. 

Hopefully those online shoppers have accurately zeroed in on the right gifts for their friends and family this holiday season. But as anyone who’s ever received an ugly holiday sweater can attest, some gifts are destined to be returned before the holiday leftovers even get cold. 

In the midst of the holiday buying frenzy, how much thought has your company given to its return process? Some online retailers may look at the handling and processing of returns as a sore spot because it can involve interactions with unhappy customers and can drive down margins, but as e-commerce continues to increase, a convenient returns policy can actually be a competitive advantage. 

Returns are becoming a natural byproduct of selling via the Internet, given that consumers cannot actually touch or try out products before the purchase. That’s even more true during the holidays, when many consumers are essentially playing a guessing game about what the recipients on their gift-giving lists really want. 

There is value in simplifying the returns process. A Forrester Consulting study commissioned by UPS found that 81 percent of active online buyers are more likely to buy from an online retailer that makes it easier for them to return a product; on the other hand, the study found that 73 percent of respondents are less likely to make a future purchase from an online retailer if the returns process is a hassle. 

Returns have become a reality for many businesses. A convenient returns process can often lead to valuable repeat business. 

Another key attribute of a robust returns strategy is one that streamlines the processes for both online retailers and their customers. To support such a strategy, retailers can benefit from utilizing the returns tools and technologies available from a third-party logistics provider (3PL).

Three components of a returns strategy that can help turn returns into a competitive advantage are convenience, visibility and evaluation.

Convenience – Customers’ lives can be made much easier with a web-based returns process that instantly provides them with a return label via their e-mail or web browser. Once received, customers can print the return label, affix it to their package and drop it off at a drop-off location for delivery. Including a return label within an online package is another option that can simplify the process.

Speaking of drop-off locations, the more the merrier; in fact, UPS recently launched UPS Returns Flexible Access, which provides customers of participating retailers the ability to initiate returns through more than 150 million access points, including any U.S. Postal Service location or personal mailbox, or one of the 4,800 The UPS Store locations in the U.S., Canada and Puerto Rico.

Visibility – Visibility within the returns process can benefit both sides of the transaction. For customers, a smart returns process should allow them to track their return through an online retailer’s website, and through the website of the carrier transporting the package. Keeping customers informed of their shipment status can go a long way toward keeping them satisfied and coming back to shop again.

Keeping customers informed can also reduce call center inquiries, which enables online retailers to devote resources to other critical areas of their business. What’s more, online retailers can integrate e-mail notifications for incoming returns, allowing them to track the return package, improve associated inventory management and schedule labor accordingly to process the returns once they arrive. 

Evaluation – Finally, online retailers should develop procedures to evaluate the benefits of their returns process, such as satisfaction surveys for customers who have made returns. Taking it a step further, tracking whether customers who have returned goods are staying loyal and coming back for repeat business can provide insight into potential improvements to the returns process.

As the holiday season continues, keep in mind that returns are just around the corner. And if you are looking to improve your returns process, consider working with a partner with a vast portfolio of return services and capabilities that can help integrate returns into your logistics processes for maximum efficiency and effectiveness. 

Ramsey Mansour is the director of retail and consumer goods marketing at UPS. Visit http://www.pressroom.ups.com/Media+Kits/Retail for more information about UPS services for online retailers, and visit http://thenewlogistics.ups.com/#/ for a detailed look at UPS’s logistics offerings.