It was a great idea. Instead of dealing with the hassle of city traffic and crowds, I decided to flip the power on my computer and let the mouse guide me to an interactive site where there was far more selection than I could have ever found at that store in the mall! So I quickly chose a few shirts and matching pants, clicked on my shopping cart and checked out. Just a few days later, my new wardrobe arrived on my doorstep, but when I tore open those plastic bags, the outfits I had so carefully chosen based on the colorful Web representations, didn�t match. How frustrating! This is a common scenario for millions of e-shoppers. And one that definitely will not go away, especially with the exploding Internet retail industry. In fact, according to research conducted by Forrester Research, Inc., most shippers anticipated online business to grow 750% between the summer of 1999 and 2001. And with industry figures that put returns within the mail order  industry at 25%, this could mean staggering increases in retail returns, many of them being e-returns.
However astounding these numbers, shippers are not blind to their consequences. In the same Forrester Research study, 30% of shippers said accepting online returns would be one of their biggest fulfillment challenges in 2001. With such pressure to meet demands, yet satisfy customer service requirements, many shippers are left to contemplate the future of their operations.
In today�s dot-com world, competition is just a click away and survival is becoming more difficult. By 2001, Forrester Research predicts most dot-com companies will be out of business. That�s why fantastic customer service is an absolute requirement for success. If e-tailers cannot maintain adequate inventory and offer timely shipping and efficient returns service, customers won�t hesitate to shop elsewhere.
Today, e-tailers need a viable merchandise return service convenient for shoppers where there is no need to go to the post office and stand in line. Fortunately, solutions are being created to meet these demands.
In the spring of 1999, the U.S. Postal Service began working to create an electronic merchandise return service that was simple, quick and convenient for shoppers. Launched in September 1999 in time for the holiday season, Electronic Merchandise Return Service (EMRS), a Postal Service Web tool, allows customers to return merchandise by downloading postage-paid labels directly from an e-tailer�s Web site. Customers can then just slap the label on the package and drop it in any one of the Postal Services�  300,000 mailbox or collection boxes. The e-tailer is charged 30� per return plus postage, which is calculated by the Postage Due Unit.
How It Works
The service is very simple to use. E-tailers just register for the return application program interface (API) and the technical user�s guide from the United States Postal Service Web site ( The guide provides easy, step-by-
step instructions for integrating the API onto your site. The tools are written in XML, and free XML sample code is provided for all major Internet operating systems with code for software developers who use ASP, Visual Basic and Perl, minimizing additional investments in hardware and integration costs.
The Postal Service�s Internet Customer Care Center is available toll free from 7 AM to 11 PM (EST) for e-tailers who have questions while installing the APIs. Besides integrating the APIs, you will need to obtain a merchandise return permit from your local post office, which costs $100.
E-tailers have the opportunity to personalize their labels with their corporate signatures and something such as a company logo. The Postal Service has left a convenient location in the middle of the label where the e-tailer can open the TIFF or PDF graphic label file, transmitted by the Postal Service, and drop in its company name or logo.
After the API has been integrated into your Web site, customers can visit the site and provide information needed to process the return. The necessary information, such as service desired, sender�s address, destination address and merchandise return permit number, is then forwarded to the Postal Service in real time where the information provided is populated on the label and then returned in fractions of a second, making the label available for printing  24 hours a day. The customer then places the label on the package and drops it off in a mailbox or the nearest collection box or he can give it to a postal carrier. It doesn�t get much easier.
Mailers can choose any of the following mail classes for their returns: First Class, Priority or Standard B, which includes Parcel Post, Special Standard, Bound Printed Matter and Library Rates.
Many Value-added Features
In addition, the program allows e-tailers to direct returns to multiply return locations. Instead of sending all products to one facility where they may have to be reshipped to another facility, customers can be directed to send defective products to one location and returns to another, minimizing delays in restocking return merchandise. To further improve return efficiency, shippers can include their own Return Materials Authorization number on this label.
Since its launch last year, the Postal Service has worked to improve the service based on the demands of e-tailers. The Postal Service is presently beta testing Delivery Confirmation with the service and is looking for additional test participants. 
For high-value items, e-tailers can request insurance on their  packages right from their computers. When the label is printed out, instructions on the label will direct the customer to go to his local post office to make sure an insurance label and number are placed on the package. The e-tailer can cover the cost of the insurance through its postage due account. Or for those customers who don�t need to insure their orders, they can still receive verification their returns have been mailed. A USPS Mailing Acknowledgement form is attached to the bottom of the merchandise return label. It will have a number unique to the customer order provided by the e-tailer. The customer will take the return item to the post office where a clerk will date it and initial it, verifying the package�s introduction into the mail stream, and the customer will receive a receipt of the transaction. With all the above features available, there are well over 50 different mailing label combinations possible for those e-tailers with special needs and those who manage a variety of merchandise lines.
Electronic Merchandise Return will be an extremely important value-added service for large-volume companies who are looking for market growth opportunities. However, the service may not be feasible for smaller companies who cannot afford to pay the return shipping cost or do not see the benefit in doing so. For these companies and those that do not want to pay the return postage, the Postal Service offers an additional option, Courtesy Reply Label. This additional Web tool allows e-shoppers to download a label with their return addresses, the correct delivery addresses and, if desired, a Return Materials Authorization number. In this manner, the e-tailers know the customer has the correct address and the return delivery will not be delayed due to spelling errors or a miscommunication on the return address.    
The Following Grows
Dozens of e-tailers are already using the service and thousands of their customers are now requesting it. Tim Shannon, director of Operations for Altrec was the first to test the service. Customer service and its relationship with customers is the number one priority for the e-tailer of outdoor gear. So for Shannon, the decision to try the program was not difficult. Altrec was already providing customers with either pre-paid postage vouchers or United Parcel Service (UPS) call tags to cover the shipping cost of returns. In the fall of 1999, Altrec approached UPS about an electronic returns service, �But they couldn�t move at the speed we wanted,� notes Shannon, who then discovered the Postal Service was preparing to roll out a similar program.
Despite the fact Altrec was the first to test the service, it took just six weeks to get the program up and running smoothly, just in time for the 1999 holiday season. Altrec was able to dedicate two members of its IT department to the effort which also included members of the USPS IT staff, who according to Shannon, were �exceptionally responsive.� Shannonadds that the Postal Service API was fairly robust and implementation occurred quicker than anticipated.
While Altrec�s returns rate of 7% is far below the average for e-tailers, in the past, returns processing still required a fair amount of time, labor and costs. But now the electronic returns service allows for many time-saving features. Altrec is able to get a complete manifest of all in-bound returns. It knows exactly what to expect when, allowing the company to prepare in advance for daily demands. In addition, customers input much of the needed information on the Web site, saving shipping personnel time.
About 99% of Altrec�s customers use the Electronic Merchandise Return Service when sending orders back to the company. And the results have been great, according to Shannon, who says the service has made the company more customer-centric and the shipping department much more efficient. Customers can now self direct their returns without resistance. �Customers think they have to fight a battle to return products,� so this is a welcome surprise for customers, according to Shannon.
Calls into customer service regarding returns have been nearly eliminated. In fact, now, when customer service gets inquiries, it�s often customers calling because they can�t believe the returns process is so simple and easy. With dramatic decreases in call volumes, Altrec has been able to redirect the work of its customer service personnel. �Instead of reacting to clients, our company has become proactive,� comments Shannon. The customer service department has developed a number of initiatives with its new-found time. Hand-written thank-you notes are now sent to select clients and surveys are distributed regarding the customer�s shopping experience and satisfaction, in addition to other out-reach programs.
�The Postal Service has demonstrated that it can be innovative and forward-looking,� comments Shannon. �Anyone who is not using this service is missing out on one of the more innovative tools to battle the returns issue.�
It�s quite evident the U.S. Postal Service is making a statement in the parcel shipping industry as it works to become the shipper of choice. By providing easy-to-use, efficient and cost-effective tools, the Postal Service offers shippers tools to grow their businesses and improve the quality of service for their customers.
Stuart Willoughby is the program manager for the U.S. Postal Service�s Internet Shipping Web Tools and Karen Tucker is a marketing specialist with the U.S. Postal Service, Expedited/Package Services Group. For more information on Electronic Merchandise Return Service, please visit