With lockdowns, shuttered stores, and health concerns, shoppers turned on their computers and to online shopping as their new go-to for everything they needed, from clothing and makeup to household cleaning supplies. As online sales increased, so did returns. A recent report shows that for every $1 billion in sales, retailers incur about $106 million in merchandise returns – making it very costly to a company’s bottom line.
Online returns are big business with 30 percent of online purchases returned, compared to just under 9 percent from brick-and-mortar stores. The National Retail Federation reports in 2020, “approximately $102 billion of merchandise purchased online was returned, with $7.7 billion (7.5 percent) labeled as fraudulent." Online business retailers must both safeguard themselves from the revenue loss that inevitably comes with processing returns, and create a positive customer experience.
So, what’s the solution to this expensive problem? The integration of a returns management system (RMS) platform into a company’s daily business operations. This type of solution streamlines returns processing, accelerates credit speed, reduces revenue loss, and improves customer service. RMS platforms offer businesses stability and control when dealing with the logistics of returns management, and the potential revenue loss from fraudulent returns.
End-to-end RMS solutions can help with returns management for various businesses, including B2B or B2C retailers, e-commerce, manufacturers, and 3PLs. Solutions will reduce the need for outdated, manual returns processes and, as a result, increase profit margins.
Returns Initiation
The “post-purchase” experience happens immediately after a product is bought.
An RMS platform’s goal should be to make the return experience for the consumer as seamless and convenient as it was when they purchased the product. The process should also provide the retailer or e-commerce brand with visibility into why the product was returned. Global e-commerce companies can leverage the data to determine if the cost of the product being returned is less than the cost to have it shipped back to the company. Of course, it’s especially critical for customers to have visibility and receive updates on the status of their return to fulfill the brand promise and deliver on a long-term relationship. It sends the wrong message if customers have to keep submitting queries to customer service teams.
Returns Processing
When an item is shipped back to a company, it must be received somewhere, so RMS solutions can determine which location is the best for the return based on the customer’s current location. This is determined through proximity or specific sites that have inventory fulfillment needs.
Additionally, an RMS platform can help determine if repairs are needed for resale through an inspection and product grading process. It is possible that some items will require the work of more than one department or repair management employee, so it’s essential that the RMS be able to track it at every step.
Automated communications at regular intervals are also helpful so customers can see that their return is being adressed, and understand when they can expect a resolution. In the absence of this information customer service lines, chats, and emails are likely to be inundated with inquiries requesting status updates – creating a frustrating extra step for customers and more expense for the company.
Creating an Efficient Returns Management Process
To help eliminate waste, companies can use a single, purpose-built platform to automate validations when processing returns, performing repairs and refurbishments, and finalizing returns. A robust solution can streamline this process.
A recent survey found that while returns rates to stores are 8%, this rate jumps to 25% for online purchases. Additionally, 57% of retailers reported that having to process returns consistently hurts their daily business operations. This is evidence of the immediate need to provide the consumer with a lasting, positive impression of the company and its products.
Integrating an end-to-end returns management solution into the supply chain can help companies increase their bottom line, enhance customer service protocols, and reduce lost revenue due to costly returns. An RMS platform can work in synchronization with logistics professionals and returns processing teams to provide the real-time business intelligence needed to manage the onslaught of returns inherent to e-commerce and its mass adoption.
Gaurav Saran is CEO of ReverseLogix, the only provider of end-to-end, centralized and fully integrated returns management systems built for retail, ecommerce, manufacturing and 3PL organizations. Prior to founding ReverseLogix, Saran led enterprise sales for Fortune 500 companies at Microsoft. He has held leadership positions at numerous start-up organizations, successfully transforming them from early stages to established growth companies. For more information, visit https://www.reverselogix.com/
