Fulfillment logistics is statistically expected to have 10-30% returns of the packages you dispatch everyday, so it becomes a usual and significant challenge that needs to be optimized and decreased in order to keep in balance profitability, inventory and customer satisfaction. So following we’ll be discussing some strategies to handle returns efficiently, making sure to keep losses as low as possible.
1. Be transparent and accessible: when creating a returns policy it is important to make sure that is easily available on either your website or point of sale and point out the rules in a clear and concise language; such as the return window, conditions and any additional costs such as restocking fees. It will avoid any confusions and ensure the customer knows what to expect in said given case. Also, please try to be as honest as possible about the restocking fee as you don’t want to charge too much and make your clientele upset.
What is a restocking fee and when could it be used?
Refers to being partially refunded the amount of the disputed product for various reasons, normally attributed to the conditions in which said item was returned. Normally, it can oscillate between 20% and 100% of the full price of the product; yet 100% is very rare, as it would refer to said merchandise that wasn’t suitable to go back to the shelves and in some cases needed to be disposed of. Also it could be charged due to the fact that it was returned after the established return period, which usually companies like Amazon charges approximately 20%. When it is between the period but has been used or damaged the packaging, it can be charged up to 50% of the total. That’s why it is important to evaluate ethically your labor in the matter, be straightforward and state all your conditions to successfully return the product so that there are no gray areas between your company and its users.
2. Facilitate and automate the return process and logistics for your costumers as much as you can: simplify the return procedure as much as you can by providing pre-paid return labels as well as an easy-to-follow automated software with instructions for packaging, re-shipping, updating inventory, tracking and generating reports on return reasons and decisions.
3. Returns Inspection System: since it’s a recurring issue, there should be a dedicated area set up with a high standard control in your warehouse that inspects promptly and thoroughly any upcoming returns so that reparations, restockings or disposals can be determined by your quality policies as soon as possible. The faster it is either disposed, exchanged or restocked, the better profitability, customer experience and hopefully less returns there will be.
4. Clear communication and good customer support: the quality of your customer service makes a huge difference in the loyalty of your customers; returns can happen for various reasons, not necessarily has to do with the quality of your services, but the way you approach returns and updates regarding them might play a role in your reputation and client’s satisfaction. The better and quicker you keep them informed and solve their returns and issues, the more likely they will further purchase your products in the future.
6. Analyze Return Patterns and Customer Feedback: the great thing about having an automated system that handles returns is the fact that it can gather data to analyze, address and improve common issues that might occur constantly (affecting your reputation and operations) if not approached properly.
7. Streamline Reverse Logistics Strategies: if feasible, consolidate returns by developing a dedicated and optimized procedure to easily ship the returns back to the warehouse and reduce shipping costs in transportation and handling in the process. Try to provide as many as possible easily accessible drop-off points to avoid user complaints.
8. Offer Exchange Options: a way to encourage profitability and client’s gratification through retaining sales could be by offering the opportunity for eligibility to exchange their returning products for similar items. You can even try to incentivize it by providing points on your store, discounts on the new item or free shipping.
9. Educate Customers: Another way to diminish the flow of returns could be to keep your consumers informed with accurate descriptions, size charts, clear instructions (to further avoid confusions, user errors and accidents for customers) and accessible customer reviews to help shoppers inform themselves regarding their decision to convert to your services.
10. Review, Compare and Adapt: regularly comparing, evaluating and modifying your protocols and policies to be up to date with demand and industry best practices helps enhance and upgrade your services as time, practice, feedback and analytics gives you hints and tips on how to refine your operational efficiency.
- You can also hire a third party returns handler: if everything said previously is too much hassle to deal on your own, you’re in luck, because there are entire companies that dedicate dedicate themselves streamlining every detail that we discussed, lifting a weight off of your shoulders by handling returns for you, improving customer satisfaction and reducing costs.. Here are a few trusted providers that can aid you manage returns:
- Loop Returns
Loop Returns specializes in automating returns processes for Shopify brands, offering a user-friendly portal for returns and exchanges. It focuses on helping businesses keep revenue through exchange-first returns, reducing refunds, and increasing customer retention. - Narvar
Narvar is known for creating post-purchase experiences that include smooth returns management. Their platform provides an easy self-service return process, making it simple for customers to return items while providing insights to businesses on return reasons. Narvar also supports eco-friendly return methods, making it a good choice for companies looking to minimize their environmental impact. - Happy Returns
With Happy Returns, businesses can offer in-person drop-off options for returns through a network of “Return Bar” locations. This service eliminates the need for return shipping labels and packaging, making the return process more convenient for customers and reducing costs for businesses. - AfterShip Returns Center
AfterShip provides a customizable returns management system that integrates with major e-commerce platforms like Shopify, WooCommerce, and BigCommerce. It allows businesses to automate return labels, and track the entire return journey, ensuring transparency and improving customer satisfaction. - ReverseLogix
ReverseLogix is a complete returns management system tailored for larger retailers and enterprises. It offers powerful analytics, automated processing, and centralized control of all returns processes. This solution is ideal for businesses that need more robust capabilities for handling high volumes of returns. - Optoro
Optoro focuses on optimizing reverse logistics, helping businesses find the best path for returned goods, whether that means restocking, refurbishing, or reselling through secondary markets. It’s a great choice for companies looking to maximize the recovery value of returned items.
These providers can simplify your returns process, offering solutions that enhance the customer experience and reduce the complexity of reverse logistics. By partnering with a specialized returns management provider, you can focus more on growing your business while keeping returns under control.