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Complete Guide to Managing eCommerce Returns

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Each year, customers return a massive chunk of orders placed online which cuts down the profits of a business. This happens because companies need to account for the storage space and disposal of returned products, cater to the cost of the return shipment, and bear negative reviews and the loss of customers. Returns are an inevitable part of a growing business, so it is important to bear in mind that the customer’s doorstep could just be a stop on the way back.

What’s more important is to know that managing returns the right way can save you from cutting down on your profitability. Returns can be seen as an opportunity to learn from past mistakes and customer feedback and improve your future performance. Research has proven that customers tend to make more purchases over time if their experience of a return process was positive and easy with a business. Therefore, the focus should be redirected to creating a customer-friendly return policy and an efficient and accurate returns management process.

What is an eCommerce Returns Management Process?

A returns management process is the reimbursement of returned products with a full refund or an equal exchange and handling of those products. Returns impact business profitability, storage space, and inventory management and need proper management to save the business from loss of customers.

What is a Standard eCommerce Return Policy?

There isn’t a standard return policy to fit every business, as each business needs to tailor its policy depending on the industry, their product offering, logistics capabilities, and customer expectations. However, a basic template of a three-step process can work for most businesses with alterations made to meet the unique needs of your customers.

Step 1: A Customer Initiates a Return

The returns process starts with a customer providing context as to why they are returning a product. During this time, a business can get valuable customer feedback to prevent this in the future. Based on your returns policy, you may offer the customer store credit, product replacement, or a full refund. Once all this is done the customer will pack and ship the product back to you.

Step 2: The Returned Product is Received

The customer ships the product to a predetermined location, and you decide how to handle the product. You may restock, repair, recycle it, or even donate it.

Step 3: The Return is Processed

Whatever reimbursement your customer qualified for, be it a full refund or an exchange, make sure to act quickly and win back their trust by providing a hassle-free returns experience.

How to Cover the Cost of Managing Returns

Treating returns as a learning opportunity and a way to gain genuine customer feedback to improve their purchasing experience is your first step towards the right direction. By improving your returns process, you can enhance your brand experience and the loyalty of your customers. Here is how you can achieve that.

Train your Team

Train those employees who are directly involved in processing returns and find ways for them to make the returns process more efficient, such as enhancing the packaging quality and performing quality assurance on all products.

Improve Customer Support

Train your customer support staff to hear out an unsatisfied customer and make sure they don’t hang up before their concern has been addressed and sorted. Make up for any mistakes on your part by offering incentives that fit their situation by using store credits or product replacements at no additional cost.

Optimize Inventory Management

Optimizing your inventory management is crucial to saving your business from financial loss. Re-sellable returns must be immediately marked as ‘in stock’ items and inventory must be managed and updated in real-time.

What are the Tried Ways to Reduce Returns?

Now that we have established the importance of a good returns policy for increasing sales and profits and building brand image and customer loyalty, let’s take a look at some tried ways to reduce overall returns volume.

Offering Detailed Product Descriptions

The biggest fear customers have while shopping online is the difference they might notice in what they receive versus what they see online. Offering apt and reliable product descriptions with high-quality and accurate product images can better inform customers about what to expect and reduce the return volume.

Frequent Product Testing

Frequently assessing the quality of your products from a customer’s perspective and sharing your feedback with the manufacturer after product testing can lead to lesser flaws and ultimately lesser returns.

Identifying Trends

Record data and look for trends to learn about what ticks your customer. This will help you make the necessary changes and better meet their expectations.

What are the Risks of Not Offering a Return Policy?

Most online customers check the returns policy before placing an order. By not offering one, you may risk losing potential customers, especially first-timers. However, depending on the industry and your product offerings, your business may or may not be at high risk. For instance, if shipping back your product costs more than buying it, there is a far lesser chance of returns.

At ShipBots, you can easily manage your eCommerce returns through our state-of-the-art warehouse and inventory management system. No eCommerce business can eliminate the returns completely, however through optimizing your return management process you can still win the hearts of your customers.