Recouping Costs with an Efficient Returns Process

If there is one key idea that retailers need to keep in mind in the days after a holiday, it is that returns are a huge part of customer satisfaction. But consumer-friendly return policies can be a nightmare for your logistics operations.

There are many reasons an item might be returned, even if it’s not defective (wrong size, recipient already has one or wants something else, etc.). Research shows that customers are taking the returning experience into account when choosing both a brand and the channels through which they buy—which means that convenient, no-hassle returns are yet another weapon in the war against the competition. Businesses must be prepared for them.

All the more reason to check out this article from the Multichannel Merchant blog, “8 Ways to Lessen the Profit Impact of Ecommerce Returns.” As the article states, one cannot eliminate returns totally; but there are many tactics for reducing both the number of returns and their overall cost to the organization: Purchasing based on net rather than gross demand, reserving warehouse space for returns, and so on.

The most important finding is that returns cost much more to process than orders themselves. Thus, there are many opportunities to recoup costs from the returns process, especially where warehousing and logistics are concerned. Not taking returns into account when setting up a warehouse, for example, can become a costly mistake down the line. Returns need to be processed efficiently—not just from the customer’s perspective, but from operations and cost perspectives as well.

More details can be found in the article itself. In the meantime, we were wondering what challenges our readers face with the returns process. Do you have a plan in place for optimizing returns, or is your organization more reactive, taking on returns as they come?