The challenge of returns is a constant one. In this 
piece, Mike Cockfield, managing director and founder at Khaos Control, explains how retailers can best manage returns, or better still, prevent them.
With the National Retail Federation announcing that 15-30% of purchases in 2018 will be returned, an effective returns policy is more important than ever. But with retailers such as Amazon recently banning customers from using the site, due to returning too many items, yet retailers like ASOS priding themselves on offering free returns to all their customers. It can be confusing for retailers.
The good news is that there are a lot of little things that retailers can do to limit the returns that are made and if consumers do need to return goods, utilise this as a platform to further cement good quality customer service and encourage brand loyalty.
1 Don’t make a promise you can’t keep
Sometimes, the simple reason for a consumer returning an item is that they did not receive the correct item, or it was not delivered on time. With increased volumes, improved customer experience and countless competitors, the risk of a missed promise is heightened.
Keep delivery times clear, and ensure the supply chain is managed accurately. Living in an omni-channel world, the key is to trust your stock control and retailers must ensure they have the ability to share up to date inventory figures via all of the various channels.
Accurate, real-time stock control, combined with intelligent processes will ensure retailers can not only capture data regarding the returned item, but also ensure staff are equipped to manage and re-allocate the item correctly in order to maximise further fulfilment.
2 Simplify with visibility
Automation has been an industry buzzword for years now and it is a given that without an automated inventory system that gives access to real time data, it will be very hard for any retailer to gain enough visibility of its inventory to improve its returns management process.
Small businesses with fewer returns can often manage them in-house using cloud-based shipping solutions that simplify printing or electronically creating return postage labels that customers print themselves. Barcodes on labels quickly identify customer records and product numbers to speed the return process, cut down on errors and save time.
Integrating with internal systems is important for large retail operations with high return volumes. Returned packages sitting on the warehouse floor cannot be effectively put back into stock without the right system in place. Connectivity must flow from the customer to the warehouse to the shipper into marketing, sales and accounting. For companies with few internal fulfilment resources, a third-party processing service can help. Merchants need to weigh the benefit versus the cost of using fulfilment and returns processing by marketplaces or third-parties.
3 Reverse returns and resell
The biggest issue most retailers will face with returns is how much they cost the business. From the admin, to the fact that the items very rarely make it back onto the shelf, the entire process can be costly for any retailer.
In an ideal world, returned items need to be back on sale quickly and efficiently, not only to mitigate the risk of profit loss, but to also avoid unnecessary waste. If retailers are to avoid fundamentally compromising profitability, the returns process needs an overhaul. Allowing the consumer several different courier options and ensuring rapid, secure and seamless payment processing, makes sure that the customers experience is as frictionless as possible. With an increasing consumer interest in sustainability and ethical processes, retailers can no longer afford to have ineffective returns processes that results in unnecessary waste.
4 Proactive, not reactive
eMarketer reports that more than half of all shoppers won’t do business when they feel the return policies are too strict.
The majority of shoppers prefer to receive a full refund, rather than exchange an item or receive store credit. Additionally, online shoppers don’t want to pay shipping costs when returning an item they don’t want or aren’t pleased with. Customers also want to be able to return items without receipts, tags, or original packing materials, and more than one in ten shoppers would prefer to buy items online and return them to a nearby store.
Whilst not all of the above can always be reasonably met, retailers still need to implement a well thought out returns policy that maintains loyal consumers and attracts new ones. For example, proactively defining the returns policy before a purchase is made might prevent disgruntled customers. Furthermore, if sellers choose an “ASOS-Style” returns policy with instant returns and free shipping, it can be promoted up front as part of a company’s brand.
Let’s revolutionise returns for the retailer
Returns management is an essential component of the retail offer and this will only increase as eCommerce continues to grow. But in order to ensure both profitability and customer experience, it is essential to put the systems in place to maximise the value of the return.
When properly managed, returns can showcase a retailers customer service skills, promote customer loyalty and even give them an edge on competitors. So as consumers are placing an increasing importance on the ease of returns,so now it is time for retailers to match the demand. Now is the time to revolutionise the inconvenience returns are seen to bring and maximise the opportunity.
Image credit: Khaos Control and Fotolia
