eCommerce Guide: Returns Management in 2023

The idea is to imagine yourself as a frustrated buyer as well as the business processing a return request in a plausible scenario related to your product. For example, if your business sells leather jackets with zipper pockets, you want to imagine all the possible problems a customer can face in terms of order delivery.

Although complicated, the whole idea of streamlining your eCommerce business model revolves around the idea of customer experience and making the buyer’s journey seamless. 

From the product selection page to the point of receiving customer feedback, your online interaction with a customer needs to be clear and detailed.

Common misconceptions are laid to rest when returns management experts ask businesses to look at their product and cart pages. It’s often in these phases that the possibility and frequency of returns can be reduced drastically.

Experienced professionals can tell you simple things like immediate and easy widgets and pop-ups can save substantial time, frustration and most importantly, resources.

Streamlining effective communication between operational departments and customers can reduce complications, confusion and situations which often result in returns. 

Offering immediate returns, order confirmation pages and emails, additional size charts and references, and pre-return exchange or store credit compensations are effective ways of avoiding returns as well.

As it’s clear, returns management doesn’t work in a vacuum and is definitely not just limited to inbound and outbound logistics management. Therefore, you’ll need to focus on all points of customer interaction, inventory optimization and inter-departmental communication.

Returns make up a significant chunk of a robust eCommerce infrastructure to the point that employing a returns management system can make a business change the way it operates substantially.

While some might think of this as an extreme case scenario, studies show how revolutionary returns management optimization strategies have been for many businesses. 

Industries like food and beverages are prime examples of how critically integral returns processing can be for a supply chain as their entire logistics infrastructure prioritizes utilizing transportation for deliveries as well as returns. 

For businesses in other industries that implemented returns management, substantial opportunities arose to save costs, increase customer conversion, and generate more revenue. 

Improved Processes

There are several aspects of customer interaction that can be modified to optimize returns management. From an organizational perspective, designing strategies and systems to deal with returns can streamline your infrastructure. 

For example, having centralized return centers is an efficient way to avoid messy reverse logistics. Not only can businesses collect returned products in a better way but they can also sort through inventory conveniently, saving resources in the process.  

Similarly, collecting data from forward as well as reverse logistics can help identify and reduce delivery failures and/or product issues. This is particularly useful for businesses launching new products as design flaws can be rectified with a selective product recall.

Moreover, synchronizing logistics can also reduce expenses as trucks that are dropping off shipments can carry returned stock back to factories.

Define Returns Policies

Research shows that 67% of customers refuse to purchase from the same brand again if they’re required to pay for return shipping. What’s worse than making your customer pay for return shipping? Not mentioning this information at the time of purchase.

Return policies can make or break customer relationships. The last thing you need is for a customer to leave solely because they didn’t like your return agreement. And whether we like it or not, customers openly criticize brands that have vague or inadequate policies.  

Depending on your product specifications, clearly state the issues that you’re willing to address and the ones you can’t. This includes conditions that need to be met for return validity. If the case is time-sensitive, make sure that your deadlines aren’t unreasonable.

Most importantly, try to ensure your returns policies are noticeable and available on the product page. This serves as reassurance for new customers that are likely to have doubts about trusting new brands.

Use Integrated Technology Stacks

It’s impossible to have an overview of your entire supply chain without having the right technological infrastructure in place.

Without an integrated ERP keeping track of forward and reverse logistics, customer demands and managing returns can be frustrating because all these operations can create individual data silos.

There are dedicated as well as integrated returns management tools available in ERP systems that can provide accessibility and convenience.

That means you’ll have individual data sheets describing related but separate aspects of your business performance.

With automated workflows providing insight into individual product value, material cost, repair possibility and costs, return logistics and customer service contracts, making decisions on the fly can become a lot simpler and easier.

All brands may eventually need to automate the generation of returned material authorizations (RMAs), carrier integration and barcode identifiers.

Labeling, packaging and generating shipment documents are also examples of tasks that can be automated with an integrated tech stack.  

3PL Returns

It’s easy to ask your 3PL provider to help you set up a return logistics infrastructure. Returns management companies can even optimize returns management by sorting through returned items to repackage and resell them to other customers.

3PL returns processing can make it easy for brands to sort through damaged and disposable inventory, repackaging, cannibalization, etc.

Moreover, the data shared by 3PL providers can help you create new SKUs based on returns like offering open-box discounts for products that their 3PL providers report to be ready and available for purchase.