In ecommerce, product returns not only leave customers unhappy but also cut into the profits of a brand. In the year 2021, returns hit an all-time high of $761 billion worldwide. Moreover, for every $100 in returned products, ecommerce brands lost $10.30 to return fraud.
As long as your ecommerce sales grow constantly, returns are inevitable. However, that doesn't mean returns are a dead end. On the contrary, returns provide an opportunity to collect customer feedback, implement strategic improvements and delight your customers.
In fact, 92% of customers say they will buy again from a brand if the returns process is easy. Well, this statistic is worth exploring to reap benefits from your returns process. These current trends persuade ecommerce brands to rethink return management as a critical part of their business strategy! In today's world, returns aren't just the cost of doing ecommerce business; they really are an opportunity to engage with your customers and build loyalty.
In this blog, you will learn what is returns management, the process of returns management, tips to stay profitable with an efficient return management process, and how to optimise your returns management process with Eshopbox.
Returns management is the process an online brand follows to manage ecommerce returns. The process is designed to handle product returns, whether for an exchange or refund, to decide what to do with a product once it's returned.
The logistics supply chain is impacted by returns (such as warehouse management, inventory management, shipping and profitability)—making returns management crucial for ecommerce brands.
Now that you know what returns and returns management entails, let's understand why returns occur and whether they can be controlled or not.
Depending on the reason why the product was returned, you can categorize them as controllable or uncontrollable.
Controllable returns are the returns that can be reduced or completely eliminated through various strategies. These generally originate from how products are displayed on the product listing page to how they are shipped.
Here are a few examples:
Uncontrollable returns are the returns that cannot be reduced or prevented no matter what you do—they are simply out of your control. Unfortunately, this happens a lot in the apparel industry.
Here are a few examples:
Step 1: A customer initiates a return request
After receiving an order, customers may or may not like their purchase. If unhappy, the customer can initiate a return (refund or exchange) request on your website or the marketplace.
Step 2: The returned product is received
After receiving the return request, you (in the case of an online store) or the marketplace can schedule the pickup of the product. In some cases, ecommerce brands ask the customer to send the product to a predetermined location (a fulfilment centre, warehouse or any other location).
Whether you handle your returns yourself or your fulfilment provider handle them on your behalf, you need to decide what to do next with the returned product—restock it, refurbish it, raise a claim for it (if found defective), or even donate it.
Step 3: The return is processed
From here, it's crucial to act promptly.
The first thing you need to ensure is that the procedure for initiating a return is simple and fast for your customers. Such a hassle-free return experience will enable you to keep your customers happy even while returning a purchase. If not, your customer support team will be bombarded with hundreds of emails or calls from frustrated customers. Moreover, these angry customers can also state their troublesome experiences on social media—damaging your brand's reputation.
You can easily drive exchanges by encouraging your customers to buy another product when they are initiating a return request. You simply have to provide recommendations for colour, size, and style. By turning returns into exchanges, you can retain the revenue from the sale and you only have to incur costs for restocking the returned product into the inventory.
Moreover, you can give the option to get the refund in the store wallet so that your customers can purchase something else in the future.
When a return is initiated, you have to incur expenses on the return shipping. However, you can align the return pickup with an upcoming scheduled delivery in the same or nearby location.
You can split your inventory in multiple fulfilment centres located across India to expedite order delivery as well as the speed of return shipping. It will help you optimize the process of restocking the returned products in the available inventory and making them re-sellable quickly.
Once you receive the returned product in the fulfilment centre, you need to conduct quality checks to find out if there is any defect or damage in the returned product. This is a crucial step as it will determine the next course of action.
You can protect your business against returns fraud by detecting fraudulent behaviour via fraud-protection software. You can also implement a quality check at the customer's doorstep and send OTP (one-time-password) to the customer to ensure the delivery of high-value orders.
Eshopbox helps you manage returns effectively by ensuring revenue is recaptured in the following ways:
An efficient returns management can help ecommerce brands to attain various objectives. If you can handle the returns management process efficiently, it might help you reach your business goals fast. However, if you seek external help from experts, you can outsource your ecommerce operations to a 3PL provider like Eshopbox to accelerate the process and amplify the results—without losing sight of your core operations. Eshopbox will enable you to manage your returns, recapture your revenue and build everlasting confidence of your customers in your commerce brand.