The impact of returns, while virtually inevitable, can be lessened by implementing the right strategies.

The cost of returns to retailers, distributors and manufacturers is significant, encompassing factors such as restocking, transportation, customer service, loss of sales revenue, and other associated expenses. As such, it’s crucial to reduce the cost of returns wherever and whenever possible. But how?

By implementing proactive policies, optimizing your use of technology, rethinking your labor force, creating ways to let your customers help, and – maybe – being a bit tougher, you can lessen the impact of returns on your business.

1. Implement Proactive Policies

It’s vital to implement flexible return policies and to clearly communicate them. Too narrow a return window and you invite distrust and, if the customer does decide to purchase anyway, you risk beginning the sales process on a negative note.

If you are selling a retail product, allow in-store returns – regardless of whether they bought your product online or at your bricks and mortar location. It will make the process less painful for both the customer and you. Plus an added benefit – a replacement purchase is much more likely to happen when returning in-store.

Another important proactive policy is to accurately describe your product and its size(s) and dimensions, and provide a video or multiple clear, high-resolution images.  Better, more complete descriptions reduce returns.  We’ve all seen the examples of someone finding a great deal on a piece of furniture … only to find out it was dollhouse sized.  Look to the example of Amazon, which, for many products, uses a silhouette animation of a person holding the product.

2. Optimize Your Use of Technology

Following up on the importance of clear and accurate product descriptions, using technology to aid in the shopping experience can go a step further.  Augmented reality lets customers virtually put your product in their home to see how it fits, literally or figuratively.

Behind the scenes, technology can be used:

  • Optimize return receiving and restocking.
  • Artificial intelligence, big data, and machine learning can track returns and identify conditions or problems that lead to increases in returns – before they happen.
  • Inventory and warehouse management systems can streamline the restocking process and speed up resales.
  • Customer relationship management systems can track the entire post-sales process, keeping the customer informed of shipment and delivery status, and possibly even deliver post-sale messaging
  • Adopting new tech can increase trust and satisfaction, and reduce returns.

3. Create Ways to Let Your Customers Help

Believe it or not, even your customers can help reduce returns. Soliciting and publishing customer ratings and/or reviews can reduce concerns by allowing end users to address things you might not have thought of or chose not to address directly (e.g., “Is Carolina Blue more like navy blue or royal blue?”). Customers often jump at the chance to respond to other purchasers who have questions similar to their own. Providing such a forum creates customer confidence and reduces the load on your customer service team.

Make sure to collect purchaser feedback as well, especially when an item is returned. This will help provide data on the reasons for returns and help to reduce future instances. You also can take this data, along with data from the customer ratings/reviews, and create an FAQ page.

4. Rethink Your Labor Force

A fourth way to reduce the costs of returns is to make some changes within your staff ranks. Make sure marketing and sales staff members are delivering the right messages to the right customers. Selling your product to customers that ultimately will decide it is not right for them just translates into a higher number of returns.

What’s more, you might want to consider partnering with a third-party logistics provider to handle your returns. In many cases, this proves to be a more cost-effective situation.

5. Maybe Be a Bit Tougher

Of course you want your customers to be highly satisfied.  In the long run, this can happen when you don’t cater to your customers’ every whim.

For example, take shipping to post office boxes. If you allow that, your return rate will skyrocket. So maybe don’t ship wherever the customer wants.  Have limited options that allow them flexibility within your terms.

If you have large, expensive, or perishable products, don’t allow delivery without a signature. And in some scenarios, don’t offer instant refunds and instead wait until the product is returned in re-sellable condition.

Next Steps

Our automation and integration experts can help you streamline your operations to maximize productivity and ridiculously increase your ROI.  Let’s talk and take the first step towards future-proofing your e-commerce or distribution operations.  Contact an IndPro specialist today to start a discussion. We’re here to help!