The importance of returns management grows annually. With consumer expectations on the rise, companies must find ways to provide a seamless experience not just when ordering, but when returning orders as well. And that requires an effective strategy and a strong reverse logistics chain that can efficiently handle accepting returns.
Today, the term returns management encompasses much more than the returns policy and the method for accepting returns. It has become an integral part of the sales cycle, encompassing numerous steps from when a customer initiates a return request to the product’s return.
Rethinking returns management allows companies to maintain customer satisfaction, gain market edge, reduce costs, and maximize item reuse. This means the returns management strategy is not just a customer experience issue but also a margin and profitability challenge.
Why Does Return Management Matter?
There are many reasons why returns management can become the difference maker in your sales, brand reputation, and bottom line. Let’s explore some key ways returns management can impact your business.
Better Customer Experience
Customer happiness is a decisive factor in your business success. And since for 87% of shoppers, free returns are a key part of the buying decision, it makes sense to focus on ensuring that the process is as easy, intuitive, and fast as possible.
Having an effective returns process means that your customers will be more likely to buy again. In fact, the returns process can often serve as the perfect opportunity to generate new sales opportunities for your business if you offer a personalized experience.
Conversely, if you make customers jump through hoops for a simple return, delay payment processing, or add fees for return processing, you’ll likely see bad reviews, customer loss, and reduced revenue.
Higher Margins
As an eCommerce business, you will need to factor in a certain percentage of returns into your expenses. However, there are ways to reduce these expenses and streamline the returns process for cost-effectiveness.
By utilizing reverse logistics best practices, you can achieve a significant reduction in your costs in processing, restocking, transportation, and other areas of the process. That can lead to a drop in the cost of a returned item, allowing you to boost your profit margins and not have to worry about processing the returns your customers request.
More Control Over Inventory
Returned items can be a hassle to deal with because they don’t have a clear place in your inventory. Determining whether to write off or restock an item requires processing the return request, receiving it at your warehouse, and assessing its condition.
That’s why this is one area where having a good returns management process can be so beneficial. By knowing which items you can restock, how much it will cost, and when they can be added to stock, you will have much more control over your purchasing and stocking, avoiding having to buy excess inventory and ensuring that you’re utilizing all of your inventory, including items that are returned but still in excellent condition.
Insights Into Product Quality
If you have control over your returns processes, you can also gain insights into how different products or product groups are performing. And that can offer multiple advantages for making your business more effective, improving your brand’s reputation, and making timely changes to your selection.
Tracking frequently returned products helps identify potential underlying quality issues that may need addressing. If a product or product group is failing to meet the expectations of your buyers, that means that either its quality is lacking or that you are not communicating vital details about the options, features, or usability to the buyers before the purchase.
Previous chapter