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Returns Management: Help Your Customer

Peter Sobotta
March 16, 2017

When it comes to high return rates for online retailers, many are quick to blame the customer: They are buying multiple sizes and colors and returning what they don’t like. Or, they’re “renting” the item by using it once and then returning it. Or, they’re fickle and often change their minds. But consider this: According to a story in Chain Store Age, research by TrueShip data shows 67% of all returned online purchases are the fault of the retailer and not the customer. The company found:

  • 23% of e-commerce returns are due to the wrong item being shipped
  • 22% are because the product looks different when it arrives than it did online
  • 22% of e-commerce returns are due to damage

Customers are often asked to indicate such errors by selecting from a list of reason codes on return merchandise authorization forms, used by many retailers. But sometimes returns don’t fit those pre-defined choices, so the customer is forced to pick one that doesn’t really apply.

Help your customers with returns management

So what happens to that data? Not much. Or at least, not much soon enough for the retailer to take action. But consider what would happen if the retailer could detect and act on patterns in returned merchandise quickly:

  1. The warehouse could investigate a pattern of a wrong item being shipped and discover a whole pallet has been mis-slotted
  2. Content managers could change the item description or image to better portray product attributes
  3. Supply chain managers could remedy the poor packaging that caused a jump in product breakage

Those aren’t the only retailer errors that could be fixed quickly by acting fast on returns data. Shipments missing a part, incorrect sizes, dead batteries – there are many things that can go wrong in fulfilling orders, causing high return rates. That means through proper returns management, there are also many opportunities to save future sales by righting the wrongs to satisfy customers the first time and prevent even higher return rates.

According to Aberdeen Group, businesses are increasingly aware of the connection between customer satisfaction and returns: 64% are targeting returns management as an avenue to improve overall customer satisfaction. The problem is that returns management is not a core competency of most retailers.

The key to leveraging return data lies in quickly analyzing it to find patterns. Reason codes, together with free-form customer comments on returns forms, remarks collected by call centers or social media, and even the observations of the people processing the returns, form a rich trove of data that help retailers quickly recognize problems and take action to reduce their high return rates.

Blaming the customer isn’t going to solve retail return rate problems. Instead implementing a well constructed returns management program aimed to understanding and acting on returns data is the best way to prevent retail returns.

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