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Returns Management in the COVID-19 Pandemic

Matt Blevins
Updated 05/18/20 2:26 PM

With more than 1 million confirmed cases so far in the United States, the COVID-19 virus has affected our lives in nearly every way.

How we work, how we socialize, how we eat, and how we exercise have drastically changed since the beginning of 2020. And on the long list of the aspects of daily life that have been impacted is our shopping.

In this post we'll explore the impact that the COVID-19 global pandemic has has on ecommerce retailers and six tangible ways retailers can keep up with their returns management in the midst of the crisis.

Table of Contents:

  1. New Age of Retail
  2. Polarity of Effects in Ecommerce
  3. Returns in the New Normal
  4. 6 Ways to Keep up with Returns

New Age of Retail

Brick-and-mortar retail looks dramatically different in the new normal.

Many businesses have lost the ability to operate store locations under stay-at-home orders.

Those that are able to shift online see only a fraction of their expected revenue, and are forced to contend with the chains and industry giants who have already established an omni-channel presence.

While the bankruptcy announcements of J.Crew and Neiman Marcus can hardly be attributed to the virus alone, they are certainly vivid precursors of what may be in store for many offline-first retailers. 

Polarity of Effects in Ecommerce

The impacts on ecommerce retailers really vary by product category.

But the overall effect is summarized well by looking at Shopify's stock price, which has all but doubled year to date.

Many product categories that enhance the immediate, day-to-day lives of shoppers are seeing impressive growth across the board.

Ecommerce grocery items, home goods, and fitness gear are in high demand given the current needs of consumers.

And the results can be staggering.

returns-management-in-the-covid-19-pandemic-weekly-sales

The above graphic displays the weekly revenue, year to date, for a brand that crafts fitness apparel for women.

But many who specialize in luxury or occasion-based products tend to be feeling an intense negative impact.

returns-management-in-the-covid-19-pandemic-sales-over-time

Here, we see the weekly revenue, year to date, for a retailer who focuses on women's fashion essentials.

Many consumers simply are not looking for formalwear, designer handbags, or swimsuits right now.

Returns in the New Normal

For brands enjoying sales spikes, heightened revenue brings an unwanted consequence - more returns.

On aggregate, retailers working with ReturnLogic saw a comparable number of RMAs created weekly per retailer in March as they did following Black Friday, and even more than right after the holidays.

returns-management-in-the-covid-19-pandemic-weekly-rmas

So what can retailers do, when they may now routinely face surges of inbound returns that rival the busiest time of year?

We spoke in-depth with members of our Customer Success team to uncover how you can more effectively manage returns in these atypical times.

6 Ways to Keep up with Returns

Our Customer Success team highly emphasizes the importance of proactive measures. This way, you are better prepared for returns before they are even created.

But, it is still not too late to react to the influx of returns and enhance your workflow.

1. Communicate Efficiently with Shoppers

Whether through an automated communication or a message on your website, it's imperative to inform your shoppers of current updates. The last thing they want right now is another surprise.

Shape their expectations before they become disaffected.

At the same time, try to avoid one-to-one customer communications, if possible. They lack broad customer impact, and can slow down your workflow. (This is where returns management software can help.)

2. Delineate Your Processes

In the scope of returns management, two of the greatest challenges are managing inventory and recovering value on returned products.

Inventory management solutions can play a pivotal role in ecommerce fulfillment. The keys to managing purchases and maintaining inventory stock are efficiency and organization. 

Automation is key throughout the returns workflow. Although many retailers choose to manually authorize returns, automation cuts down on repetitive tasks and can vastly expedite your process.

returns-management-in-the-covid-19-pandemic-gina-lin

In terms of recovering value on returned merchandise, it's important to have a strategy in place before your return volume becomes onerous.

Liquidation marketplaces, such as B-Stock, offer an avenue for ecommerce retailers to sell returned and excess products quickly and reliably.

On top of that, the open marketplace format brings a mass of buyers to you and can deliver greater recovery value than traditional aftermarket options.

3. Ensure Ample Support

Our team highlights that it is best to have multiple people on staff who are trained in how to process returns.

Even if your scale doesn't quite warrant multiple full-time individuals in this area, it is good to have some cross-functional support for when the volume spikes.

For some of our retailers, individuals from marketing and finance departments stand in to assist with physical operations as needed.

returns-management-in-the-covid-19-pandemic-jerica

This enables their teams to flex with the quantity of sales and returns, without rushing to hire or train new team members. 

4. Establish a Priority for Returns

Whether you are expecting a surge in returns, or they have already arrived, it can be very useful to develop a priority or methodological order for your returns.

If your focus is on the products and value recovery, you might wish to organize by condition of the product.

This way, you can quickly remove damaged and defective products, and focus more attention on those that can be resold.

But if you're more concentrated on the customer experience, you may want to prioritize returns by the date they were created.

Processing returns in a first in first out method will prevent any one shopper from experiencing a long delay.

5. Bolster Your Inventory

Some retailers struggle to maintain adequate inventory to fulfill exchange orders, since their sales volume is greater than normal.

returns-management-in-the-covid-19-pandemic-jerica-reddig

But this concern can be alleviated by increasing the exchange inventory threshold to make sure you have stock in place to fulfill exchange orders.

In addition, you can process - but not complete - exchanges immediately following their creation. This way, there is no worry of running out of stock before the exchange order is sent out.

Effectively restocking inventory can also improve the inventory shortage problem.

returns-management-in-the-covid-19-pandemic-gina-lin-returnlogic

Operations and fulfillment are truly the foundation of the customer experience. By keeping your inventory counts updated, you can prevent stockout cases they occur.

6. Reduce the Quantity of Items Sent Back

Of course, the ideal way to accomplish this would be to reduce your return rate. But when you're flooded with orders to fill and returns to process, this may not be the most practical approach.

What you can do is adjust the shipping types depending on return types or return reasons.

For example, if a shopper is returning a product because it was damaged when it arrived, you might not prioritize receiving that item back right now.

returns-management-in-the-covid-19-pandemic-jerica-reddig-customer-success

By switching returns of these items to “No Shipping," you can temporarily reduce the volume of returns coming back to your team.

In Summary

The new normal of the COVID-19 pandemic has affected our lives in almost every way imaginable.

Each and every business has been impacted in a different way. Some fight to stay in business, while others struggle to keep up with demand.

ReturnLogic wishes the best for you and your team, and strives to partner with you through the journey of ecommerce.

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