How you handle returns can differentiate your brand and create a competitive advantage.
Returns management is often an afterthought for ecommerce companies. With online purchasing growing in popularity, the returns experience is becoming much more important. Especially around the holidays, it’s imperative for brands to implement a solid returns processing strategy.
With a successful returns process your brand will ensure the following:
- Positive customer satisfaction
- Greater potential for customer loyalty and advocacy
- Potentially higher profit margins
- Better inventory turnover which can net more sales
Be sure to set up your product return strategy before the holiday rush hits. Here’s how to set up a great return strategy for the holiday season.
Make Returns Part of Your Holiday Strategy
With the rise of online shopping, many brands expect customers to buy more items than they intend to keep. It’s now common practice to purchase with the intent to return.
Taking that a step further, some brands have made the returns process a core part of their business. For example, a clothing company might encourage customers to order multiple sizes, try them on at home, and send back the ones that don’t fit. If this is the case for your brand you’ll need to work hard to make sure returns come back quickly so that you can maximize the value of any returned merchandise.
This is an important part of where returns can fit into your overall holiday strategy. Even if returns aren’t part of your brand messaging, all year, it can be during the holidays.
“We found that reverse logistics has become an increasingly important part of brands going international. For some brands, reverse logistics is a critical part of their business.”
If your holiday strategy includes actively encouraging returns you need to make sure those returns are really easy for customers to execute. If you haven’t been adding a return slip to all packages, you might choose to do that just for the month of December. You may find that the return rate is lower than you think!
Focus on Customer Communication
The returns process should be primarily about customer communication. You want your customers’ return experience to be one of ease, simplicity, and speed.
Here are some of the places along the customer journey where you may need to add more communication regarding returns:
Make your return policy easy to find and clear within the checkout process. Customers need to know what to expect before they purchase.
Return deadlines are very important to communicate.
A return label and return packaging should be very easy to acquire. Many brands add a return label to all packages just in case—while that’s an added cost it makes the process so much smoother.
Be really clear where and how customers should drop off their return once it’s re-packaged. Are you allowing an in-store option? Or just mail-in returns?
Set customers up to know what to expect after they send back their return—When will they receive a refund? If exchanges are an option, what’s the timeline for sending new products out? Plus any other expectations you need to set for the post-return process.
Customers who know what to expect are going to be happier than those who are left guessing. Give your customers the gift of clarity around returns this year.
The Hidden Costs of Free Returns
The costs of return processing can add up quickly. Don’t get caught off guard with the shipping fees, labeling costs, and fulfillment charges to restock products that are incurred from returns.
The catch for most brands is that free shipping on returns is expected by most customers these days. Research shows that customers who know they’ll have to pay for return shipping are less likely to buy all together.
To make sure you’re not losing money on returned merchandise, incorporate return costs into your overall product pricing. You can do this by regularly assessing your rate of return, the average cost of returned items, and factoring that into your product cost.
If the cost of return shipping is too much for your business, get creative. For example, you could split the difference with your customers and offer a flat rate for returns. Or you could offer free returns if items are sent back within a narrow time frame, and add a return fee for late returns.
Work with Your 3PL for Faster Returns Processing
One of the biggest things ecommerce brands forget about in the holiday rush, is what happens with returned merchandise. Ideally the returned items will get processed quickly so that they can be added back into “good stock” right away. This isn’t necessarily an easy or simple thing to do.
Depending on the type of product you sell your re-stocking turn-around time will vary. Items that need to be re-flashed, refurbished, or re-packaged will take longer than items that do not need much attention to get back into inventory.
Some 3PLs offer specific value-added services like rework and refurbishment. Not all providers do this, or do it well. If you know your brand needs elaborate support to process RMAs, it’s important to have that conversation upfront with your fulfillment provider.
A good rule of thumb is seeking help from a 3PL who already supports brands with similar products to yours. Then you can rest assured that they have the capabilities and infrastructure to move returns along quickly, accurately, and efficiently.
Ultimately you want your customers to have a positive experience with your brand. No matter what sales and promotions you are planning for this year’s holiday rush, be sure you don’t forget to plan out your return strategy as well.
If you’re looking for a 3PL with fulfillment centers in cities across the US, we own and operate facilities in The Bay Area, Los Angeles, and Kentucky. Use DCL’s national footprint of warehouses to distribute your inventory across the country to reduce transit times and save on shipping costs. If you need fulfillment or shipping support and want to partner with DCL Logistics, we’d love to hear from you.