The end of the year is always a busy time for retailers, and with holiday shopping inevitably bringing more returns, there’s a lot to keep track of. Many eCommerce businesses and retailers carry over the hit on their inventory clear into Q3-Q4 of the following year, which can be detrimental to your business. Stop the vicious circle and make the most of Q1-Q3, so returns don’t have as much impact in Q4. Here are some tips on how to do just that.
Understanding the various types of returns and their respective impacts on a store is crucial for any business looking to get ahead. You should consider what those returns might cost to process and complete a product return rate analysis to gain insight into customer behaviors and quality control issues.
Then, looking beyond just percentages of gross demand, it is essential that all areas that could have an influence on return rates – such as inaccurate content, damage in transit, picking errors, and supplier QA problems – be accounted for and actively managed. After all, with each return comes a chance to learn more about customers and products.
Crunching the numbers on returns can be enlightening – not just for you but for your customers, too. If you find the cost of handling the returned item is bordering on the price of creating another product or procuring one from a distributor, issuing an easy refund and keeping the original item may be a smart play.
The “Just Keep It” return policy sounds almost too good to be true for consumers who get their money back and get to keep the product. But that’s exactly what happens. Instead of piling returned merchandise onto the growing inventory heap, stores are considering just handing customers their money back and letting them hang onto the product. Some retailers advise customers to just keep or donate their return after issuing a refund.
As you look ahead to Q4, one of the smartest moves you can make is to plan for what you want to accomplish in Q1-Q3. No matter how prepared you think you are, things can get hectic when the end of the year rolls around and the holiday season kicks into high gear.
Planning your operational activities now will help your team optimize and handle customer returns in Q4. As you plan for key dates, such as holidays, you can reduce future returns by planning your inventory needs.
Returns can be more expensive than orders, so minimizing those costs over time is important. You can use simple strategies like a more detailed product description or updated product photos. Taking proactive steps ahead of this year’s holiday season will ensure a smoother experience. Part of planning ahead could include the following steps:
Establish a Clear Return Policy
A clear return policy empowers customers to make informed decisions and shop confidently. This is because they know that if their purchase doesn’t fit just right, they will be able to get their money back.
By combining this transparent policy with insights into how often customers return items, you can tweak your strategy as needed – allowing shoppers to benefit from the right balance of affordability and quality. So look under the hood of your return policy today and ensure it’s optimized for maximum customer satisfaction.
Educate Your Employees
When it comes to refunds, educating employees is a must! After all, they are the ones dealing with customers and helping them get what’s owed. Knowing common types of returns and their potential pitfalls can help keep the process hiccup-free – leading to happy customers and satisfied employees. Investing in excellent customer service ensures that refunds are handled with friendliness, quickness, and accuracy so customers don’t feel let down by their experience or discouraged from shopping again.
No business enjoys processing returns, but it doesn’t have to be a chore. You can save time and energy by using an automated return management system. With these systems, labels are generated, items are tracked, and data is easily stored; the whole process is basically automated.
Automation can be a game changer for returns processing. Enabling faster, more accurate data capture and freeing up customer service teams to handle more pressing issues. Additionally, automation makes customers feel supported throughout their journey with packing, shipping, and tracking updates.
By removing manual administrative tasks, retailers and customers are more likely to communicate effectively, improving loyalty and lifetime value. The earlier you implement automation, the greater the chance of saving time and effort and preventing errors. So, come Q4, your returns won’t come back to haunt you since your data and inventory are updated.
Manage Inventory and Forecasting
There is no doubt that planning ahead of the holidays can make a big difference between your business’s success and failure during peak season. Keeping an eye on inventory levels is one of the most important things you can do to weather peak periods with the least disruption people.
Any sudden change in demand or return items will cause an even more significant snowball effect that will be hard to reverse. It doesn’t take a crystal ball to see out into the future, but it does take vigilance and a bit of savvy forecasting to do so. The more you prepare for the season, the more likely you will stay ahead of the competition.
Consider Reverse Logistics Services
Third-party logistics providers (3PL), like ShipHero, provide software and automated tracking that goes beyond a typical WMS. When it comes to handling your returns like a pro, ShipHero’s open API and tracking capabilities offer limitless possibilities.
You can rest easy knowing that Q4 won’t be a fright fest by having seamless integration with leading eCommerce and vendors. There’s no denying that returns present certain challenges, but with ShipHero, you get a warehouse management system that can adapt to these changes quickly.
Time to Get a Head Start
It is a great time to get a head start on your Q4 financial results in Q1-Q3. If you plan carefully, understand returns, educate your customers, automate, and keep an eye on inventory, you can minimize any impact from returns in Q4. Keep these tips in mind to ensure your business remains profitable and successful all year long.
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Aaron Rubin, Founder & CEO – ShipHero
About the author: Aaron Rubin is the Founder & CEO of ShipHero. He is responsible for planning and executing the overall vision and strategy of the organization. Rubin’s greatest strengths are leadership, change management, strategic planning, and a passion for progression. He is known for having his finger on the pulse of ShipHero’s significant initiatives, entrepreneurial spirit, and keen business acumen. His leadership of ShipHero is grounded in providing excellent customer service that drives improved business operations. His passion for ShipHero comes from the culture and his ability to impact the lives of employees, customers, partners, and investors.