There’s a lot more to returns management than placing an item back on the shelf. In fact, returns can often be one of the most expensive and time consuming aspects of fulfillment, and quickly become a point of frustration for paying customers.
A comprehensive and efficient returns process, on the other hand, can help maximize your brand’s inventory space and easily recover the lost value of a returned shipment.
What is Returns Management
Returns management is the process of receiving, storing and reclaiming value from products that are sent back by the customer. It also offers an opportunity to identify the reasons for returns, such as misships, damage or defects.
A disorganized returns process can lead to a cascade of issues throughout your fulfillment center and ultimately impact the customer’s experience. Ramped up holding costs, limited storage space and additional work for your staff can lead to higher prices and warehouse bottlenecks. When aiming to maintain a flexible supply chain, avoiding these issues is crucial.
With so much competition in the fast-paced field of eCommerce, keeping up an optimized returns policy can give your brand the edge it needs to stand out from the crowd. Luckily, recent trends in eCommerce have made implementing the process easier than ever.
Reverse Logistics
One of the overarching goals of modifying your supply chain for optimal returns is to make your delivery process work in reverse. Rather than products moving one way, from warehouse to customer, reverse logistics ensures that products can also move in the opposite direction, from customer to warehouse.
The ultimate goal of reverse logistics is to provide an optimized method for receiving returns and reclaiming as much value as possible. According to Invesp, nearly one third of online orders are returned, compared to in-store purchases which are returned at a rate of 10%. As eCommerce continues to grow in popularity, it’s more important than ever for online retailers to set up a thought-out and optimized approach for a good returns process flow.
Let’s take a look at what needs to be prioritized when setting up reverse logistics, and how you can streamline returns management.
How to Streamline Returns Management
An efficient returns management process involves a multifaceted approach both in terms of warehouse operations and customer outreach. With upfront customer communication, proper data capture and an emphasis on quality assurance in the warehouse, setting up a reverse logistics protocol can be much easier.
Customer Communication
Cutting down on returns can sometimes be as easy as setting up clear and consistent communication with your customers. The decision to return an item is often because it doesn’t quite meet the expectations they got from the eCommerce store. Without the ability to physically hold or interact with an item before making a purchase, online shoppers rely on eCommerce platforms to tell them exactly what the product looks like and how it works.
By providing a detailed description that includes the item’s dimensions, color and functionality, your customers know exactly what they’re getting and can feel better about making an informed purchasing decision.
Beyond product descriptions, communicating how the returns process works is essential for reverse logistics to function. When a delivery is completed, customers should be made aware of how long they have to make a refundable return and how to get that process started. When a customer decides to send an item back, making them comfortable and confident about the process is a great way to keep them coming back, despite their dissatisfaction with the product.
Data Capture on Returned Items
Building a streamlined returns management process requires you to identify which products are returned most often and why customers are sending them back. Tracking this information is much easier when you have quality warehouse management software, or WMS, in your tool kit.
With all of your incoming and outgoing inventory pushed through a WMS, you’ll have insight into what items are being returned the most and why customers are sending them back. If one item is frequently returned for damages, for example, you can trace those issues back to the source, whether it be the supplier or your own warehouse staff.
Warehouse Quality Assurance
The easiest way to manage returns is by working to avoid them altogether. By working to ensure every item that leaves your warehouse is intact and accurate, customers will be much less likely to send the item back. Quality assurance in the warehouse can be tedious, but it’s the best way to ensure customer satisfaction and hold suppliers accountable for products that arrive mishandled or damaged.
Periodic inventory checks or product sampling can help your team spot defects before the item goes up for sale. The durability of some products can’t be determined by just a glance, so random testing of items pulled from the stock is also essential. With a commitment to quality assurance in your inventory management, you can be sure customers are satisfied and knowledgeable about exactly what they’re getting in the mail.
Conclusion
As the eCommerce industry continues to expand, so will the amount of returns sent back to warehouses. For a scaling online store, anticipating and planning for these issues is essential to the brand’s continued success. Streamlined reverse logistics and a proper returns management system can keep your warehouse operations running smoothly while ensuring a satisfying buying experience for your customers.
If you’re looking for a partner to help modernize how your brand handles returns, contact the Software Experts at ShipHero today.
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Aaron Rubin, Founder & CEO
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 major initiatives, his 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 have an impact on the lives of employees, customers, partners, and investors.
