From a consumer standpoint, a return is simply a retailer taking back the sold product and processing a refund. Customers want the process to be fast and hassle-free. However, from a retailer’s perspective, the returns process is much more complicated. Products have to be brought back using a shipping partner, they have to be evaluated for the source and extent of damage if any, a decision has to be made about re-purposing or discarding the product and inventory and accounts need to be adjusted.
There are also a few unique cases that crop up. A consumer may have bought medical grade lenses online, only to discover that they expire in a short while, prompting them to return the product. Being medical grade, there is no way to repurpose them. On the other hand, cosmetics that have been returned for being too close to expiry just may make it to the sale hampers section.
For a retailer selling a wide assortment of products, sorting through returns, making decisions about them and implementing these decisions is a process in itself.
In this article, we talk about a few different ways of handling returns based on the kind of products you sell. Some of these sections are relevant to all online sellers, while others are industry-specific and also dependent on business turnover.
Handling Faulty Returns
A major reason for receiving returns continues to be product damage during transit. Clothes can snag on sharp objects, electronic goods can get crushed under weight, cosmetics can break or melt due to rough handling. There have even been instances of products being replaced with fluff and brinks during transit, resulting in a confused retailer and a disgruntled customer.
You know that shipping is not foolproof and yet, ship you must. The most important thing you can do for your business is to insure all shipments. This way, you can greatly minimise the financial risk for your business.
When a consumer raises a request to return a faulty product, you need to ensure that the return is completed quickly and a refund is processed immediately. Most customers returning faulty goods are more than happy to share images of the damage. You can use them to assess the product’s usability even before it arrives back at your warehouse.
Most faulty goods are not good enough for a resale, but some can be disposed at a heavy discount, after pointing out the extent of damage in the product description. For example, a small bump on a Bluetooth speaker may not deter a college kid just setting up a new dorm room, especially if it is much cheaper than it should be.
By selling at the cost price, you can at least relieve your business of some of the financial burden.
There are other goods with expiry dates that you cannot possibly sell again but are still safe to use for a short period of time. Several agencies accept these product donations and put them to good use within the local community. Find such agencies that give the products away. Remember to adjust your inventory levels and accounting books accordingly.
Easy vs Comprehensive Returns Process
When you see a pattern of several high-value items being returned, you would want to stop it as soon as you can. Oftentimes, we depend on customer feedback to understand what went wrong, but how do we get this from an unhappy customer who just wants his money back?
The easy way- Wait it out until the products come in for inspection. Inspect the product and its performance carefully to see if there are any flaws you can find. If not, process the refund and add the product back to your inventory.
The longer path– In the meantime, once the refund is processed, get in touch with a few customers to understand why they chose to return the product. Sometimes, high-value products cause buyer’s guilt, and yes, people do return products when they feel they have spent too much money on them. This is a winding path to the same end, but it gives you something the easy way does not- customer data and insights.
You may find that some products are just too high in value for your consumer base, or you may find that the products don’t perform as expected. In both cases, it is a chance for you to re-evaluate your product assortment and make adjustments as necessary.
This process applies to sellers of high-value fashion accessories, electronic goods, furniture, and appliances.
Handling Fraudulent Returns
If you haven’t had a fraudulent return already, you will be surprised to know that it isn’t just customers that are cheated out of what they paid for.
While we cannot put the blame squarely on the customer or the shipper, it is known that sometimes, retailers process a return for a MacBook and get a bundle of used paper instead. Again, by insuring your returns just as thoroughly, you can avoid some amount of risk.
If you find that a consumer is responsible for cheating you, you can follow a stepwise process. First, block the consumer from making further purchases from your site. Write to them to tell them that they have been blocked, and explain why. Try and be kind.
Second, a consumer committing fraud can choose either to be quiet about the whole issue, or they may choose to become intensely vocal about you and begin the mudslinging across all platforms. At this point, your legal team needs to be involved to sort this out in court.
Remember, as a retailer, you don’t want to pick a fight unless you see a good business reason for doing so. Teaching people a lesson is not your job. However, if this is a pattern with a few customers, or if you think handling one such case well would discourage others from following suit, you need to take it up as professionally as you can.
Using Third Party Services
For very large scale retail operations, the reverse logistics can be too much to handle, or even well out of their core competency. Third party retailers usually sell refurbished goods at a fraction of the price of the original.
Most sellers of refurbished goods also take up the returns process themselves – they use their logistics to collect the product from a customer, they send you a pick-up receipt so you can process a refund, and they pay you a certain price for the product based on an agreement you sign.
Then, these resellers refurbish or repair the product as much as possible, determine a price for it and put it on sale with the changes specified. Many electronics retailers, furniture sellers, and home appliance retailers usually have such arrangements with a third party vendor.
As a growing business in any of these areas, you may want to consider outsourcing your returns entirely. Indeed, if selling is what you do best, it is good to focus on just that and let someone else handle the returns logistics. Since you are the original seller of the product, you can still ask your consumers for feedback and find ways to implement it.
With omnichannel retailing comes the concept of omnichannel returns- customers buy on one channel but return through another. This is especially true of brands that have a physical store presence. For a customer wanting to return a product, it is just easier to take it to the store.
Some companies have aced cross-channel servicing and returns. Irrespective of how you buy your iPhone, you can take it to any store and get it replaced if there is a problem. Apple can do this partly because they can afford to, and also because they have a relatively smaller product assortment, so to speak.
If you have a large product assortment, if you sell only a few products on certain channels or if your products are lower in value and margins, it may not be worth your while to even consider omnichannel returns.
However, if you have products of high value and high margins, allowing customers to return them in your stores irrespective of where hey buy adds an extra layer of trust to the business. Consumers know how convenient it is to buy from you, so they are more likely to keep coming back. Ensure that you have a system in place to assess which channel the sale was made on and which channel the return was processed on. This is especially helpful if you have a fixed amount of inventory assigned to each channel.
It wouldn’t be too far-fetched to say that we try to make returns super convenient so that, eventually, we may never have to process returns at all!
Handling returns is a cumbersome process for retailers and a waste of time for consumers. Preventive maintenance is an industry best practice for several retailers who deal with large sales volumes. While each company has a different policy and process, preventing returns can be done using for basic steps:
- Testing the products: The best way to know more about a product’s performance is to use it yourself. If you manufacture or resell goods, it is a good idea to test each product model internally.
- Customer feedback: You can collect feedback from customers through forms, surveys and what they say on social media.
- Internal feedback: Set up a system to record the notes made about a product’s quality by the team or employee that handles the returns.
- Fix the problem: Compare the feedback received and understand if there is an underlying issue in design or delivery that is giving rise to complaints. Fix the problem so you have fewer returns over time.
To sum it all up, a sound returns process saves you time. It helps consumers by being easy and builds trust in your brand. Depending on the size and nature of your business, you can choose a returns process that works for you. Third party sellers are ideal if you have a high volume of sales and returns. Omnichannel returns work for retailers with a relatively smaller product catalog. In any case, always work to reduce the number of returns over time.