Let’s address the expensive elephant in the room. In 2021, customers returned 16.6% of the merchandise they bought in the US, putting the overall annual cost of return management for retailers at $761 billion. But what if there was a way to harness the returns process to keep customers coming back to the store?
What is returns management?
There’s a lot of terminology surrounding product returns management: reverse logistics, gatekeeping and avoidance. However, in its simplest form, product returns management is the supply chain process by which retailers collect, organize and re-stock products that customers have returned.
What is a returns management department?
A product returns management department is simply the area of the store that handles order returns. This is usually in its own area of the store for one key reason.
Customers returning a product typically take a longer time to serve than those who are buying something. As such, it could lead to pure chaos on the shopfloor if retailers were to merge queues for paying and product return customers.
In general, most retailers have assigned return management departments where customers can bring unwanted goods.
What is the returns process?
The typical product in-store or ecommerce returns management process has five key steps (which may differ depending on whether the customer wants to return their purchase in-store or online).
These steps include:
- The customer decides to return their product: The product returns management process begins as soon as the customer decides they’re unhappy with the product they bought and requests a return. This can happen for all sorts of reasons–the order isn’t the right size, color or simply doesn’t meet their expectations. The customer must initiate the returns process by either asking for a refund at an in-store returns management department or posting it back to the retailer.
- A store associate evaluates the product: A customer service representative must then check the customer’s return policy to evaluate whether the item is eligible for a return by refund or exchange.
- The retailer collects the product: Assuming the customer is allowed to return the product, the retailer must then collect it either from the store or the delivery address.
- The product is inspected at a warehouse: Once a courier has returned the item to the appropriate site (typically a large sorting warehouse), it’s then inspected to determine if it’s resellable.
- The item is restocked: If the product passes inspection, it will either be restocked in-store or in a warehouse until the next customer buys it.
What is the importance of returns management?
Return management is an essential part of any successful retail strategy because 67% of customers check an item’s returns policy before making a purchase. In other words, your returns policy may be the difference between a sale and a near miss.
Unfortunately, many businesses overlook the product returns customer experience. Long queues and poor customer service are rife in return management departments across America.
What many business leaders don’t realize is that the product returns process doesn’t need to drain their retail profits. In fact, there’s some major benefits of excellent returns management. For example, 92% of customers will buy from a retailer again if the product return process is quick and easy.
What are the best ways to improve the returns process?
We’ve outlined below some key steps you can take to improve the returns process in line with best practices.
Customers often have to wait onwards of half an hour simply to return an item they don’t want. Not only is this incredibly frustrating, but it’s also poor shopfloor management.
By deploying an effective Virtual Queue Software (otherwise known as a Returns Management Software), retailers can free up returns customers to explore the store while they wait for service, boosting spontaneous purchases.
As they wait, customers can receive real-time updates straight to their phone and on TV screens dotted around the store. They can even receive an SMS when they need to go back to the returns management department.
Analyze your returns
It may seem daunting but capturing data on your returns is arguably the easiest step on our list to implement. After all, any Virtual Queuing System worth its salt should come with integrated Data Analytics capabilities.
In practice, the right system will enable your store associates to submit information on service outcomes and even ask questions to customers about their reason for returning the product.
In turn, this can be a game-changer for your resource allocation as you’ll receive real-time data on which products customers are returning and adjust your inventory accordingly.
Offer free shipping
One study found that consumer purchases rise by 58-357% when retailers offer free shipping on returns. Not bad, right?
By contrast, when customers are required to cover shipping costs for returns, purchases decrease by 74-100%.
The proof is in the numbers. Charging customers for shipping may lead to a short-term revenue increase but retailers are capping their long-term profitability.
Make your return policy crystal clear
Customers shouldn’t need to hunt far and wide to find your return policy. Nor should they need to hire a solicitor to break down legal jargon.
Make sure your returns and shipping policies are accessible online, easy to read and clear. Customers never take well to nasty surprises so it’s always better to be upfront about your returns policy.
Ultimately, the clearer your policy, the more realistic customer expectations will be.
Get in touch with Qudini
Contact us using the form below if you’d like to learn more about how we can revolutionize your product returns management process with our Virtual Queue Management System integrated with Business Intelligence Tools.
Alternatively, visit our Peak Support Page to find out how we can support you over the festive period and beyond with:
- Appointment Booking
- Virtual Interactions by Appointment and Live Shop
- Walk-in Queue Management
- Event Booking
- Click and Collect (aka Buy Online Pickup In Store)
- Task Management
- Store Team Break and Availability Management
- Employee Communications