Online retailers know that dealing with product returns is an inevitable part of the e-commerce business. While there are many ways to tighten the returns process and discourage customers from sending back merchandise, this approach runs the risk of losing customer loyalty. With existing customers estimated at up to five times the worth of new customers when it comes to lifetime revenue, how can companies salvage value from this dilemma?
An easier customer-facing process
As a customer, wouldn’t you find it more frustrating to deal with a company that withholds information or leaves their process details intentionally vague? The first step in making a returns process more convenient is through a clear and upfront statement regarding the company’s returns policy. How many days do they have to return? If applicable, what repairs will be covered under warranty management? This sort of clarity is a basic expectation when it comes to excellent customer service; not only will it help filter out potentially invalid returns, it also generates trust and goodwill right from the outset.
Many leaders in the e-commerce industry include a prepaid return label along with the package. This doesn’t belie an expectation that customers will return the product. Rather, the logic here is that if any customer isn’t satisfied with the product, that’s already a negative experience, and the best way to turn things around would be to make things easier for the customer moving forward. This also includes providing status updates on the returned package and processing of a refund or replacement order, as desired.
Thorough processing and data analysis
The general impression can be that returned merchandise equates to lost revenue, plain and simple. And while every business strives for the ideal scenario in which no item is returned, there’s always some value to be salvaged from the returns process in terms of information. Just like you can learn from your mistakes as an individual and move forward with better preparation, so too can businesses gather and analyze returns data to gain vital insights.
An excellent strategy for returns processing will include specific reason codes indicating why the product has been sent back. These are derived from the customer’s description of the issue, which is an essential part of the information they will fill out on the return slip. Next, a thorough inspection by the receiving logistics partner will cross-check and validate the reason for return against the actual condition of the product. Root cause determination along with captured product images will ensure clear and accurate documentation, leading to the practical analysis of trends and patterns which may be causing product defects or damage to packages.
Taking the necessary action
When you go over the lessons that any failure can teach, putting them to use and taking decisive response is the next step towards improvement. Companies can respond in various ways to the feedback received along with returned merchandise. Are the items being sent back because of incorrect sizing? Shoe size charts, for instance, can be inconsistent across geographical locations as well as individual retailers; adding a conversion system to the website will make it easier for customers to cross-reference and find their ideal fit. Was the customer especially upset about damage or features not living up to their expectations? Reaching out to them for more feedback can help to win them back.
Product returns don’t have to be a total loss. If a business truly values the loyalty of its customers, they are vital opportunities for understanding and addressing the reasons for dissatisfaction and generating value in the long term.
