Four Ways to Improve Your Ecommerce Returns Management

The rise of ecommerce and online shopping has changed the way many companies do business. Returns are now a critical part of many brand’s operational strategy.

By DCL Logistics Updated September 6, 2022 Published May 21, 2022

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The rise of ecommerce and online shopping has changed the way many companies do business. Returns are now a critical part of many brand’s operational strategy. For example, a lingerie company might promote a try-on-at-home model where customers buy multiple sizes with the understanding that they will be returning many items from the order.

It’s now imperative to offer customers an easy return solution, whether you are promoting it as part of your business or not. Optimizing your reverse logistics for efficiencies will save your team time, money, and give your customers a much better experience with your brand. Here are four top important ways you can improve customer returns.

Benefits of Optimized Returns Management

By streamlining the way products move back through your supply chain, you will see benefits such as cost savings and improve customer loyalty. Here are the big benefits your brand will see.

Better Profit Margins. Regain value from returns by refurbishing them for resale. If your operations are efficient, your profit margins will improve.

Increased Customer Satisfaction. The way your business handles returns could directly affect how customers feel about your brand. Offer your customers a smooth way to return items and they are likely to come back for other items in the future.

Faster Turnaround. Everyone wants to know when their refund will hit their bank account. With optimized operations you’ll provide a speedy refund process for your customers, and a fast resale program for yourself.

Reduced Waste. Returns give you great data. Identify the products that aren’t working from the items that are returned most often. Set up a reuse or recycle program to extend the lifecycle of your product materials.

Industry insight! outsourcing fulfillment and logistics can give you a lot more leverage to execute customer returns quickly, accurately, and in a customer-friendly way. When vetting a new 3PL be sure to ask how they handle returns. Some fulfillment providers won’t at all, some will have a lean program to receive returns, and others will go above and beyond to help with customer requests and communication.

  1. Returns Should Focus on the Customer Experience 

The customer should be top of mind in every aspect of your returns management process. Here are a few milestones in the reverse logistics journey that need to be considered from the customer's point of view.

How are returns initiated? 

Will returns be initiated via phone, email, or chat? Does the customer need to log in somewhere to start a return, or are their directions and a shipping label in their package already? Is your returns policy clearly stated?

Your choices will likely depend on your customer demographic and your product. Larger items may need special packaging or pickup to be returned easily. Smaller items can often be resealed in the same mailer they were sent in.

Is the shipping documentation clear?  

It should be stated very clearly where the product needs to be taken to get shipped back to your fulfillment center. For example, many customers might conflate USPS with UPS if they don’t read carefully. Eliminate disgruntled customers who may go to the wrong carrier only to finally reach the front of the line and realize they are in the wrong place.

Make your documentation incredibly clear with easy-to-follow directions. Don’t leave much for the customer to fill in or complete. For example, a return address should already be filled in for them. No one has the time to look up the correct address for returns.

Notifications!

How will you alert your customer that their refund was process? Everyone wants to make sure they get the maximum refund possible. Better than just an email about their refund, let the customer know when the return has arrived at the facility, and how long they may have to wait for the next step to be processed. By proactively communicating, you’ll save your customer service team from fielding calls inquiring about refunds.

Industry insight! A note on international returns. If you’re starting to ship into international markets, mapping out your reverse logistics is imperative. If your international customers want to return products, it’s a complex process with many ways to handle it. Be sure you have a plan for refunding the duties and customs fees to those customers.

  1. Set up a Rework and Refurbishment Program 

Depending on the type of products you sell you’ll want to capture returned items and add them back into your inventory for resale if they are in good condition (this won’t work for food and beverage, or other consumer packaged goods).

Many 3PLs offer value-added services like rework which means your returns can be processed and returned to your sellable inventory all under one roof. This will save you the following costs:

Hiring a third party company to inspect your returned items.
Shipping costs to send returned items to your offices to get inspected and refurbished.
Shipping costs to send the refurbished items back to the fulfillment provider.

Some 3PLs will also take care of waste, product disposal, or separating components to be recycled into new products and shipping those parts back to the manufacturer.

  1. Make Sure You Have Reliable Quality Control Processes

Getting products back to the warehouse is one thing, but an underappreciated aspect of returns management is the operation of receiving and processing products once they are returned. This requires organization, clear documentation and above all a quality control process.

When items come back to the warehouse they need clear pathways to get processed: some may be able to be resold, which means they’ll need quality checks and possible refurbishment, and the rest will be waste that needs to either be disposed of or recycled.

Speed and efficiency are paramount to either process. If your products are re-sellable once returned, you want to get them back into your inventory cycle quickly. If they need to be disposed of, you’ll want to get the waste out quickly as well.

The bottom line is you’ll need strong operational procedures to accurately sort through returned items and efficiently get them processed. The way you get there is quality control. Here are a few aspects you can add to your quality control returns process.

Go deep with documentation and data collection.

The more you document what happens with each return (why it was returned, how it came back, etc.) the more data you’ll have to improve both your reverse logistics and your product iteration. Here are three things to consider in your documentation to ensure returns are processed quickly.

  1. Traffic distribution-like incoming orders and outgoing shipments, returns will develop their own patterns with a peak day each week which you can add more staff.
  2. Intake-how quickly does your team take to open, identify and prepare products for inspection or rework? Documenting this will lead to finding ways to make the process faster and more efficient.
  3. Product verification-you’ll need to classify each item to sort products that are moving to each various next destination. Is your process for doing this simple? Can it be improved?

Make the return labels and packaging very clear.

If packages are coming into your warehouse, it will be much more efficient for receiving to know immediately which packages are returns and which are not. Even better, provide a label with a dedicated location or address that your shipper can use to keep the returns separate from other inbound shipments.

Set up a dedicated returns quality team.

Processing returns requires specialized skills: identification, sorting, restocking, or disposing of products. By building a dedicated team to these tasks you can be assured that the job is being completed by people who are trained.

Industry insight! Remember, even if you use just one shipping carrier for your outgoing packages, you will likely get returns delivered from USPS, UPS, Fedex and other carriers. You should have relationships with all of them so you can set your preferences and work together on getting your returns delivered in a manner that benefits you the most.

  1. Automate Everything to Increase Efficiency

Many ecommerce businesses implement returns management software to automate many aspects of their reverse logistics operations. A modern 3PL will have returns tracking baked into their fulfillment management tools.

You can automate aspects like parcel auditing, routing return requests, label creation, and many more. Here are some key areas you’ll want to add automation:

Customer Communications

So many ecommerce platforms now have ways to automate many parts of the product journey. Add in return emails to that list. Your customers should get notified when their returns have been processed and they’ve been refunded.

Shipment Tracking

“Where is my package?” is the most common customer service request, followed by “When will my refund be processed?” By tracking reverse logistics shipping information you’ll be able to give customers a head’s up of the stages of the journey.

Inventory

If returns need to be manually placed back into your inventory there will likely be errors. Automating products going back into inventory will save time and give you greater accuracy.

Many supply chains stop measuring success once the product is delivered. While this is sometimes an accurate measure of customer satisfaction and profit, it doesn’t account for all situations. By adding reverse logistics data to your fulfillment and logistics software management tools, your operations will be transparent across your network. You’ll be better able to track performance across the entire life cycle of a product, and better identify opportunities for improvement.

About DCL Logistics 

We provide hassle-free fulfillment for high-growth brands.

DCL Logistics is a modern 3PL, grounded in 40 years of operational expertise. Our full suite of fulfillment services allow brands to scale without sacrificing flexibility, quality, or customer satisfaction.

Our customer-centric approach to fulfillment has attracted trendsetting brands like GoPro, Magic Spoon, Shokz, and maude, to work with us for decades.

Reach out for a quote if you’re interested in partnering with us.

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