Retailer’s Challenges for Return Process and Solution

So You Want to Buy a Return Solution. But, you’re not sure where to start. You realize that your return system has flaws, but wonder if there really is a better way. Please read on this article for an overview of the common challenges retailers face in their returns process and how a best-in-class solution can exceed your expectations and help to bring in additional revenue.

Retailer's Challenges for Return Process and Solution
Retailer’s Challenges for Return Process and Solution

What you’ll learn in this article:

  • When you know, it’s time to change how you’re handling returns.
  • Which manual tasks you can automate with a comprehensive solution.
  • How a solution can extend your brand, enhance customer experience and put more money in the bank.
  • The actionable data and insights you can gain from a smart solution.

Table of contents

Introduction: A return solution that works
Signs your returns process needs work
Costs are too high
Lack of visibility
Poor customer engagement
Return solution must-haves
Measurable cost savings
Actionable insights & data
Money in the bank
Buying a return system checklist

Introduction: A return solution that works

As a retailer, you need a return solution that gets the job done — and more. After all, 95% of customers who are satisfied with the returns process said they’d purchase from the retailer again, and 40% of customers that made a return bought a replacement item from the same retailer (Narvar Report: Making Returns a Competitive Advantage).

Your return process should be straightforward for your customers, easy for your team to manage, and ultimately provide a post-purchase experience that positions your brand in the best possible light.

Unfortunately, many retailers don’t have much a return process at all, and those that do struggle to find and implement a system that meets their needs. They wind up spending too much on return shipping and miss out on recapturing revenue. They see high volumes of support calls from customers who are confused about the process and refund status. At best, these return systems are cumbersome and expensive. At worst, they’re ruining the post-purchase experience, driving customers away from your brand. But there is a better way.

In this article, we’re sharing three signs that you need a better, improved return process. We’re also covering what you should look for in a new solution. By the end, you’ll be equipped with the knowledge necessary to find the perfect one.

Signs your returns process needs work

Despite best efforts, a retailer’s return process is never perfect — at least that’s what you tell yourself as you justify high costs and an onslaught of support calls. If you find that the return process bogs down your team, it’s likely time to find a new solution. Here are the top three signs that you need to update your returns process:

  • Costs are too high
  • Lack of visibility
  • Poor customer engagement

Costs are too high

One of the reasons retailers seek out a new return process is because their costs are unreasonably high. The retailer may be offering a good experience to customers but maybe paying for it (literally). Here’s how you’ll know it’s time to reign it in:

Too many calls to customer support. If more than 5% of calls to customer support are “Where is My Refund” (WISMR) calls, you have a problem. Your customer support team should be handling complex concerns (such as billing or promo code issues), rather than returns.

You’re running a manual returns process. A manual returns process can cost $5-20 per return, which adds up quickly. A self-service return portal eliminates the need for manual processing.

You’re getting products back that violate your returns policy. You may be paying for shipping that you shouldn’t. Return shipping and restocking add unnecessary expenses, particularly for items that are damaged, final sale, and past the return window.

You’re paying for in-package return shipping labels. Paying for the printing and insertion of labels that your customer may never use adds up to extraneous costs.

Lack of visibility

If you lack visibility into general tracking, package location, and the customer journey, it is time for a new return process.

Your customers don’t know when to expect their refunds. Your customers should always have insight into where their packages are in the returns journey, so they know when they can expect their returns and refunds will be processed.

You don’t know why products are coming back to you. You have no easy way to know what is being returned or why. Without this information, you aren’t able to assess your products, manufacturing, or item descriptions for quality and accuracy.

You have no idea how your customers feel about shopping with you. Customers often stop shopping with you because they’re displeased with the post-purchase experience, even though the issues they’re having could be easily solved. With better visibility, you’ll be able to pinpoint these problems so that they can be fixed.

Poor customer engagement

If you’re noticing poor customer engagement, your return process could be a large part of the problem. This is especially true if you see a low customer lifetime value, low satisfaction numbers, and few repeat buyers.

Low customer lifetime value. Customers that love your products and process are likely to buy from you over and over again. But, if they struggle to make returns, they’re not going to come back for more.

Low customer satisfaction numbers. Most retailers measure customer satisfaction, and the return process can be a sticking point for many. If customers wind up with products they don’t want but have trouble returning, they’re unlikely to report high levels of satisfaction.

Return solution must-haves

The return solution you choose should be able to save costs, control the end-to-end customer experience, and bring in additional revenue — all with ease. Here is what you should consider as you begin to research new solutions.

  • Measurable cost savings
  • Actionable insights & data
  • Money in the bank

Measurable cost savings

When evaluating a return solution, you need to make sure that it offers measurable cost savings. A self-service solution that automates the return process is your best bet. If you’re processing returns manually, you can save time and money by using a solution that does this for you. Smart return processing that encourages return policy compliance is essential, too. This will save your team hours placing return labels in boxes, triggering return confirmation emails, noting return reasons and more. The right solution will offer measurable cost savings and ultimately improve your bottom line.

Smart return processing to encourage return policy compliance

Returns don’t have to be a headache. Thanks to smart return processing, you’ll be able to prevent ineligible returns, offer exchanges, and offer store credit and more. Ultimately, this will allow you to stick to your return policy and save costs.

What to look for:

  • Blocking of ineligible returns. Look for a solution where a customer is immediately stopped from returning ineligible items. This also helps with final sale items.
  • Ability to offer exchanges. Find a solution that helps you prevent a return by offering to send a different colour or size (or even a different product that’s of the same value).
  • Enforcement of business rules. This is particularly helpful around perishables and makeup. If something is going to be trashed anyway, your return solution can automatically tell the customer to keep it or throw it away. With this feature, you avoid having to pay for return shipping, processing or disposal.
Smart return processing to encourage return policy compliance
Smart return processing to encourage return policy compliance

Smart return processing to encourage return policy compliance (cont.)

Dynamic label generation. Many retailers automatically include a return label in packages, but not all items can be returned. That means that consumers may send back items you don’t want. You’re stuck between not honouring the return and upsetting the customer or eating the cost. Save paper and return shipping costs by choosing a solution that dynamically creates return labels online for eligible items only.

Ability to offer store credit. Your solution should give customers the ability to return an item for a credit instead of a refund. This tactic is usually used in conjunction with a waived return fee.

Smart return processing to encourage return policy compliance
Smart return processing to encourage return policy compliance

A place where customers can look up refund status

When implementing a new return process, your goal is to continue to provide the best customer experience after purchase and save time and resources. With a self-service returns solution, the number of WISMR calls go down, which means your customer support team can spend the bulk of their time ensuring your buyers have amazing experiences instead of responding to these simple questions.

What to look for: A self-help portal. Make sure your new return solution allows customers to check on their return status without your help.

A place where customers can look up refund status
A place where customers can look up refund status

Actionable insights & data

You’ll be able to find savvy ways to reduce costs, improve products, and ultimately create a better customer experience with actionable insights and data from your return solution. To get these insights, you’ll want return reporting, integrations, and a feedback module.

Reporting on what’s being returned and why

Managing the input and output of your inventory is essential for improving your products and customer experience and increasing the likelihood that customers will shop with you again. You need a solution that offers the data you need so that you can make adjustments that save costs as needed.

What to look for:

  • Reason codes. With reason codes, you’ll know why a product is coming back so that you can address the real problem. For example, product pages could be updated, manufacturers could be notified to modify their sizing, and packagers can be asked to pack differently if items arrive broken.
  • Reporting dashboard. Robust return solutions provide a dashboard that shows you your most returned items, the average value of returned orders and number of returns initiated and received.
Reporting on what’s being returned and why
Reporting on what’s being returned and why

Integration with internal systems

A return process is useless unless it integrates seamlessly with your internal systems. It would help if you had a solution that layers on to your solutions, giving you extra intelligence on your current workflow.

What to look for:

  • OMS and RMA integration. Your return solution should integrate with your internal system so you can clearly identify items that are part of an order, understand return eligibility, and receive feedback on each item being returned.
  • Inventory visibility. By connecting to your inventory system, your return solution can surface exchange options in real-time without you or the customer having to take extra steps. You can also deliver the same level of care your customer has come to expect from you even when a product doesn’t work out.
  • Return routing and rule settings. Find a solution that allows you to pre-set return rules and automatically direct product to the appropriate distribution center or store. This is particularly helpful with items that can be resold and damaged goods that need to be routed to a disposal center.
Integration with internal systems
Integration with internal systems

Product feedback in your customers’ own words

Under most models where the returns are handled through a carrier, there’s no visibility into what your customers think or feel. But, it would help if you had these qualitative statements better to assess product quality, description accuracy and more.

What to look for:

A product comment section. Find a solution that allows your customers to share with you what issue they had with the product — or with any part of their experience shopping with you.

Product feedback in your customers’ own words
Product feedback in your customers’ own words

Money in the bank

A return solution should do more than provide a better experience and save costs — it should also result in more money in the bank. It should give you additional marketing opportunities, as well as the ability to control the customer experience and branding.

Extend marketing reach through additional channels

A return solution is not usually seen as an additional marketing channel. However, the best ones give you the ability to drive additional traffic and conversions. Customers generally seek a better-suited product when one doesn’t work out. With the right return solution, you have the ability to market other options to them at multiple touchpoints throughout the journey.

What to look for:

  • Message bundling. By bundling marketing messages with transactional emails and notifications, you open up a new channel to reach your most qualified buyers that don’t require an opt-in.
  • Additional promotional space. Rather than relying on third-party advertisers to spread your message, you can populate your return experience with relevant products, discounts, promotions, and other updates. This encourages further purchases.
Extend marketing reach through additional channels
Extend marketing reach through additional channels

Ability to control customer experience & brand

When a customer makes a return, you need to be able to control the experience, serving up your branding and business rules. It would help if you had a solution that is far from one-size-fits-all. It should be customizable and flexible so that you can tailor it to fit your needs.

What to look for:

  • Advanced customization. You need to be able to create the perfect experience for your customers, complete with your logo, brand colours and fonts, and headers.
  • Seamless customer experience. No matter what, customers should feel continuity with your brand, rather than jumping to a carrier site that may have a clunky experience that is out of your hands to fix.
Ability to control customer experience & brand
Ability to control customer experience & brand

Buying a return system checklist

Measurable cost savings:

  • Blocking of ineligible returns
  • Ability to offer exchanges
  • Business rules enforcement
  • Dynamic label generation
  • Ability to offer store credit
  • Self-help portal

Actionable insights & data:

  • Reason codes
  • Reporting dashboard
  • OMS and RMA integration
  • Inventory visibility
  • Return routing and rule settings
  • A product comment section

Money in the bank:

  • Message bundling
  • Additional promotional space
  • Advanced customization
  • Seamless customer experience

Source: Narvar: Intelligent Customer Experience Platform

Published by Jeannette Scott

, a wellness coach specializing in stress management and quality of life. She’s covered topics from nutrition to psychology, from sexuality to autoimmune diseases and cancer.