Optimizing Returns: Implementing a Robust Management Solution

How to Implement a Returns Management Solution For Your Ecommerce Business

Posted on:
Jul 28, 2022

Research shows that 25% of customers return between 5% and 15% of items they purchase online. A returns management solution helps you handle the returned items effectively to satisfy your ecommerce customers without hurting your profit margin.  

Why managing returns is important for ecommerce

Returns management, also known as reverse logistics, refers to how a business manages returned items. How you handle returns plays an important role in determining the quality of the relationship between you and your customers. An effective management system boosts customer satisfaction, leading to increased customer retention and greater profitability. Also, listening to the reasons behind the returns is important. This will help you pinpoint the defective areas in your order fulfillment process to prevent the same issue from reoccurring. 

Besides improving your customers’ experience, successful returns management helps you recapture as much value as you can from returned items and reduce the processing costs. It assists you in identifying cost-effective ways to resell, reuse, or recycle the items to lower waste and maintain your profit margin.  

Challenges of returns and how an RMS can help overcome them  

Managing returns is never as straightforward as simply putting the products back on the shelf and waiting for another customer to purchase them. A returned item must first pass through a quality control process to determine if it’s still fit for sale. This process involves testing and inspecting the product, sending a damaged product to another facility for repair. You must also choose the most cost-effective way to handle defective products. Managing the information flow between these steps can be tedious and time-consuming. Especially for small business owners with a limited number of employees.  

A returns management solution (RMS) can help you overcome these challenges by optimizing every aspect of your return processes for efficiency and cost. It is a software tool that automates your returns management strategy to deliver holistic planning and execution while providing you with complete end-to-end visibility and control. Here are a few benefits of implementing an RMS in your business operations: 

Quicker, Easier, Safer Returns 

An RMS streamlines your after-sale management processes, allowing quicker, easier, and safer returns. It manages all the aspects of the returns process, ranging from quality control to repairs, return-to-vendor (RTV), returns merchandise authorization (RMA), reverse logistics routes, and customer communication. By automating these steps, an RMS standardizes workflow, improves accuracy, and speeds up the returns process.  

Enhance Customer Loyalty 

The way your business handles returns has a significant effect on your brand’s customer perception. An RMS creates an efficient and smooth process for customers to return items and receive timely replacements, store credits, or refunds. This enhances customer satisfaction and loyalty, resulting in repeat purchases and higher revenue. Additionally, with an RMS, your returns process can be customized to meet the different needs of your customers and deliver a better experience. This delineates you from your competitors and keeps your customers returning to patronize your business.  

Determining The Best Return Policy 

A report by Invesp Conversion Rate Optimization Company found that 67% of customers checked the returns page before finalizing a purchase, showing that a clear and reasonable returns policy is a strong conversion driver. Determining your business’s return policy calls for finding the perfect balance between leniency and strictness.  

Setting a return policy that’s too stringent can lead to low customer satisfaction and lost sales. On the other hand, while a liberal policy will keep your customers happy and improve loyalty, it can eat into your profit margin and encourage return fraud. There’s no carved-in-stone rule for crafting the best retail policy. The right return strategy for your business will depend on its unique needs.

How to create a return policy that works best for your business 

  • Consider the costs of returns. Calculate the costs involved in processing returns in your company, including transportation costs, restocking expenses, and repair costs. As a result, you can decipher how lenient you can be with your policy without your bottom line taking a hit.  
  • Set a reasonable time limit. Your return policy should allow a logical amount of time for customers to decide whether they are satisfied with their purchase or not. The standard limit ranges between 30 to 90 days.  
  • Define the acceptable product conditions: Setting limits regarding the acceptable conditions of returned products prevents customers from abusing your policy. In addition, clearly define the state a product must be in to approve a return. For example, you may require clothing items to be unworn with tags intact. You may also require pre-packaged items to still be in their original packaging. However, when it comes to defective products, they must be accepted for return without needing to fulfill any requirement.  
  • Decide on your compensation method. Your return policy should disclose how you compensate customers for returns–via store credits or a cash refund.  

GoShip can handle all your shipping needs 

Logistics is an indispensable part of the returns management process. You’d need a reliable carrier to expeditiously ship the returned item from the customer to your fulfillment center and from the center back to the customer, in cases where the item is replaced or repaired. At GoShip, we help ecommerce businesses find professional carriers to handle the transportation aspect of their returns strategy. 

 Our self-service platform connects e-commerce merchants with certified and affordable shipping services without requiring the services of a broker. Check out our website to get a free quote from domestic carriers today.

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