Even though every business makes the best possible efforts, at times customers will return products. If this process is not handled correctly, it can be an immensely frustrating one – both for the company and the customer, and an inefficient and clumbersome product return process can have a major impact on both cost and reputation.
THE MAGNITUDE OF THE PROBLEM
This isn’t a small issue, either. According to ReadyCloud, around 30-35% of all products that are ordered online will be returned by consumers – and of all instances of e-commerce returns, 65% of them are the fault of the retailer. The costs are considerable: in 2016, Clear Returns estimated that in the UK alone, returns cost retailers GBP 60bn per year – GBP 20bn of which is for items bought over the internet.
REASONS BEHIND RETURNS
So what causes this problem? The ReadyCloud research indicates that 23% of product returns are due to the wrong product being received; 22% are due to the product looking different to that which had been imagined; and that 20% are due to the product being damaged.
But how does it differ between sectors? There are variations depending on which product sector a retailer is operating in. KPMG estimates that approximate 25% of fashion purchases are returned; 15% each for sport and travel equipment, health and beauty products, and furniture; and 10% of all furniture and electrical goods.
For some retailers, the proportions of items returned can approach 70% and, in the fashion and clothing sector in particular, there is the major issue of ‘intentional returns’, where clothes are purchased by the consumer with the intention of wearing and then returning them.
A SUBSTANTIAL IMPACT
The scale of this problem is therefore considerable. If returns are not dealt with effectively, products can be caught up in internal processes for months, with administrative, handling, logistical and efficiency costs. In 2016, the Financial Times reported that the average return went through seven pairs of hands before being listed for resale, having to go through product retrieval, processing, cleaning, repackaging and readying for the market. The time this may take can lead to goods being out of season before they can be sold, resulting in discounts having to be given, profits reduced and costs rising.
In addition to the cost, reputation issues are also important. An efficient returns process is essential if the customer is to be retained – and it has to be perfect. A customer who is returning a product is already unsatisfied; if the company is to have any chance of retaining them, the process must be perfect.
HOW TO IMPROVE RETURNS MANAGEMENT
So how can the management of product return be improved? An effective behind-the-scenes system is critical. It is vital to have a system that can handle online product refunds (in part or in full), can set up return processing steps, and is simple to use. Any such system has to have both the customer and the return agent in mind, taking care of their separate requirements. All the required tools should be in one place within one returns management extension to minimise the costs of product returns and maximise efficiency, with – for example – otherwise time-consuming points automated to make the process as swift as possible.
⇒ When an agent receives a product return ticket, all the details should be available at that point – without them, effective action cannot be taken and the timespan starts to increase. A system would ideally put all the required details in one place on an all-in-one dashboard, including customer details, correspondence history, request owner and status, data on the returning product and the reasons behind the return, associated orders and other RMAs for the current order, and more. This should all be accessible through one interface with single clicks, making it much easier to promptly respond to a client, resolve a ticket and solve any problems.
⇒ Any tool must adapt to the requirements of the company. Custom processing steps are key, so that, for example, requests for further details can be issued, additional revisions made possible, individual parts of the chain (such as different stores) identified and so on. Importantly, any solution has to be scalable so that it is appropriate for any size of company or enterprise.
⇒ The system should allow the agent to organise and control the incoming RMA flow, with highly effective information management. In the first instance, the agent is notified automatically when a customer submits a product return request. With the information received, the agent is able to sort information in many different ways (such as by product, customer and return request number), determining the status of items at a glance, and importantly the status of the item’s packaging. This last item in particular is essential if products are to be swiftly pushed back into the inventory by the company and made available for sale.
⇒ Such systems should also be effective in keeping the customer informed and communication is essential. They need to be updated on the status of the return, with the process being made as transparent as practicable. Internal communication within the firm is also important and the system must cater for messages between multiple staff who may be working on the same product return ticket. Clearly though, this part of the system needs to be private for the company and not visible to the customer.
⇒ IT compatibility is important. A system that only half-works with other parts of the inventory management or financial software is not going to help, nor is one that takes staff weeks to become familiar with. For Magento store operators, any return management extension has to be fully compatible with the Magento store. This means that the system can be up and running within minutes of being integrated, allowing effective product return support to commence immediately.
REMEMBER THE CUSTOMER
From a customer perspective, the system must be simple and intuitive to use. This cannot be overstated; a complex system will drive customers away. It must also be able to be used by both registered and guest customers and – because it would be fully integrated with the Magento store – able to issue a reimbursement or refund online. The entire process must be as simple as is possible for the customer with the overall aim of encouraging them to shop with the company again. It is worth remembering, after all, that some 92% of customers would choose to make another purchase if the return process is hassle free, according to research by comScore.
So it really is important for companies to look at their returns management process and to see how they are able to improve them. Certainly some parts are likely to be through internal process tweaking but for the major gains, it is worth investigating the IT and Magento RMA tools that are available.