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.
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.
Fulfillment Managermemt System can give you a lot more leverage to execute customer returns quickly, accurately, and in a customer-friendly way.
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.
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.
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.
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.
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.
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.
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.
Automate Everything to Increase Efficiency
Vietful has successfully developed and provided E-commerce Order Fulfillment System which implement returns management to automate many aspects of their reverse logistics operations.
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:
Platform Communications
So many ecommerce platforms now have ways to automate many parts of the product journey. 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.
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.
OCIMI is a consulting partner and exclusive implementation unit of the Vietful Order Processing Solution in Vietnam. OCIMI is proud to have a team of professional staff with over 10 years of experience in the field, who can help your business optimize the fulfillment process in e-commerce comprehensively.
By applying optimization methods in a comprehensive fulfillment system, businesses can build a flexible, efficient fulfillment process that best meets the needs of the increasingly competitive e-commerce market
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