The returns management process involves handling returned products from customers. The business inspects the product thoroughly and then decides whether to restock, refurbish, or recycle it based on the product’s condition.
Indian ecommerce is experiencing rapid growth, especially after COVID-19. The market is anticipated to reach almost $350 billion by 2030. Most ecommerce businesses focus on forward logistics and last-mile delivery to improve customer satisfaction and brand popularity. Unfortunately, most of them don’t give importance to return management services.
Research says 30% of online-purchased goods are returned to the business because of damage, improper items delivered, or poor quality. Customers get disappointed if a brand has complicated return management. 90% of customers will always purchase from a brand with a simple return management process.
What Is the Return Management?
The return management starts when an unhappy customer requests a product return to the Company and asks for either a refund or an exchange. The Company further arranges and collects the product from the end buyer. It is brought to the warehouse and inspected thoroughly. The Company decides whether to repair, refurbish, or recycle depending on the product’s condition. If the product is in good condition, the staff restocks it on the warehouse storage shelf again. The entire process is tracked through software solutions. The end buyer finally receives the brand’s refund, exchange, or store credit.
B2C Returns Management
The B2C return management process includes all the procedures involved when a customer wishes to return a product ordered from the Company. There are usually 5 elements of the B2C return management process. Here is a list of them below.
1. Return Initiation
The customer likes to raise a return request when he does not like the ordered product. There can be numerous reasons behind it, like improper packaging, poor quality, wrong item delivered, defective product, and many more. The customer raises return requests on the order tracking page or by contacting the Company’s customer care. The customer has to mention the reasons for placing the return request. The Company even asks customers to issue a refund or a replacement, and customers choose accordingly.
2. Acceptance Or Rejection
The Company will either accept or reject the product return request depending on the reason mentioned by the customer. The customer will immediately get a notification about the approval or disapproval of the return request.
3. Pick Up And Product Inspection
The Company will provide the expected date on which the returned item will be picked up from the customer’s doorstep. It’s quite challenging for the brand to manage both forward and reverse logistics; hence, some brands outsource this work to third-party logistics providers. The delivery partner will inspect the returned product and inform the brand.
4. Product Goes To Warehouse
The returned product then moves to the warehouse or storage facility. The product then goes through a strict quality assessment, and the staff decides whether to refurbish, recycle, or repair. If the product is in 100% good condition, then the staff restocks it so that it can be resold in the future.
B2B Returns Management
The B2B return management process is more complicated than the B2C one because of the large volume. Here is a step-by-step guide on the B2B return management process.
- The B2B customer files a return merchandise authorization form and informs the seller about the return of the goods. The seller reviews the form and decides whether to approve or reject the return request.Â
- The seller provides an RMA number if it accepts the return request. It even shares guidelines on shipping and packaging.
- The products are picked up from the B2B customer and are shipped to the B2B seller. The seller further verifies the quantity and condition of the product thoroughly and assesses whether to restock, recycle, or repair.
Importance of Returns Management Service
Today, return management plays a vital role in business, mainly in the ecommerce and logistics industries. The Company needs to optimize the entire return process to enhance customer satisfaction.
Today, most customers prefer to do online shopping. Researchers have anticipated that 86% of online shoppers expect an easy return process from a brand. This explains the importance of return management.
The return management process plays a significant role in popularising a brand and making customers happy. Customers usually get disappointed if they have to wait longer to get a refund or are unsure about the return of any damaged product. Returns must always be as straightforward and quick as possible to make customers happy.
Benefits of Managing Returns
Streamlining the return management process offers several benefits. Let’s explore them below.
1. Strong Customer Relationships
A well-managed return process can enhance customer satisfaction and encourage customers to purchase from the same brand repeatedly.
2. Competitive Advantage
When a business has a simple and easy return process, it becomes distinguished from its competitors. This can ultimately increase the market share of the brand.
3. Reduce Fraudulent Items
Sometimes, customers claim false reasons and try to return a product to the brand. An efficient return management process will carefully check the returned products and accept only valid returns.
4. Sustainability Initiatives
A business can recycle or repair the returned product instead of throwing it directly into the environment. This reduces wastage and has a good impact on the environment.
5. Increases productivity
Streamlining the return process allows staff to dedicate less time to managing and handling returns. They can use that time in other core business activities, like product development, which enhances productivity.
6. Risk Mitigation
When a business manages the return process efficiently, it can identify the primary reasons for customer dissatisfaction and take corrective actions accordingly.
Challenges in Returns Management
Managing the return process sounds simple and easy. But it brings a few challenges for the business. Here is a list of a few challenges enterprises face in the return management.
1. Logistics Complexity
Moving returns back to the fulfillment center brings various challenges. It requires coordinating numerous activities like shipping, item inspection, refurbishment, and inventory management. Businesses need to find a robust solution to streamline the returns.
2. Customer Expectation
Today, most customers expect hassle-free returns with quick refunds. If the returns management process becomes slow for some reason, then it dissatisfied customers.
3. Data Management
Identifying the common reasons for returning products requires proper data management and analysis. A brand may miss improvement opportunities if it does not analyze data properly.
4. Environmental Concerns
Improper return handling can cause a lot of wastage. Hence, most businesses are under pressure to manage returns that will not cause any harm to the environment.
5. Quality Checking
Each returned item must be inspected thoroughly to decide whether it needs to be restocked, discarded, or recycled. Identifying all these things will require a lot of time, skilled staff, and extra resources.
Best Strategy for Effective Returns Management
Below, we list a few tips for effective return management.
1. Collect And Do Analysis Of Return Data
The business must invest time in finding out the reasons for product return. They can use automated return management solutions to track the product with the highest return rate. For example, if it’s due to improper packaging, the business can improve packaging to reduce returns.
2. Proper Design Of Return Management Workflow
Proper return management design reduces a customer’s time to initiate a return and get a refund or replacement.
There are various ways by which businesses can increase the efficiency of their return management. Here is a list below.
- The business needs to have a clear return policy.
- The customers can track the returned products every time.
- The business needs to issue a refund on time.
- The business needs to offer free return shipping.
3. Write Return Policy Clearly
The business must have clear return policies and share them with its customers.
The return policies should clearly state the following things.
- Return timeline(7 days, 15 days, or one month)
- Condition for return
- Time is taken to process a refund
- Options for receiving a refund
4. Automate Return Management Process
Businesses can automate the return management process to reduce warehousing costs. For example, it can integrate a return merchandise authorization system to handle return requests. It will generate an RMA number, which customers use for tracking.
5. Outsource Return Management Process
Managing the return may be complicated and expensive for specific businesses. They can outsource the return process to 3PL logistics. The 3PL Company will pick up the ordered product, do inspections properly, and decide whether to restock, recycle, or repair. It allows sufficient time for businesses to focus on core activities like product development and market exploration.
Latest Technology and Software for Returns Management
- AI And Machine learning can make return predictions based on customer behavior.
- Warehouses can use autonomous mobile robots to sort return goods.
- AI chatbots can help customers raise return requests by website live chat or Whats app.
Final words
Return management is an integral and unavoidable part of the order fulfillment process. A well-managed return process can enhance customer satisfaction and improve the Company’s reputation in the market. Customers will make repeat purchases from a brand with a streamlined return management system. However, it has some challenges, like data management and logistics complexity. It can overcome these challenges by leveraging advanced software, writing clear return policies, and outsourcing return management operations to a 3PL.
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