Opportunities or Catastrophes?

How your returns look to you will depend heavily on how you are already approaching their handling. Do you just toss them in the corner in the hopes that they’ll go away? Do you send them off and take whatever pittance someone will pay you? There are better ways to go about managing these returns…and getting more out of the process overall. You can take those returns and squeeze some value from the formerly unwanted items.

This is an opportunity to:

• Practice great customer service. Whether you see it this way yet or not, your reverse logistics arm is an extension of service after the sale. Your customer is unhappy, so you make it right. When you do it spectacularly, with little friction and a lot of speed, you’ve got a brand ambassador in the making.
  
• Increase transparency in your supply chain. For returns management to be successful, you’ve got to know where those returns are at any given moment. This is a great excuse to increase transparency between your departments and vendors.
  
• Upgrade processes and systems. There’s a good chance that your current system isn’t really equipped for the influx of returns that you’re seeing these days. It’s a normal growing pain for companies that are scaling. Now is the time to gather your data and use it to determine where to spend a little money so you can save a whole lot on returns.

Just because you take your opportunity where you can doesn’t mean that your reverse logistics efforts will immediately start to pay off. It can take time to get things just right, but at the end of the tunnel are proven benefits.

“Our investment in new processes and technologies was calculated to have an ROI of 7.5 months but was met in two months,” Stephen Fulghum, Device Logistics and Procurement Director for U.S. Cellular wrote in CIO Review. “Revenue recovery rates easily doubled in some cases, but in most cases saw no less than 10 percent improvement. Revenue recovery percentages continue to grow today as cycle times continue to lessen… [o]ur revised strategy and vision certainly enabled us to plan for the future, but as importantly, executing with excellence resulted in changing product returns from an expense driver to a lucrative, profit center.”

Even if your returns are a huge anchor around your neck right now, they can represent opportunities over the longer term. Just remember to take every chance you can to use them to increase your customers’ happiness while maximizing the value you can get from those returned items.

The post 3 Ways Returns Represent Opportunities, Not Lost Revenue first appeared on Smart Returns.

But what happens to your returns when you use a returns management company?

Your Reverse Logistics Team Working for You

There are lots of options when dealing with customer returns. That may be the biggest benefit of working with a company that specializes in reverse logistics. It can ensure that you have many avenues to handle the ever-flowing stream of merchandise that ends up back in your possession.

Some of the more common avenues include:

• Return to inventory as is. If that wrong-color shirt is returned quickly and still in its original packaging, there’s nothing that stops you from adding it to existing inventory right away. The faster, the better.
• Refurbish and return to inventory. Items that arrive DOA or have a particularly bad quirk can sometimes be salvaged by refurbishers. You’ll have to pay a bit extra to bring these goods back to life, but if there’s a healthy market for them, you may find you’ve recaptured a lot of value.
• Redirect to liquidators. If you just really don’t want to deal with returns, you can always have your returns management team package them up and send them off for liquidation. Other companies buy these pallets and then resell the individual items inside. Often, the pallets are grouped by item type, so all your electronics would be packaged with the electronics from other stores, too.
• Strip and recycle. Again, depending on what it is that you’ve sold and had returned, you may find a revenue stream in stripping your items down and recycling them. Electronics, in particular, contain a variety of materials that recycle readily. Not only will you get a little bit of money for the precious metals that come from your recycling effort, but you’ll also be able to brag about your commitment to the environment.
• Disposal. Ultimately, some items will not be salvageable because they’ve expired or are otherwise totally impossible to sell. It’s not always as simple as calling in the garbage collectors, though. Many products require special handling and disposal so as not to harm the environment.

The good news is that you’re in control of what happens to your returns. If you want to focus on long-term sustainability, you may opt to remain as green as possible and fix anything that’s fixable, recycle what you can of what’s left and carefully dispose of the balance. For companies that just want to move products out of the way and write the loss off, liquidation auctions are a quick and dirty solution to a problem that continues to plague the eCommerce segment.

The post What Happens To My Customers’ Returns After The Return? first appeared on Smart Returns.

With customers demanding more free stuff, from free shipping to free returns, and wanting a more transparent shopping experience, the time is coming when wide swaths of the eCommerce industry may crack and fall down. Because those online retailers that can follow a certain giant Internet retailer’s every move, you can be certain that things will only go from bad to worse for them until they find a way to keep their costs down, including the cost of transporting their goods back and forth from consumers.

Tempering Expectations

Leaders in the business community have explained that “keeping up with the Joneses’” as the main reason that online retailers have gotten in so deep. There’s some merit to this argument, though the Jones family this group is envying happens to have an incredible amount of capital backing it.

If your business is struggling to keep a hold on your costs while ensuring super customer approval, give these tricks for keeping your costs down a try:

• Enact minimums and maximums. Some people refer to this as “putting rails” on the thing in question, but regardless of what you call it, it’s a good strategy. For example, tell customers there’s no free shipping below a certain threshold and same for returns. You’re not taking back a $2 top and paying for the shipping. Figure out where your break-even point is and strictly enforce it.
• Try membership fees. Free shipping and returns? Sure. But it’s going to cost you. Increasingly, companies like GrubHub and InstaCart are creating loyalty programs that give the member a break on fees in exchange for a flat monthly charge. You can do this, too. Just make sure your numbers are on point or it could cost you a lot more than it saves.
• Invest in your catalog. Online or off, people want to know that what they’re getting is what they expect. Too often retailers skimp on things like product descriptions and images that give the shopper a complete picture.
  All that savings in production ends up costing a fortune in returns and the manpower to process them. Instead of getting the cheapest writers and photographers ever, invest more in your catalog and you won’t have to worry about free returns eating up your overhead.

Keeping costs down across the board should always be your goal, but with a view to the long distant future. It’s not enough to say “no more free returns” or “shipping isn’t included,” you have to figure out what’s causing all of these returns and then address it as well as you can.

Whether that means better product pages on your end or more buy-in from your customers in the form of membership programs, there’s a serious danger in eCommerce today. Don’t try to be a company that you’re not, because that’s doomed to fail. Instead, focus on your own customers and what they want and need from your relationship to help keep your costs down.

The post Keeping Costs Down In The Era Of Free Returns first appeared on Smart Returns.

As Goes Amazon Goes the World

Unfortunately, customers are growing increasingly used to the way Amazon does business. Even though it’s a behemoth in its sector, there’s an expectation that even small eCommerce stores should follow in its path. This is known as the “Amazon Effect” and it absolutely impacts everything in the eCommerce world, from how packages are shipped to how the supply chain handles reverse logistics. But Amazon isn’t the only force influencing the rise of free returns across the eCommerce space. These trends are also raising the stakes:

• In-store Returns. Ordering online once meant having to return products through the mail. For many retailers with eCommerce divisions, the cost and hassle of mailing things back has been replaced by free in-store returns. These free in-store returns also allow customers opportunities to see what’s new and what’s on sale in the shop, spurring more purchases.

• The Explosion of eCommerce. eCommerce isn’t perfect, sometimes the blue shirt that a customer thinks they’re getting turns out to actually be black, or worse, green!
  Not being able to inspect products in person means that products may fall short of expectations, necessitating a return or exchange. Of course, customers are quick to blame the shop for not giving them a better way to judge the item, but they will generally accept returns with free return shipping for their trouble.

• Customer Demand. Even before there’s a problem with an order, customers are demanding free return shipping as a prerequisite to purchase. According to a Dotcom Distribution survey, a third of customers will only buy if there’s free return shipping offered. More than 90 percent of those same respondents say that free returns is very influential in where they ultimately purchase.

Just like free outbound shipping was once high stakes, the idea of free returns shipping for everything is becoming a live or die issue for eRetailers. Customers seem to want to treat eCommerce stores just like those in the real world, where they can breeze in and out, sampling merchandise and returning almost anything without paying as much as a restocking fee (remember those?).

eCommerce retailers have to continue to do their very best to keep up with these trends. Even if you can’t offer free return shipping, many consumers are willing to pay a small shipping fee when there’s a lot of transparency involved and you move quickly to process their returns.

The post 3 Trends Pushing The Rise Of Free Return Policies first appeared on Smart Returns.

Reverse Logistics can be a Value Add

Plenty of customers will tell you that they won’t buy anything from an eCommerce store that doesn’t offer some form of free and fast returns. If your returns policy is confusing, that’s another big issue. Having clear, transparent reverse logistics, however, can influence the most discriminating customers. The bigger issue is how to make this additional expense work for both you and your customers at the same time.

You can be sure that returns work better by:

• Identifying customers likely to return items. It may feel awful, but many large eCommerce retailers are starting to invest in technology that can help them identify chronic returners.
  In some cases, these people have their account closed after a warning about their shopping habits, in others stores simply stop allowing free returns shipping to discourage chronic returners from sending so many packages back on the store’s dime.
• Including smart labels with every order. When you’re paying the shipping costs, you might as well make everything a little easier. Make sure every order comes with a smart label addressed to your reverse logistics facility. This way that team can be prepared for what’s coming each day. Flow control is challenging for returns management because products arrive in all kinds of conditions, even their potential volume is unpredictable. Smart labels speed up returns and credits, making everyone happier.
• Having disposal plans already in place. Even if you’ve never had to send products to be refurbished or recycled, it’s a good idea to have your returns management team cultivate those relationships now.
  Planning for disposal ahead of time will make sure that your products that can be sold bring top dollar, plus it’ll keep the mess in your facility to a minimum since you’re not waiting around for a contract before sending those unsellable items off.

Returns management is not only a big topic of discussion in the supply chain today, it’s also a way to build better relationships with your customers when it’s running well and includes a lot of transparency. After all, your customers are happiest when they know what’s going on with their orders, even if that order is on its way home to you.

The post 3 Ways To Make Return Management Services Work For You, Your Customers first appeared on Smart Returns.

Holiday sales tend to create a surge of product sales, followed by a tsunami of returns from gift recipients who would have preferred that shirt in orange or the higher powered flashlight that you also offer for sale.

The entire concept of holiday returns can be overwhelming, but you can navigate the reverse logistics it takes to survive.

Approach Returns Management with Care

Reverse logistics can be incredibly costly for companies that aren’t making it a priority.

Instead of being able to recover some amount of the cost of the product, it turns into a situation where it’s just cheaper to let returned items gather dust. Your next holiday return rush will be different, though, because you’re going to be more prepared and have a new approach, like the following, in place:

• Creating a dedicated returns team. It might seem like a big expense now, but when a holiday shopping season comes around again, a team that does nothing but reverse logistics can more than pay for itself.
  Instead of waiting until sales taper off to handle returns, your dedicated team can get those items back on the shelves while inventory is being sold rapid fire. That means more money for you and a higher return on products.
• Tracking returned items individually. Fraud is an unfortunate issue within the reverse logistics orbit. Although most consumers are honest, a few will try to game the overwhelmed system by sending low value items back in high value boxes or worse. Tracking can help you deal with these issues, but it’s also a great way to open up communication between you and an honest returner. They can see where their item is in the process, so they know when to expect a refund.
• Monitoring reasons for returns. The earlier you start monitoring the reasons given for returns on each item that comes back, the better off you’ll be. Since eRetail products are at a disadvantage because they can’t be tried on, held or generally examined in real life, customers have to make some assumptions to fill in their knowledge gap.
  If you give them the right information, they’ll do that successfully and love their orders. If not, you’ll see a lot of returns. Keep your eyes on the returns and audit any item that seems to be being returned more often than other products like it. This practice can help curb those expensive returns, so don’t wait any longer to get started!

Reverse logistics isn’t easy on a good day, there’s a lot to know and plenty of changing gears required to get the job done. Having a plan of attack in place before big holiday shopping seasons can help ease the pain, though. No matter how you intend to handle your next batch of holiday returns, the most important thing to remember is to keep your customers informed. This simple act can help create a customer relationship that lasts.

The post No Matter What The Holiday, Here Are 3 Approaches For Navigating Holiday Returns first appeared on Smart Returns.

For online retailers, as much as 30 percent of your sales may ultimately come back. There’s no single solution to help slow the bleed, but you can make the best of your returns management and focus on how good reverse logistics pay you back right away.

Customers Love Good Reverse Logistics

Returns are inevitable, so you might as well use them to build a stronger relationship with your shoppers and inflate your reputation as a business that’s easy to work with.

According to ComScore, about 63 percent of customers review your returns policy before making a purchase. If your policy is lacking, or you’re lacking a policy, it can spell disaster. But, for brands that have customer-friendly returns policies, these are a few of the ways they can pay you right back:

• Improving customer goodwill. The customer experience is everything these days. After all, your products are likely also sold by other vendors, so you have to have something extra that makes people want to use your business above all others.Giving customers a good experience by throwing in little things like smart labels or instant refunds can be a huge thing, even enough to create lots of enthusiastic brand ambassadors.
• Fueling future purchases. Any time a shopper uses a new shop, they’re hesitant, especially if the vendor is more clicks than bricks.If your first order doesn’t go exactly as planned, but you make it right quickly and with no roadblocks, those customers will be more comfortable buying from your shop in the future. And they’ll tell their friends that you can be trusted. It’s a big deal for a little reverse supply chain magic.
• Getting products back to resell. When your returns policy is easy for the customer, you can count on recovering more money out of each item that’s being returned.Items that arrive back at your facility in perfect condition because they arrived in the wrong color, for example, can immediately go back into inventory, giving you another chance to sell them for full price. Items that aren’t as perfect will still recover more of their value the sooner they’re sent back to you because they’re still in style and up to date.

Good returns mean good business and lots of goodwill between you and your customers. If you don’t have a dedicated reverse logistics team, there’s no time like right now to add one to your supply chain. Your favorite 3rd party logistics companies often offer returns management for less than you would pay an in-house team and they’ll handle those returns per your specifications without having to be trained from scratch.

The post 3 Ways That Good Returns Pay You Right Back first appeared on Smart Returns.

These merchants regularly see returns rates of around 30 percent, even when they’re doing everything right. It has little to do with the merchant and a lot to do with their customers, namely the “Serial Returner.”

What is a Serial Returner?

Serial Returners are people who return a lot of stuff.

But this isn’t the regular sort of “wrong size, wrong color” return, instead they frequently purchase additional sizes, colors or models of an item so they can choose the best from what they receive and send the rest of the lot back. They’ve become such a problem for the retail industry that many retailers are considering such extreme measures as lifetime bans on customers who purchase items with the intent of returning them.

It’s not that companies want to have customer-unfriendly policies, but all of these returns are having a serious impact on industries from retail to logistics from their sheer volume. According to research by ERP firm Brightpearl 42 percent of U.S. retailers have seen an increase in serial returners in the last 12 months.

Would You Know a Serial Returner?

One of the biggest reasons that retailers continue to lose money to serial returners is because they lack the technology to properly identify them. Almost 60 percent of the retailers that participated in the Brightpearl survey said they lacked the technology to properly identify customers who were abusing the system.

Those that can, though, are taking serious steps to curb the Serial Returners among their customer base. Amazon has famously started closing accounts of Serial Returners without notice, while LL. Bean announced that it was ending its century-old “no questions asked” return policy. A full quarter of those retailers surveyed by Brightpearl said that they believed a lifetime ban for these shoppers was necessary to protect their margins from eroding further.

Even consumers themselves are for banning Serial Returners. According to the same survey, 58 percent of shoppers support bans on troublesome buyers. Only seven percent outright decried the practice.

Protect Your Company From Serial Returners

There’s no way to totally avoid Serial Returners, but you should have some methodology in place to identify customers who are likely Serial Returners, even if you do the full review manually. It’s the very best way to protect your bottom line from unnecessary returns.

“In today’s consumer-led retail environment, intentional returning could spell disaster for retail business owners if they do not have visibility over regularly returning customers,” Brightpearl CEO Derek O’Carroll explained in a statement. “Without this, retailers will struggle with the definition and consistent application of their returns strategies—and could face a resulting backlash from shoppers.”

The post What’s A Serial Returner + Do You Have Any? first appeared on Smart Returns.

Whether your company sees a lot or just a few returns, it’s important that your returns process be as good as it can be. This helps eliminate waste and increases customer happiness, leading to more sales over the long run.

Your Returns Process Can Be Better

How long does it take your returns management team to go from receiving a package to having fully processed the return?

Chances are good that they could be doing it a lot faster, no matter how well they’re doing now. But you can’t expect reverse logistics to magically fix itself, instead you’ll need to put some effort into it. 

Here are five surefire tips for better returns:

• Have a clear returns policy. Customers and potentials tend to look at returns policies before they buy anything. Even if they make a purchase first, they’re going to go straight to that page when they discover that their item was mispicked, wasn’t what they expected or that they simply didn’t want it when it arrived.Your returns policy should be clear so that both of you understand what’s to be done about this issue. The less you can leave in the gray, the less likely you are to have a shopper who firmly believes the returns policy is in their favor and you weren’t fair when you denied their return.
• Maintain open communication with the returner. You don’t have to personally call or email the person returning an item, but sending automated messages as their item moves through your returns process really helps keep consumers happy. They just want to be able to check their status and know when their credit will post.
• Take advantage of smart labels. Smart labels help your reverse logistics team know exactly where the items being returned are and when to expect them. This can help them better plan for and organize incoming items, removing some of the chaos from the equation that is reverse logistics and generally speeding up the whole process.
• Reprioritize the processing of credits. If you generally process credits after your people have finally chosen a route of disposal for the returned item, try instead to have a quick inspection of the item up front that allows you to immediately issue a credit. Your customers will be happier, more likely to buy again because they don’t wait forever for their money and your reputation will grow from word of mouth.
• Constantly strive for improvement. Choose data points and monitor them religiously. When you can automate a process, automate it.If you can speed up the disposal or restocking of items, you may be able to improve your return on them. Every little change can make a big impact. Constantly strive for improvement throughout your returns process and it’ll help your bottom line and your customer experience at the same time.

You’ll never lose by trying to improve your returns process. It may seem like throwing a lot of good money after bad, but the truth is that you’re building goodwill and customer loyalty, along with recovering some percentage of your cost. Keep the customer experience in the front of your efforts and your business will thrive.

The post 5 Surefire Tips For A Better Return Process first appeared on Smart Returns.

The organization is looking at total sales of $717.5 to $720.9 billion, a 4.3 to 4.8 percent increase over last year, which itself was a 5.3 percent increase over 2016. Retailers everywhere, even those in cyberspace, are bracing for impact. They’re predicted to be hiring around 650,000 holiday workers, 11 percent more than last year.

But Are Retailers Investing Enough?

With all the preparation for the oncoming sales storm, it would seem that retailers are one step ahead. Unfortunately, they may not be. Many aren’t saying what they have planned for National Returns Day, the unofficial designation UPS has given the day it handles the most returns each year in early January.

Last season, January 3, 2018 meant 1.4 million return packages sent through UPS, with 1 million returns expected each day leading up to Christmas 2017. If that doesn’t scare you, then you’ve got a top reverse logistics team in place already. You are ready.

But for retailers who haven’t thought about what they’re going to do when up to 30 percent of their sales come back in early January, it’s not too late to invest more in returns.

Can Your Team Handle It?

It’s not a defeat to admit that your small company’s returns management team is going to be overwhelmed come National Returns Day.

Instead, today is the day to start planning for extra help. That might mean expanding into your empty warehouse so there’s more room for returns processing by more people, or it could mean working with a reverse logistics company.

This vital member of the supply chain doesn’t get the attention that forward-facing logistics does, but it’s just as important. Maybe more so. After all, reverse logistics is all that stands between you and chalking all those returns up to a complete loss.

Reverse logistics examines each and every product that comes through the warehouse, then optimizes its disposal or re-use. What can be sold for full price is rushed back to the sales floor or warehouse inventory. Those things that can be largely recouped will go to a secondary liquidator or auction platform. What can be recycled for the going rate is sent away for the procedure.

At the end of the process, the goal is to return as much money to your ledger as possible, while minimizing waste. It’s a fine line to walk, but one that can be a game changer for your retail company this year.

The post Are You Investing Enough In Returns, Returns, Returns? first appeared on Smart Returns.