Have you been slammed with returns during this or a past holiday season? You’re not alone. In 2018, 13% of all the gifts purchased — or $90 to $95 billion in products — were returned after the holidays.
Besides the direct loss of sales from returned merchandise, retailers must account for costs associated with the time and manpower it takes to process the returned items. Another key consideration is customer satisfaction: A negative return experience is enough to prevent 64% of customers from making another purchase, reducing future revenue potential.
And, of course, there’s the unnecessary stress that poorly handled returns management adds to your supply chain.
To reduce this stress, minimize return-related costs, and keep customers happy, retailers need to begin preparing for post-holiday returns well in advance.
Set a Clear Return Policy
Return policies are often buried in website footers, but that doesn’t mean they’re not important: Nearly two-thirds of online shoppers will check a website’s return policy before making a purchase; and return policies are likely even more important to shoppers during the holidays, when they’re buying for people who may or may not like their gifts.
Vague and confusing return policies immediately raise a red flag for shoppers. Will they be able to return the purchased item if necessary? This doubt is likely to deter purchases, as similar items are almost always available elsewhere.
Transparent return policies, on the other hand, establish trust between your business and the customer. Clear policies will also help your support team know how to handle the rush of returns after the holidays.
Be Customer-Friendly and Flexible
Having a clear return policy isn’t enough — it also needs to be customer-friendly and flexible. Inconvenient returns deter 80% of shoppers.
In addition to clear information, the best year-round return policies often include:
- Refund information: How and when will customers receive their money back? (Keep in mind that refunding payment within 10 business days is becoming the norm.) Be sure to state whether you’ll be deducting a restocking fee, and for how much.
- The return process: How can customers return merchandise to you? Is a return merchandise authorization (RMA) necessary, and if so, what is the RMA process? Try to make the return process as clear and simple as possible.
- Free return shipping: Free return shipping is the most important element of a positive return experience. Including a prepaid shipping label in the box is best for hassle-free returns.
- Contact information: Who can customers contact if they have questions?
Retailers may want to be even more lenient during the holidays. For example, extending the period in which you accept returns from the standard 30 days to 60 or even 90 days can be beneficial, as people tend to be much busier during this time of year.
Unhappy gift recipients who don’t have gift receipts also appreciate options. Some retailers offer store credit for returns without receipts, and you could also send shipping labels and replacements to customers who received a defective product or need a different size or color.
Track Incoming Returns
For many customers, returning a product is like releasing it into a void: They don’t know where it is until they finally get confirmation from the company that it has arrived and is being processed. When money is on the line, this uncertainty regarding whether a package is en route or lost can be stressful.
Despite this pain point, only 7% of retailers offer return tracking, compared to the 97% that track package deliveries.
Tracking returns not only gives customers the ability to check the status of their returned packages, but also gives companies foresight into the quantity of returns coming in and the ability to choose the shipping company they prefer, potentially reducing shipping fees.
Return tracking is as simple as including a prepaid shipping label in all packages, which customers can either use or discard as needed.
Prepare Your Customer Service Team
The added pressure on your customer service team won’t end after the holidays, when customers will have questions about what and when they can return as well as the return process. To adequately prepare, you’ll need to ensure that you have enough support staff on hand and that everyone is thoroughly trained on your return policy.
Consider reviewing common occurrences, such as what to do if a customer doesn’t have a receipt or wants to return an item after the established return period length.
You’ll also want to make it easy for customers to reach your support team with omnichannel post-holiday support. Start with comprehensive FAQs to provide a quick resource, and then train your team in multiple types of support. Live chat tools, email, and phone are customers’ top three preferred communication methods.
[Related: Guide to Reverse Logistics]
Watch for Fraud
With so many returns coming in after the holidays, retailers are more likely to miss fraudulent returns. Appriss Retail’s 2018 Consumer Returns in the Retail Industry report estimates that 9% of holiday returns were fraudulent, costing retailers $6.5 billion.
Catching every case of fraud is impossible, but retailers can start by training staff to watch out for the most common types of return fraud:
- Returning stolen merchandise
- Using stolen or false receipts
- Wardrobing/renting (wearing and then returning purchased clothing)
- Cross-retailer returning (purchasing an item on sale from one retailer and returning it to a retailer that’s selling it for more)
- Price switching and arbitrage
- Employee-assisted returning
Prepare to Handle Incoming Merchandise Efficiently
No matter how much you’ve prepared by improving your return policy, tracking returns, or training staff, managing the physical returns as they come in — often referred to as “reverse logistics” — is no small task. Unprocessed returns take up space without bringing in any profit, so your team must be prepared to process items efficiently and accurately as soon as they arrive.
After issuing replacement products or refunds to the customer, your team will either need to restock, repair, or recycle each item:
A streamlined returns management process can minimize return-related costs, while an unorganized process can be both overwhelming and expensive.
Consider Outsourcing Your Reverse Logistics
The most effective way to ensure successful post-holiday returns is to outsource your reverse logistics. Hollingsworth offers full-service reverse logistics support with returns management, inventory control, and repackaging:
Outsourcing your reverse logistics also means that you can rely on fewer employees, have access to a larger and more convenient shipping network, and more effectively track your logistics.
The stress of post-holiday returns doesn’t have to be an annual occurrence. For more information about Hollingsworth’s reverse logistics services, request a quote today.