/Insights/eCommerce returns management: How is your business handling holiday returns?

eCommercereturnsmanagement:Howisyourbusinesshandlingholidayreturns?

Jan 20, 2024

5 min. read

With a solid returns management system, your business can save significant time and money, helping to maximize the revenue potential of this year’s peak sales season. In this article, we discuss the value of optimizing holiday returns processing, as well as how to improve your current setup for next year.

Did you know that roughly 30% of all products purchased online end up getting returned? During the holiday season, as droves of online shoppers browse the internet for gifts and other items at discounted prices, eCommerce businesses sell more, and therefore handle more returns as well.

But with a solid returns management system, your business can save significant time and money, helping to maximize the revenue potential of this year’s peak sales season. In this article, we discuss the value of optimizing holiday returns processing, as well as how to improve your current setup for next year.

So if you’re currently missing out on revenue due to a spike in returns, and are looking to upgrade your legacy system for next year’s holiday season, keep reading!

What is returns management and why is it important?

Ecommerce returns management—also referred to as reverse logistics—is the process of moving purchased products from customers back to their point of origin, typically because the item doesn’t match the description online, it's been damaged, or the customer simply no longer wants it. While every business has its own approach to managing returns, all systems inevitably involve communicating with customers, issuing refunds, conducting product exchanges, restocking returned items, and handling shipping and logistics.

Every successful eCommerce merchant understands the importance of a quality returns policy and process. With the right technologies and workflows, your business can optimize its returns management—not only cutting costs and saving time, but also maintaining customer loyalty and a positive brand image.

Here are some recent statistics to keep in mind when thinking about managing product returns:

67% of online shoppers will review your website’s returns policy page before making a purchase.

92% of customers will buy from your online store again if the returns process was easy.

79% of consumers expect free shipping when returning products.

How to improve your returns management system

A poor returns management process can result in frustrated customers, negative online reviews, inefficient workflows, and lost revenue. With the number of online shoppers increasing every year, reigning in the returns process will play a key role in your business’ success—especially during the holiday season.

Let’s take a look at some of the best ways to improve eCommerce returns management.

Eliminate controllable returns

There are two types of product returns: controllable and uncontrollable. Controllable returns are ones caused by avoidable factors, such as misleading product descriptions or images, wrongly-shipped items, and poorly packaged products that result in damage. These are the kinds of issues that cause brands to lose customers and credibility. Uncontrollable returns, on the other hand, happen through no fault of the seller. This includes situations where a customer decides they no longer want or need the item, or if the purchase was made by mistake.

Eliminating controllable returns starts with reevaluating your company’s management of its products, inventory, and fulfillment. With an advanced, well-integrated product information management (PIM) solution, you can ensure that all product detail pages across all your business’ sales channels are always updated with the correct images, descriptions, prices, and so on. And with reliable third-party fulfillment, you can avoid delayed shipping, damaged items, and other factors that hurt the customer experience.

Highlight your returns policy

Many consumers prefer to gain a full understanding of a company’s returns process before making a purchase. Your policy should answer any questions they may have, such as: Is the customer responsible for covering return shipping costs? Will the merchant provide a shipping label? Can the customer drop the returned item off at a physical store? In what scenarios would the customer receive or not receive a refund?

To help consumers feel comfortable shopping with your brand, make sure the returns policy is easy to find on your website. It should also be simple to read, well-formatted, and free of any typos or long paragraphs. Finally, include a support email address and/or phone number, so that customers can contact a representative if they have any questions.

Provide transparency throughout the returns process

Once a return has been initiated, today’s online shoppers expect regular status updates and confirmations via email or text. They want to know if and when their refund is being processed, as well as how long it will take for their replacement item to arrive. During the holiday returns spike, it’s imperative that your business has enough trained staff to keep up communication with these customers. Multi-day customer support wait times may dissuade customers from returning for future purchases.

Analyze eCommerce returns

It’s important to collect as much information as possible around eCommerce returns. By asking customers for feedback, you can better understand the strengths and weaknesses of your returns system. And with enough data, you’ll begin to identify patterns that will inform necessary changes to your policy and process. Perhaps your product detail pages aren’t clear enough, or your solution for processing refunds isn’t fast enough.

Through returns data analysis, you may also discover that your business is being targeted by “serial returners.” These are customers who regularly purchase items from online retailers with the intention of eventually returning them. Some serial returners engage in “wardrobing,” which means they purchase multiple similar products—typically clothing items—from competing brands, decide which ones they want to keep, then return the rest. Others initiate returns in order to take advantage of discounts, coupons, and store credit that brands often offer to unsatisfied customers. Your business should have a strategy for identifying and dealing with serial returners—as this kind of activity can have a serious impact on your bottom line, especially if you’re covering the shipping costs for each return.

Automate the returns management process

By implementing AI solutions and other innovative technology, you can automate certain aspects of the returns management process—saving time and money, while also driving efficiency and a competitive edge for your business. In fact, many of the tasks discussed above can be automated through various third-party integrations, including:

Setting up automated emails that send updates to customers once a return has been initiated.

Adding chatbots to your site that are programmed to answer basic questions customers may have about your returns policy.

Implementing machine-learning tools that are trained to identify and report serial returners.

Automation technology will improve the scalability of your business as it expands its customer base and processes an influx of returns this holiday season.

Team up with Codal for superior eCommerce returns management

A solid eCommerce returns management system—backed by advanced software and data analytics—can help your business stay on top of holiday returns, maintain customer loyalty, and drive revenue. With over a decade of experience working with eCommerce companies, Codal understands the technologies and workflows necessary for minimizing returns and maximizing operational efficiency. We can integrate returns management software and other tools into your business’ ecosystem, while also uncovering new opportunities to save time, money, and effort through AI and automation.

For example, our client GOREWEAR , along with its sister brand, Sitka—both providers of innovative outdoor gear—were struggling to scale because of an arduous returns process, along with many other pain points in the customer journey. By migrating the business to a new eCommerce platform and building a fresh system architecture, Codal gave GOREWEAR and Sitka the tools they needed to optimize their customer experience and accelerate productivity. In particular, we built a user-friendly returns portal for Sitka that streamlines the entire returns process for both customers and employees.

Topic

Unified commerce

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