Looking for ways to make 2022 the best year yet? A new year means new opportunities to embrace faster, more efficient returns. By encouraging faster returns, retailers are more likely to recoup the cost of the item and expand available inventory for future purchases. And, a streamlined returns flow is critical, given around 13% of online purchases are returned.
Here are five New Year’s returns resolutions that can help retailers speed up their reverse logistics process in 2022.
The earlier merchandise can be returned to inventory, the more likely it is to be sold at, or close to, full price. Here, a tiered approach to a flexible return policy is a tool for balancing customer expectations with a retailer’s financial considerations. Retailers can still offer a longer return window—a popular VIP return offering—while making earlier returns compelling.
For example, Saks Fifth Avenue offers free shipping on returns initiated within 14 days of the ship date, and deducts $9.95 from a customer’s refund to cover shipping on returns initiated after the 14-day window. Sephora takes a different approach, offering credit back to the original form of payment for returns received within 30 days of purchase, and store credit for items received between 31 and 60 days of purchase.
The value proposition is clear: customers who make early returns get more money back.
Customers want convenience. That means retailers need to create solutions that don’t involve boxing returns, printing labels, and finding a post office or a shipping center.
Engaging a broad network of return locations is a natural progression beyond the traditional third-party carrier return process. Amazon has offered this service for years, leveraging a partnership with Kohl’s and its acquisition of Whole Foods Market to utilize brick-and-mortar stores as return drop-off points.
Narvar Concierge has established a similar network of return drop-off locations for retailers like Levi’s, Anthropologie, and Athleta. Concierge offers customers the option to make returns at Walgreens, Nordstrom, Simon Malls, and Mall of America—a network of more than 9,000 return points nationwide.
Boxless returns are another alternative. Traditional returns require a box, a printed label, and packaging tape. All three elements can present obstacles for the customer. They may have discarded the box, or run out of packaging tape. In many cases, they don’t own a printer, and pandemic-related work from home policies mean they don’t have access to an office printer to create a return label. Boxless returns through The UPS Store make it easy. Store associates scan a QR code from the customer’s smartphone and accept the return—no packaging required.
The fastest option, however, may be picking up returns directly from a customer. Home pickup lets customers schedule a courier to retrieve the item, resulting in 30% faster return times and sky-high net promoter scores. (Brands that use home pickup often see perfect NPS scores.)
Where should returned merchandise go? To a brick and mortar store? Back to a distribution center? Perhaps the customer should keep the item and get a refund?
Selecting a destination for returns should be a proactive business calculation for retailers. Some retailers prefer to reduce shipping costs by accepting returns at their brick and mortar store locations; others rely on distribution centers for assessing damage and repackaging. Then there’s the idea of keep-the-item returns: offering customers a refund and allowing them to keep items for which return shipping or processing costs exceed the value of the item.
There’s no one-size-fits all solution, but retailers can use their online return portal to encourage the behavior they want to see from customers. For example, if an in-store return is preferred, a retailer could charge a nominal return shipping fee to dissuade customers from mailing an item back. Even if they’re offering free return shipping, retailers could encourage in-person returns by offering curbside returns or simply by listing “return to store” as the first option in the return menu.
Whichever approach a retailer chooses, communication is key. Return policies and procedures should be clearly explained on a retailer’s website, as well as in order confirmation and return merchandise authorization (RMA) emails.
Smart processes save retailers time and money. On the customer service side, investing in an automated, branded returns portal streamlines the process for customers, and gives representatives bandwidth to deal with more complex issues like lost packages and quality control. For the customer, an automated return process creates an instant gratification, letting them handle the return on their own schedule. Customers who have to wait hours or days for an RMA to trickle through a service queue are less likely to be happy with the experience.
On the fulfillment side, make sure your warehouse team knows how to process returns quickly into your inventory management software (IMS). Quick processing is important for two reasons. First, adding merchandise back into the flow of commerce increases the chance that it will be sold. Second, customers want their money back: Processing returns and refunds as soon as possible will increase your customer satisfaction rating.
Most retailers ask customers to choose a reason for their return when initiating a return online. That data can be useful in identifying trends, updating product descriptions, and making future inventory decisions, so use the new year as an opportunity to audit and upgrade your “reason for return” options.
According to Narvar’s 2021 State of Returns Report, the most common reason for returns is fit—a reason generally accounted for in a returns menu, along with color, quality, and changed mind. But “doesn’t fit” is an overly broad term that doesn’t explain if the item was too big or too small. The first step in a retailer’s reasons for return audit should be fleshing out the reason options in a way that can inform product descriptions and business decisions.
A fashion retailer, for example, might include the following options in their reasons for return:
With that information, a retailer can determine if there were quality control issues that warrant changes in manufacturing partners, and whether the product description or photography should be updated. By including the option of “purchased multiple items,” retailers can determine how many customers are bracketing. And, by allowing customers to select more than one reason—instead of only the best reason—retailers can gather more data points to shape future decisions.
Customers want a generous return policy, hassle-free shipping options, and quick refunds. Retailers want to build customer loyalty, increase revenue, and minimize the need for returns. Creating New Year’s returns resolutions is an exercise that can make both customers and retailers happy.
Catherine is VP of Marketing at Narvar. Prior to joining, she worked for a number of AdTech & MarTech companies, transforming marketing teams into growth catalysts.