How to Set up Your Product Return Process

Nearly one-third of all items purchased online are returned. The good news? Ninety-six percent of customers say they’ll buy again, if they’re satisfied with the product return process. 

Developing a streamlined system for returns is essential for keeping customers happy; it’s a major contributing factor to both the profitability and longevity of your business. And given that 67% of consumers check the returns page before buying, it’s something you’ll want to have fully fleshed out on your website.  

Here’s how to set up your product return process step-by-step. 

Write and publish your return policy

First, you’ll want to create a formal return policy that outlines how your company’s return management process works. This provides instant transparency for customers and is key for building trust. 

Here are some common elements to include in your return policy:

• The criteria for making a return
• Specific reasons why a product can or can’t be returned (e.g. final sale)
• How long customers have to request returns (e.g. 30 days from the date of purchase or delivery)
• How customers go about returning the product (e.g. dropping it off or having it picked up at home)
• Who pays for return shipping
• How long it’ll take your company to process the return
  

In terms of website location, be sure your return policy is in a logical, conspicuous area, such as on product pages or in your site’s footer. The easier to find the better, especially given that more than 63% of consumers said they would not make a purchase if they can't find the return policy. 

For more tips, check out our return policy examples of industry best practices. 

Determine how customers will initiate return requests

When developing your return policy, define exactly what your customers will need to do to request a return. 

You could require customers to contact support, but this can be time consuming and costly. Besides taking up your support team’s time and preventing them from helping customers with higher-level interactions, it can be harder for support employees to uphold a return policy when faced with the unique situations of customers. Exceptions might become commonplace, despite being hard to track and expensive. 

You could include a return label in the original outbound order. However, you’ll have little insight into your returns trends. Plus, you won’t know which items are being returned until they are either scanned into the mailstream (if you have a trigger set up to track this) or when the item actually arrives at the warehouse. It’s also not an eco-friendly practice, given how many return labels and packing slips go unused. 

Finally, it deprives the retailer of the chance to be thoughtful about the return’s destination location. Say, for example, you send damaged items to the only warehouse that can process them. But if the item is not damaged and is simply the wrong size, it’s more valuable to send it back to a local distribution center to re-enter inventory more quickly. 

As you scale, you’ll likely want to offer a branded online portal on which shoppers can make their request for a return. Returns portals streamline the process and use rules engines to uphold even the most complex return policies and return locations. According to Narvar’s recent Returns Benchmark data:

• 91% of Fortune 50 retailers use an online returns portal
• 52% of omnichannel retailers use an online returns portal 
• 63% of D2C retailers use an online returns portal. 
  

(Editor’s Note: Narvar, for example, facilitates easier return processing by allowing you to create customized return rules, based on the unique needs of your company. With it, you can deploy personalized return flows, policies, and fees for a range of products, as well as for specific customer segments.)

Help customers get their packages into the mailstream

Beyond processing returns, you’ll need to educate customers on how to send their packages back to you. 

For instance, how will customers get the label to return the item? As mentioned earlier, you could include a return label in the package. You could also give customers the option to download the label after your system has approved the return. If possible, use a process that allows you to capture the reason for the return before receiving a shipping label. This helps you generate actionable analytics which can help you refine your operations over time. 

Further, if you’re going to allow customers to drop their product off at a dropoff location, you’ll need to decide if you’ll let them do so without a box and/or label. While not an option with all SaaS platforms, Narvar offers both boxless returns and paperless returns, which can create a more pleasant, hassle-free return experience for your customers via a QR code. 

Accept and inspect the return

Once you’ve received the return, it must be accepted and inspected to ensure it meets the criteria stated in your return policy. 

Keep this requirement in mind as you set up your return process. If, for example, your clothing company’s policy specifically states that products must be returned in perfect condition, with no wrinkles or stretches, you’ll need to account for the labor required to inspect returned items for these issues.

Log the return into your IMS or WMS

Assuming the return is acceptable, the next step in the process is to log the return in your inventory management system (IMS) or warehouse management system (WMS). Data from your IMS or WMS should tie to your e-commerce shopping cart system to reflect accurate inventory levels at all times. 

Issue the refund

Once a return has been approved and tracked in your systems, you’ll need to issue the refund in your POS or payments processing system (depending on whether customers will receive a refund to their original form of payment, store credit, or some other type of refund). Be careful to ensure that the amount of time it takes you to process refunds should align with what’s stated in your product return policy. 

You can also play with refund timing as a lever for customer satisfaction. For example, you may want to give an extra perk to members by refunding the purchase upon the initial carrier scan of the returned package. Lululemon has an interesting take on an immediate refund policy with their Fast Track Refund option. 

Finalize the return

After the return has been processed and the refund has been made, you must decide what to do with the physical item itself. If the return was deemed acceptable and logged in your IMS or WMS, you may not need to do anything else to reinsert the item into your inventory. However, if the return was approved due to defects or damage, you may need to choose an appropriate disposition method for the item. 

Ultimately, no company gets its return process right on the first try. As you set up your return process, take stock of what works and what doesn’t. As long as you keep your customers informed every step of the way, you can always iterate your process in order to protect both your customers’ best interests and your company’s bottom line.