What is Meant by eCommerce Non-Delivery Report (NDR) and Return to Origin (RTO)

Introduction

Even the most successful businesses find themselves dealing with a pile of delivery exceptions on a monthly basis. These delivery exceptions can start off seemingly small but then snowball into failed deliveries and eventual losses.

Occurrences like delayed deliveries or stuck shipments can exacerbate customer anxieties to a point where their excitement for the order's arrival wanes completely.

When a delivery exception becomes an NDR, there is a high probability that it will result in an RTO. This leaves your business bearing the brunt of an extremely avoidable loss.

How is it avoidable, you ask? As with all things in business, through the management and strategic planning. With that in mind, let's take a deeper look at the cause-and-effect cycle brought about by delivery exceptions and it's various attributes.

What is Non-Delivery Report (NDR) and Return to Origin (RTO) in eCommerce Logistics?

NDR and RTO are quite possibly two of the most powerful acronyms in the ecommerce industry. An NDR is a non-delivery report.

It is a notification given to an ecommerce business by a courier partner informing them that a particular delivery has failed and passing on the details of said failed delivery.

Following this, multiple delivery attempts are made by the carrier to ensure successful delivery. In case the order is cancelled, or after multiple failed delivery attempts, the order is given the status of RTO, meaning Return to Origin.

As the name suggests, this means the purchase is essentially reversed and the order must now be returned to the original warehouse it was first shipped from. There, it can be restocked in your inventory and sold again.

What are the Leading Causes of NDRs (Non Delivery Report)?

Determining how best to tackle an NDR cannot be done without fully understanding how NDRs work and what causes them. The reasons behind an NDR occurring and being reported can go a long way in helping you resolve the issue.

For example, if an NDR occurs because a delivery agent cannot find the customer’s address, then the best way  to make sure the next delivery attempt is successful is to ask the customer for the nearest landmark to their address.

Similarly, if a customer is not at their location to receive a delivery, a different delivery time can be rescheduled. Here are some of the most common causes for failed deliveries.  

1) Error in Customer Address

A customer may accidentally or unknowingly submit their delivery address incorrectly. This can prevent the delivery agent from finding the customer's location, thus impairing their ability to complete the delivery.

2) Error in Customer Contact No.

A customer may similarly make an error when submitting their contact number. So when a delivery agent calls to confirm the delivery location, they will be unable to do so and thus fail to hand over the order.

3) Delivery Rescheduled by Customer

A customer may be unable to receive the order or perhaps make payment at the time of delivery. They may accordingly request an alternate delivery date and inform the delivery agent of such.

4) Customer Unavailability

There are occasions where customers are simply unavailable to take possession of the delivery but do not give the delivery agent any alternate instructions for delivery. This can also result in a failed delivery

5) Delivery Rejected by Customer

With online orders, customers enjoy the convenience of being able to change their mind about an order. They may simply reject the order and refuse to accept the delivery, thus triggering an NDR.

6) Fake Delivery Attempt

Fake delivery attempts occur when a delivery agent falsely claims an NDR has occurred without actually making a delivery attempt. These can be extremely detrimental to customer experience.

How to Reduce Return to Origin (RTO%) Through NDRs Management

Failed deliveries come with a lot of bad baggage, if you’ll pardon the pun. To start with, a customer’s experience with your ecommerce platform can be severely diminished when a failed delivery occurs.

Any delay in delivery is likely to result in some dissatisfaction, but for the delivery to come so close to being fulfilled and then failing is an added blow.

To make matters worse, some failed deliveries end up as RTOs, the bane of any ecommerce business. RTOs (Return to Origins) are orders that are cancelled, before or after multiple failed delivery attempts.

These are orders that signify losses for an ecommerce business, in the form of a lost purchase and unnecessary shipping charges. However, RTOs arising from NDRs can be reduced by following a careful workflow that manages your NDRs. Here’s a step-by-step guide to understanding how NDR management works.  

1) Identify the Cause

First things first, you need to understand why the failed delivery occurred. It could be because the delivery agent couldn't locate the customer's address or because the customer was unavailable to take their order. This informs you as to what your next step should be. 

2) Address with Customer

The next thing you need to do is speak to your customers about the cause of the NDR. They can give you information that may enable you to ensure the second delivery attempt is a successful one. 

3) Inform Carrier

Any information passed on by the customer regarding the failed delivery needs to be passed on the carrier quickly. Only then can the next delivery agent be informed of the new requirements prior to making the next delivery attempt.

4) Next Delivery Attempt

With the new information you received from the customer, the next delivery agent will try again to deliver the order. The more accurate the data, the greater the chances of the next delivery attempt going smoothly. 

5) Follow up

There may still be unfortunate occasions where the second delivery attempt fails, despite having collected information from the customer. Once an NDR is notified for a second time, a follow-up communication must be sent out to customer to ensure next attempt is successful.

How Does NDR Management Software Solution Help in Reducing the RTOs?

Having an NDR management workflow is just the first step to reducing losses caused by a high RTO%. If you really want to bring your RTO numbers down, it takes more than good planning. You also need to be equipped with the right tools.

And the first thing you need to have attached to your handy ecommerce logistics toolbelt is an NDR management software solution. This system will essentially help you automate, streamline and perfect your NDR management workflow.

With the help of such a system, your RTO% will begin to drop drastically, thanks to nifty little boosts like: 

1) Automate NDR Cause Detection

A good NDR management system will have a set list of designated causes for NDRs. This ensures that as soon as an NDR is received, the process of categorising it based on its cause is automated. So you are prepped with the knowledge on how to proceed for each one based on its categorisation. 

2) Automate Communications

The process of dealing with NDRs requires you to first reach out to customers for information, then push that information to the carriers. By automating all of these communications, an NDR management software helps you save time, effort and ensures accuracy of the data being passed on by all parties involved. 

3) Real-Time NDR Tracking

As we’ve mentioned before, time is of the essence. In a traditional NDR addressal system, carriers provide all NDR updates for that day at the end of the day, so you can address each of them only the next day.

This system begins with you losing a significant amount of time. With an NDR management software, you receive NDR notifications as soon as the delivery agent updates the courier partner. You are thereby enabled to act quicker. 

4) Collect Delivery Exception Data

With the help of this immediate transfer of data, you can collect information on all different types of delivery exceptions. With this data being collected over large intervals of time, you can see what patterns emerge for different types of delivery exceptions. Accordingly, you can work out different mechanisms for addressing or reducing these delivery exceptions. 

5) Actively Manage Fake Deliveries

By closely monitoring both delivery exceptions and NDRs, you will actively be able to determine which NDRs are fake deliveries. Once you determine the same, you can actively weed out fake deliveries through specific redressal systems and carrier enhancements. 

How do NDR and RTO Impact the Profitability of your eCommerce Business?

When an NDR occurs, the failed delivery attempt may in itself trigger the customer to refuse or cancel the order. Even if the customer doesn’t cancel the order, the order may still not be delivered after multiple attempts. Each attempt may end in failure if the same actions are being repeated without collecting new relevant delivery information.

This will result in an RTO. In such a situation, your business is already losing out on the price of the purchase and the cost of shipping.

However, if the order encounters any problems on its way back to the origin warehouse, you could potentially lose the cost of the product as well, making it an unnecessary triple loss.

All in all, it's better to cut this snake off at its head and deal directly with NDRs before they come close to becoming RTOs.

How to Reduce Cancellation and Return Rates of eCommerce Orders?

There are a few ways to reduce cancellations and RTOs for ecommerce orders. The most effective way is through the employment of an NDR management software.

The purpose behind such an addition to your system is to create a streamlined process for dealing with your NDRs as soon as NDR notifications are received. The quicker you address the cause of an NDR, the greater the chances of the delivery agent successfully completing the order on the next delivery attempt.

In fact, our research has shown that from the moment an NDR has been notified, you would typically have only 36 hours to resolve the issue and successfully deliver the order, after which customers become greatly inclined to cancel the order.

By speeding up the process of receiving NDRs and then addressing them with cause-specific communications to customers, your company becomes empowered to fulfill more orders and reduce return rates. 

Conclusion

NDRs and RTOs are two deeply interwoven parts of order fulfillment that together create an extremely heavy burden on ecommerce businesses. While this burden may not be able to be fully alleviated, it can be reduced. The main way to do this is by separating these two entangled acronyms.

Through a carefully crafted workflow that addresses NDRs, you can create a gap between NDRs and RTOs by simply reducing the number of NDRs that end as RTOs.

Allowing customers to be a part of the delivery process can also improve the delivery experience for them, ensuring they stay informed and are empowered to aid in receiving their order. Both customers and eCommerce can benefit from reducing RTOs through NDR management.