Common Returns Management Challenges and How Software Can Help?

Introduction

Customer returns are an integral part of logistics and e-commerce fulfillment. Unlike forward logistics, reverse logistics corresponds to the return journey of the product from the end customer to the nearest hub. Over the past decade, returns have increased significantly, becoming a major hurdle for merchants. Instead of letting it hamper customer satisfaction and loyalty, businesses have found ways to salvage the situation with efficient returns management. 

They have turned the situation around by increasing proactive communication, implementing software support, and giving customers a platform to initiate and track returns. This article will explain how returns can break your business and highlight solutions that simplify the returns management process, ensuring healthy customer relationships. A survey shows that 87% of customers would likely stop buying from a brand that exclusively offers paid returns.

What Is Returns Management?

Returns management refers to the process of handling the return of unwanted or unsatisfactory products from customers back to the company's warehouse. According to Readycloud, 30% of returns occur when customers change their minds. As a result, increased customer returns can signal a negative customer experience, ultimately affecting your brand reputation. However, businesses can efficiently manage reverse logistics operations and offer customers peace of mind with a well-structured returns management process.

Effective returns management is imperative to enhance customer satisfaction and loyalty. In this regard, adopting automated returns management systems can help streamline the process. They facilitate seamless integration with reverse logistics services, product receiving and sorting, handling return claims, and more.

Return management system also aids in implementing your return policy, analyzing return data for informed decision-making, as well as repackaging, refurbishment, remarketing, and resale.

Critical Challenges in Returns Management

While easing customer returns, brands often face operational complexities and other challenges that prevent them from satisfying the customer. These challenges, if not handled carefully, can disrupt the returns journey. Here are some of the bottlenecks that businesses encounter:

1. Limited Reverse Supply Chain Capabilities

Merchants often fall behind due to inadequate reverse supply chain capabilities. They may lack the warehouse space for storing and processing returned products. Limited space leads to overcrowding, creating challenges for swift product exchanges due to disruptions in inventory management. Brands that are not ready with a solid infrastructure face issues during Easter sales, Black Friday, and Cyber Monday when customers tend to return products the most. Such capabilities are also essential for sensitive products and dangerous goods that require specialized handling and enough space for storage. 

2. Poor Returns Policy

Customers take an about-turn when the brand has a poor returns policy. This can mean that the rules in the policy are unclear and not specific to the product return or get them confused. A poor returns policy in the absence of an efficient returns authorization process may result in multiple returns procedures for different products. These issues can frustrate customers, leading to a negative experience like financial losses and reduced operational efficiency.

3. Establishing Customer Trust

Customer trust is always the winning factor when it comes to managing returns. They gain trust when brands respond to customer preferences and offer complete control over product returns through a self-serve returns portal, a clear returns policy, and real-time updates. Buyers also expect timely refunds, so brands must initiate timely and accurate payments. A brand that fails to provide a hassle-free returns process suffers from a poor reputation and loses customers.

4. Returns Fraud

Fraudulent returns and return policy abuse are common threats and challenges for e-commerce brands. It is a scenario when an individual or a company uses another company’s returns policies to its advantage. It also includes deceptive returns practices and breaching existing systems to acquire refunds and replacements. Fraudulent returns activities carried out by customers can include replacing genuine items, falsely claiming returns, and placing fake goods as returned products.

In the fashion industry, “wardrobing” is a common return fraud. Here, individuals buy clothes, wear them for a photo shoot or a specific occasion, and then return them with a fake or bogus return request. If companies don’t analyze return trends and filter only eligible returns, they may struggle to identify these fraud patterns, which could lead to significant financial losses.  

How Returns Management Software Improves Reverse Logistics Process?

A successful returns management strategy requires expertise and technological prowess. Returns management software gets the job done more efficiently and swiftly. It improves customer retention and increases customer satisfaction with your online store. Moreover, it also helps you maintain customer loyalty, which further improves the company’s bottom line. Here’s how:

1. Returns Automation

By automating the entire returns process, e-commerce brands are revolutionizing returns management. They are cutting costs, reducing bottlenecks, and fostering brand loyalty. Returns management software helps automate every step of the process— returns initiation, setting returns eligibility rules, quality checks, facilitating store credit. 

These tools simplify returns management by generating labels, tracking the returned item's location, approving eligible returns, verifying returned products, and more. These platforms also help optimize shipping costs by automatically allocating the most cost-effective logistics provider. Moreover, it is easy to integrate the returns software with WMS (Warehouse management software), carriers, and help desk systems for customer communication.

2. Clear Returns Policy

Businesses should provide coherently written returns policies and offer enough clarity to audiences about their online purchases. A well-crafted returns policy helps customers make informed decisions, outlining what to expect from their online purchases. The policy should clearly specify which products are eligible for refunds and who is responsible for covering postage and delivery costs.  It should also state the warranty period and the return window.

A returns management system can enforce your return policy by providing an online return portal. For example, the policy may allow returns within 30 days for a full refund, with the system automatically approving eligible requests.

3. Straightforward Customer Communication

You can be on the same page with customers by being transparent. Customers do not like to be kept in the dark with order updates. From the returns initiation stage to receiving refunds, brands keep customers informed and in the loop to ensure they are not neglected. Straightforward communication and answering questions upfront is the best way to stay ahead of the curve with Where is my return? (WISMR) queries.

4. Returns Order Visibility and Transparency

Similar to the forward logistics process, brands like to offer real-time returns visibility and transparency to recipients. This boosts customer satisfaction, builds long-term relationships with customers, and enhances operational efficiency. But how do brands achieve that? There are several ways brands ensure transparency. While collecting the returned product, they ask courier personnel to take photos and signatures for confirmation. They keep customers informed throughout the process through returns tracking and quickly initiating refunds as soon as the product reaches the nearest hub.

Take Control of Your Reverse Logistics with ClickPost’s Automation

ClickPost’s prowess in logistics automation has benefitted several companies domestically and internationally. It offers automated returns management systems called ReturnsPro and ReturnsPlus for brands to seamlessly manage their returns and stay on top of their competitors. It connects you with more than 500 carriers and allows your business to go live in 24 hours. 

Other than sending order tracking information to customers through push and pull APIs, it also provides an order creation API, EDD API, and NDR management API for a streamlined shipping experience. All of these optimize the return process and lead to excellent customer service. For its all-in-one assistance, ClickPost is readily available with a demo for businesses of all sizes.

Bottom Line

Returns are inevitable in the e-commerce world. As customer expectations increase, more businesses struggle to find innovative solutions to streamline the product returns journey. This makes a well-organized returns management process essential for businesses of all sizes. Brands are now implementing effective returns management capabilities to enhance response times, communicate with audiences, and offer them more visibility. It helps them see a difference in their returns operations and increase business profitability.