The five perils of returns management

 The provision of a timely and seamless returns process has long been acknowledged as a key differentiator for e-commerce businesses in terms of customer satisfaction and retention. Particularly so, when returns rates can exceed 50% of sales, as is the case in certain industries such as clothing and related products.

However, it is far from certain that all businesses aspire to provide high levels of customer service in this area, with some falling far short of consumers expectations. Listed below are five areas where companies typically fail to provide an acceptable level of service.

Returns policy

Most businesses offer guaranteed returns periods, within which product can be returned either for credit or replacement. Some businesses, however, have gone one step further, by giving discretion to customer facing teams in relation to the returns period, in effect creating a policy whereby employees are actively encouraged to ’break the rules’ with the objective of delivering outstanding customer service!

In my view this is counter-productive, not only causing confusion and ultimately dissatisfaction to the customer but also incurring unnecessary cost for the supplier. Returns policies should be clearly communicated but also enforced.

Convenience

Offering the customer a choice in terms of how products are returned is now accepted as best practice. The rise in popularity of PUDO’s or collection and returns points is testament to this, but some companies still only offer courier collections, which can, in turn give rise to failed collections leading to delays, customer dissatisfaction and increased cost.

Returns transit time

Few organisations bother to accurately measure the time taken for a product to be returned from the customer. With refunds or replacements only being processed after the original return is received, again a source of customer dissatisfaction. Couriers, particularly. do not prioritise returned products, especially in period of peak activity.

Measuring and improving this area of the returns process is key to providing a good customer experience.

Internal returns processing time

Although many businesses will credit or replace before the original return is received and processed, some do not, instead only issuing a refund once the return has been fully received, inspected and a disposition decision made. Because, in some businesses, returns resource is sometimes sacrificed in favour of maintaining outbound service levels, lengthy delays in issuing credits or replacements to the customer can occur. Another cause of customer dissatisfaction but also potentially cost for the supplier.

Returns disposition

Whilst not necessarily affecting the customer, creating a well organised and efficiently laid out returns area is key to providing an effective returns process. Too often, returns areas are squeezed into a corner of the overall operation, with little thought given to process design and flow. This will, inevitably be to the detriment of the overall process and result in additional costs being incurred.