With the increase in e-commerce orders, the volume of returned shipments is also rising. Hence, no e-shop should underestimate its reverse logistics. Its role is to manage returned merchandise, either by reintroducing it into the offering, repairing it, or recycling the products.
According to Invesp, an online customer is likely to return up to a minimum of 30 percent of the products they order for various reasons. This stands in stark comparison to brick-and-mortar stores, where return rates are nearly 9 percent, a significantly lesser concern.
Furthermore, returns have a negative impact on the environment. Within e-commerce, returned products are the second-largest source of air emissions, according to statistics from the Statista portal. These returns contribute to approximately a quarter of emissions in this context.
Managing them presents a considerable challenge for e-shops. It affects not only the business’s economy but also overall consumer satisfaction with their purchases. However, in the realm of online shopping, opportunities arise to prevent or at least control returns, ensuring products meet customer standards.
In this article, we shall delve deeper into strategies to avoid returns and effectively establish return management in an e-commerce environment.
Controllable vs. Uncontrollable Returns
Customers return products for various reasons. These can include faulty items, dissatisfaction upon testing, sizing issues, and many others.
However, these reasons can be further categorized. Essentially, whether the retailer could have ensured the product met all customer requirements or whether it was simply unavoidable and the customer bought items intending to return some.
Controllable returns often stem from avoidable errors, such as defective products or damage during transport. It can also relate to how well a product was presented on the e-shop and whether its attributes were thoroughly explained to customers, including its specifications, graphical representation, and more.
On the other hand, uncontrollable returns are those that the e-shop has minimal influence over. Particularly in the case of clothing, customers tend to order items in multiple sizes or colors with the intention of sending back what doesn’t suit them.
Strategies to Prevent Returns
Increasing the percentage of controllable returns is feasible and doesn’t necessitate significant investments. For instance, more thorough packaging, emphasizing product safety, can reduce damage during delivery.
For clothing items, an improved presentation on the e-shop’s website can make a difference. This might involve detailed product explanations, graphic materials such as photos or videos.
Even more effective can be various dimension calculators for a given product, or online fitting rooms that visually demonstrate how the clothing will appear on the customer. In the case of electronics, a more detailed description of the device’s features and its operational demonstration can be helpful.
Reducing return rates can also be aided by expert customer support, enhanced shipment tracking, or quicker delivery to prevent customers from reconsidering their purchase. Creativity has no bounds, and this holds true even when handling returns.
Managing Returned Products
Nevertheless, a certain percentage of dispatched products will still be returned. Thus, an e-shop must be prepared, as the process should occur swiftly and efficiently, considering costs.
The process of return management begins by transporting the product back to the warehouse. An ongoing trend in delivery is to include a return slip with the order.
Returns make their way to the warehouse through courier services, or if the e-shop handles its own transportation, its couriers can collect the returns during package delivery.
The next step involves receiving the returns, where products are documented in the system as returned. Subsequently, the product is opened, inspected for defects, or reconsidered by the customer.
After a thorough examination, the product is moved further, either for restocking and resale, repair, or recycling. The customer should also be informed about the status of their returned item.
However, return management demands time, manpower, and expertise for optimal execution. Yet, an e-shop cannot always afford to invest excessive time and resources into managing returns.
If an e-commerce business finds itself struggling with returns or requires assistance with other logistical aspects, it can turn to third-party companies, known as fulfillment firms.
Their services can take care of the entire logistics process, including return management. Returned items are sent back to the warehouse, meticulously examined, and the seller is informed about the product’s condition through messages or images.
Ultimately, the retailer’s responsibility for the returned merchandise concludes with deciding whether to restock and resell the product or send it for repair, or recycling. This allows them to focus on their core business, while logistics experts handle overall or reverse logistics.
Reverse Logistics at Fulfillment by FHB Group
At Fulfillment by FHB Group, we’ll handle your complete logistics, including return management. Within our services, we process returned shipments, our employees inspect and document them, and our information system updates clients about product status.
Primarily, our daily transport lines, departing across Europe to deliver packages, collect returned parcels from courier companies. These are brought to our warehouses or return branches, where they are registered.
Subsequently, assigned personnel at the returns department open returned packages, checking for any issues. If a package wasn’t delivered due to customer rejection or incorrect delivery details, it’s inspected to ensure product integrity. Documentation is done through photography and text, and the item is sent back for restocking.
For customers who chose to return items, our workers thoroughly inspect the product’s condition, test it if necessary, and meticulously document its status for the client. Via our information system, clients can observe the product’s status either in writing or visually and decide whether it should be restocked or proceed with other actions.