How Does Your Retail Business Deal With Customer Returns?

Smiling business woman

Many retailers have turned to innovative applications to limit the costs derived from return shipments while maintaining customer satisfaction at the same time.

The reason for using reverse logistics software systems, for example, stems from the trend of some unscrupulous individuals that abuse return policies. In some cases, criminals seek to return or exchange stolen items for either cash or another product.

Business Losses

The need to keep an eye on customer returns has become relevant due to its significant implications for a retailer’s business losses. In 2017, those who abused or engaged in fraudulent customer return policies caused almost $23 billion in losses.

Overall, returned packages accounted for more than $351 billion in lost sales for retail companies. Aside from using software, analyzing consumer perception on return policies will be important to determine the cause of return rates. An example of this is the so-called post-purchase dissonance or “buyer’s remorse.” This type of behavior particularly affects return shipments for online retailers.

Online vs. Offline

A report showed that 30% of online retail sales normally end up as return shipments. This pales in comparison to almost 9% of in-store sales that are tagged for return or exchange. It only shows that online retailers face a greater need to include a more efficient system to their reverse logistics program.

One way to do so involves the use of drop shopping as part of the strategy. A third-party logistics firm would be a better option for returns management, which may range from resolving damaged products or product redistribution to manufacturers.

The idea of being skeptical about customer returns can be a tricky prospect since you risk losing the trust and loyalty of decent customers. However, the turnaround for this concern involves working with a third-party firm that has experience in dealing with many types of reverse logistics services.