For many product businesses, “returns” is a four-letter word (and we don’t mean “gift”). Here’s how you can make this year’s holiday returns the gift that keeps on giving.
By now, you’re knee deep in managing the inevitable returns that follow the holiday season. According to a new National Retail Federation (NRF) and Happy Returns’ report, the retail industry will see returns totaling $890,000,000,000 in 2024.
That’s a lot of zeros representing a lot of lost revenue, time, and energy. But there is good news.
Managing returns can be a powerful process, one that you can leverage to attract new customers while encouraging current customers to keep coming back for more. Here are a few valuable strategies that will help you take the bah humbug out of the returns process.
Why customers see some items as lumps of coal
Before we discuss how customers’ returns are something from which you can benefit, let’s discuss why returns happen in the first place.
For shoppers purchasing their holiday gifts online (54%, according to Statista respondents), common reasons for returns include damaged or defective items, items that don’t match expectations, wrong items shipped, incorrect sizes (if shopping for clothing items), late orders, and items that are deemed poor quality. For in-store shoppers, returns often stem from buyer’s remorse; the recipient didn’t want the gift, can’t use it, or it doesn’t fit; or they found better pricing somewhere else.
And we can’t forget about the shoppers who purchase an item they’re pre-planning to return after using it for a particular purpose. They’re on the naughty list for a reason.
Un-Grinching the returns process in five easy steps
Reasons for returns aside, returns are going to happen, and the returns process is complicated, step-filled, and time-intensive. It requires accepting, inspecting, repairing, replacing (or discarding) a returned item or items and providing the customer with a refund or store credit.
You need to turn this frequently frustrating experience into a fruitful one. By fruitful, we mean increasing customer satisfaction by providing a smooth, hassle-free return process that shows you care about the sale as well as the person behind it. It also means ensuring that your return process is a seamless exercise that improves operational efficiency.
Here are five steps that ensure you are a returns pro and enhance your reputation as a trustworthy, customer-first product business.
1. Plan for returns
The returns are coming, so you need to make sure you and your staff are prepared for the influx before it happens.
Returns preparedness begins with having a clear returns and refund policy. This includes:
- When items can be returned/exchanged
- How items can be returned (e.g., in-store, online, or third-party drop off)
- Acceptable reasons for returning an item
- How the refund will be handled
This should all be addressed in an easy-to-find, easy-to-understand policy.
Planning for returns also includes looking back at your returns from past years so you can anticipate this year’s numbers and improve your returns process moving forward. This can include better product descriptions, simplifying and making your shipping more affordable, changing your products, updating your FAQs, and revising your return policy (or making it more available—even if you think it already is).
And you’ll need to schedule your staff so you have enough manpower to manage returns while still caring for your customers and orders still coming in.
2. Train your staff
Preparing your staff for the returns process also includes training. According to a recent Indeed article, proper training can “turn a negative situation into a positive one and encourage the customer to become an advocate of your brand or product because of how well you handled things.”
Training begins by making sure your team knows your returns and refunds policy inside and out, thus enabling them to facilitate a smooth return process for your customers. Your staff must also be trained in how to manage difficult customer situations. Customers returning a product may not be in the best of moods, and frankly, customers buying a product may not be in the best of moods.
So, how should your team respond? Indeed suggests:
- Remaining calm
- Speaking softly
- Listening actively
- Understanding the customer’s POV
- Assessing the need
- And seeking a solution (which may require soliciting additional support)
The end goal is to fix the problem and maintain the relationship, which ensures every customer—during the holidays and beyond—is singing your praise.
3. Turn returns into opportunities
Returns are challenges, yes, but as is often the case, challenges are also opportunities.
For instance, returns can be an opportunity for you to go the extra mile for your customers and to make things right. By providing easy exchanges and returns and offering refunds or store credit, you’re assuring your customers that their needs are a priority, and when they’re looking to purchase an item in the future, they’ll remember these delightful returns experiences—and bring their money and good cheer with them.
Additionally, returns offer you the chance to get to know the people you’re serving. Instead of completing an anonymous transaction, you’re building relationships. And relationships, if managed correctly, drive connections that ultimately produce customer loyalty.
4. Communicate during the returns process
Communication—effective communication—is how people and businesses can resolve conflicts. It ensures that everyone is on the same page while fostering collaboration and building trust. This is true in every situation, including keeping customers in the loop throughout the returns process by addressing concerns quickly and efficiently, providing clear instructions, and confirming the customer’s needs have been met once the journey from return to refund is complete.
One of the best and easiest ways to communicate with your customers is to set up automated notifications through technology—which leads us to our next and final step in getting the returns process right.
5. Streamline returns with technology
Businesses of all sizes and in all industries are using technology to successfully operate and compete in today’s digital world, and choosing the right technology is the key to success. For product businesses like yours, inventory management software (IMS) is the correct choice.
An IMS is a comprehensive tool that automates and simplifies inventory management, helping businesses track, manage, and streamline inventory in a single solution. And when it comes to returns, IMS does that too.
Specifically, an IMS helps you:
- Automate the returns process, eliminating the need to manually handle tasks (e.g., approve/deny returns)
- Calculate and issue refunds
- Track returns in real time
An IMS also helps you collect returns data, analyze the data, and make decisions about how to preemptively reduce the number of returns you receive every year, such as rethinking what products you sell, your target market, or how you serve your customers.
Making the post-holiday returns season a gift that keeps on giving
The NFR’s Winter Holiday FAQs indicate that the “vast majority” of returns happen in January. As a product seller experiencing the returns surge as we speak, we recommend researching the benefits of implementing Cin7 and Connected Inventory Performance (CIP) for your unique inventory and returns needs.
Connected Inventory Performance uses integrations and automation to drive visibility, traceability, and efficiency.This includes streamlining returns as well as tracking inventory in real time and generating insights to improve future performance. Native integrations with e-commerce, accounting, and logistics platforms ensure a seamless returns process—as does our Return Merchandise Authorization (RMA) module.
Cin7’s RMA module allows you to configure your organization’s return policies, which are then used to streamline returns decision making and automate much of the returns workflow.
If you’d like to make your post-holiday returns season a gift that keeps on giving, we invite you to request a Cin7 demo today. You’ll start your New Year off right with the IMS that makes returns management something worth toasting.
