Instead of thinking of returns as a pain, think of them as a way to build sales, attract loyal customers and earn a reputation as a good company to do business with.
Smart companies put as much thought into their returns policy as they do their sales strategy. That’s because they realize that when it is easy and inexpensive (or free) to return a product or merchandise, customers come back.
Setting up a plan for handling returns is part of the computerized fulfillment system that we use in our warehouse operation. It requires our clients to think through how they want to deal with returns. The questions we ask our clients are questions you should ask as you set up your system.
You must determine where returns should be sent. If a fulfillment center handles your shipping, it should also handle returns. If shipping is handled in-house, products should come back to your headquarters.
Companies often include a form for the customer to fill out and send back with the return. On the form, they describe why they are returning the item and what they want in return (a refund, exchange, merchandise credit). Some companies might have customers relay the information online or print out a form from their website. No matter the approach, returning a product should be as easy as buying it. Studies show that more than 90 percent of customers buy from a company again if they have a good experience with a return and around 70 percent will read a company’s return policy before they make a purchase.
Based on what the customer indicates they want (refund, replacement, store credit), your company must take action. Our system can relay that information to you.
We inspect returned merchandise or products for problems. The rules your company sets in our fulfillment system will tell our staff what to do with a returned product. Products in good condition with no damage or problems are often returned to inventory. Products that are damaged or malfunctioning might be recycled or destroyed, depending on the company’s wishes. Our system will generate a report describing a returned product, including its item number, why it was returned and how that product return was handled.
Our fulfillment system spits out all kinds of data, including information about what customers are returning and why. Companies can glean valuable insight from these reports. For example, returns might show that a particular style of shirt is being returned because the color is not what customers expected. To address that problem, your company could depict the shirt color more accurately on website or in sales materials or perhaps decide to discontinue what appears to be an unpopular color. If reports show that a particular item is being returned constantly because it was damaged in transit, it might be time for more protective packaging.
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