This November, UPS announced its holiday returns traffic will peak on Jan. 2nd with over 1.9 million packages, a 26 percent increase from the company’s 2018 peak. This is a substantial year-over-year increase. UPS also expects 1.6 million daily returns during the week before December 25th, another indication that the days are past when the majority of returns traffic was after the holidays.
In addition, it is challenging for merchants to sell returned items at full price after the holidays. A recent CNBC story estimated that an average return represents 30 percent of the purchase price. This is significant when the typical margin for most online orders is about 10 percent. The increasing number of returns and effect they can have on margins makes it even more critical for companies to improve their returns processes.
One way to keep as much value from returns as possible is to make it easy for customers to get their unwanted items back quickly. Here are a few ideas:
- Pre-paid return labels are very popular with customers because it saves the step of going to a return portal or printing their own labels. Some shipping solutions offer scan-based returns, sometimes called “Pay on Use” returns. In this scenario, sellers only pay when they are used. As a result, it’s easy for customers to send their returns on their way.
- Easy to re-package solutions are another way to make the returns process more seamless for customers. If shipping via padded envelope, include another envelope in the package or use a sturdy box that just needs to be re-taped and dropped in a mailbox.
- Use partner access points for in-person returns or a carrier’s return service to pick up unwanted items. Being able the drop off a return or have one picked up makes buying products online more attractive for shoppers. Many shipping solutions allow merchants to take advantage of carrier and marketplace services for in-store pick-up/return partners. UPS has added Advance Auto Parts, Michaels, and CVS; Amazon has a deal with Kohl’s; and FedEx works with Kroger’s, Walgreens, and more. Conversely, depending on the value of the item, selecting a return service from a carrier might make sense. Return services allow merchants to use the carrier as a personal courier to pick things up and return them to the seller.
At the receiving end, ecommerce merchants can take steps to improve their internal processes and use shipping solutions to increase the efficiency of their returns. For example, sellers can:
- Create a unique customer return record. By creating a separate digital return record attached to the customer’s original order, online sellers can more effectively process and track the return’s status and offer customers timely updates at every stage, from receipt of merchandise to refund status.
- Keep returns processing and customer service separate. Separating reimbursement and inventory management helps retailers speed up both parts of the return workflow. For example, an item is received, evaluated and then the shopper is automatically reimbursed as appropriate. Some companies are even willing to give refunds before a product is received to keep customers happy and increase the speed of processing refunds.
- Send returned items to the right place. Today’s returns are much more complicated, with many merchants selling online from multiple marketplaces to a wide range of geographic areas. Whenever possible, generate return labels that send returned products to the right reverse logistics channel that can best deal with the incoming merchandise. Some shipping solutions allow sellers to automate where returns are routed based on the product vendor, category, or location. The faster returned items are checked for integrity and re-introduced into inventory, the more value these items retain.
The current trend for increasing online returns throughout the holiday sales cycle continues. This season evaluate workflows to make it easier for customers to return items and use a shipping solution to create a seamless process to protect profits by getting returned products quickly back into the holiday sales cycle.
