Volume, expectations high for holiday returns

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Retailers must offer quick and efficient return options for consumers post-holiday sales.

January means returns for millions of U.S. shoppers that did not like their holiday gifts. Following National Returns Day, where UPS estimated 1.4 million packages were be sent back to retailers in just 24 hours, Troy Graham, VP of business development at logistics technology company Descartes, says that there is an efficient and cost-effective way for retailers to handle the influx of returns.

Compared with the last few years, Graham expects this January's returns to be differentiate in volume and customer expectations. 

"Due to the dramatic increase in e-commerce orders this year, the expected shipped returns will be infinitely higher than in the past," he said. "For retailers with brick-and-mortar stores, there will also be an increased volume of online purchases that are returned to stores, which must then be processed. In some cases, retailers are even incentivizing customers to bring items back to a retail store versus shipping back to a distribution center to try and spread out the workload."

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In addition, Graham stresses that customers are demanding better efficiency and refunds when it comes to returns. Therefore, these customer demands will put additional strain on businesses for faster-than-ever returns processing.

Finally, many manufactures are putting either deadlines on returns or offering incentives for resellers to get returns processed quickly in an effort to close accounting periods.

Not planning for returns is the most common mistake that Graham sees retailers making during this critical period. The result is that returns pile up in the warehouse and result in slow credits to customers, which can drive negative customer feedback and the loss of replacement orders.

"The other thing that we still see is companies simply making it too hard or labor-intensive for a customer to get a return authorization processed and a returns services label. In both B2C and B2B relationships, people expect a very simple and very quick returns process," Graham said.

In addition, Graham noted that many retailers lack clear procedures for handling returns, such as whether the item goes back to stock as new, for sale used, or returned to vendor, etc. 

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"Again, the result is typically a slow workflow, which means a returned item takes a long time to process. This often results in items accumulating in the warehouse until they are eventually put on clearance to 'just get rid of them'—even though many items may be in new sellable condition or could have been returned to a vendor," he said. 

With the continued growth of e-commerce, it's imperative for retailers to get their returns strategies right in order to avoid customer backlash and loss of sales, as well as compete with giants like Amazon.

Graham offers eight tips for retailers when it comes to improving the holiday return process:

  1. Provide a personalized return slip.
  2. Add a pre-paid return label on the shipment.
  3. Make the return process as transparent as the order process.
  4. Speed up the return processing, informing consumers immediately when the returned item has been received.
  5. Keep goods handling & customer service separate.
  6. Use automation as with reimbursement and inventory management.
  7. Minimize exceptions and come up with goodwill rules.
  8. Consider returns as an important customer service practice.

Also remember, customers most value speed and simplicity, according to Graham. 

"This is a major factor in customer loyalty today. If we look back just a few years, it was all about making it easy to buy online. Today, everyone can do that. Choosing a company to buy from often comes from ease of returns and reviews from other consumers about their return experience with the company," he added.