Boost Your E-Commerce Sales with Efficient Returns Management

Time to read: 5 minutes

Effective returns management—this is the aim of every e-commerce store. On the one hand, you need it to be as optimized as possible; on the other, you should also aim to reduce the number of returns to a minimum. In this article, we look holistically at e-commerce returns management, explaining how to improve these processes, what benefits it will bring to the table, and providing you with solutions that will help you. We invite you to read on.

How to Create a Returns Management Strategy?

The first step you need to take is creating the right strategy. This point includes: 

• estimating the volumes of returned products,
• determining how you want to prevent returns,
• creating a returns policy,
• constant monitoring and improvement.

The strategy should be wide-reaching; you don’t want to focus purely on handling returns (that’s what your return and refund policy is for) or just on preventing them. You need to consider your e-commerce store from a holistic perspective. Let’s focus on the two main areas in your strategy.

Preventing Returns

Some industries (e.g., fashion) are more prone to returns; others are less. The idea is that you should look into data for your specific industry and determine the average. Then, your goal should be to put your business below this average.

This can include a multitude of steps. Imagine you run a fashion e-commerce. In such a situation, you could:

• add a size chart to give the user more info about product sizes and avoid them purchasing several sizes at the same time and then returning the ones that don’t fit,
• improve the quality of your photos or add more so that the customer knows exactly what they are buying (however, remember about ranking on Google—you don’t want these images to weigh too much and slow your website down),
• if you have a physical store, you can give users an option to test their clothing size there—some footwear stores, for instance, enable shoppers to scan their feet to determine the right size for them,
• create virtual fitting rooms to give clients a better overview of the products,
• improve the quality of your e-commerce packaging to ensure that products do not get damaged during shipping,
• build reliable customer service that the customer can contact to dispel any doubts before the purchase,
• ensure that your fulfillment services always get the job done right the first time.

Preparing a Returns and Refund Policy

When it comes to the returns policy, you need to make sure that it’s easy and clear. Your customers should be able to navigate it quickly and understand what they need to do to return their products. At the same time, you should optimize the logistics to cut down the return costs.

How to Manage Returns Effectively?

Having prepared your strategy, you need to put it into practice. How to manage returns? Start from the end—the logistics.

You need to optimize your logistics chain for both dropping off your goods and picking up returns. Ideally, you should work with a third-party fulfillment provider that utilizes PUDO (pick-up, drop-off) points—a single place where the customer can get and leave their parcels. This will limit the mileage, cutting down the costs.

Apart from that, you need to implement a system for effective and (preferably) automated refunds. To do that, we recommend installing our app: FreshCredit. With it, you will be able to assign store credit to your shoppers quickly after each return and gain detailed insights into the scale of your returns management.

Finally, you need to evaluate the effectiveness and efficiency of your procedures. Look for bottlenecks and eliminate them, keep optimizing the process—it will take time, but in the end, you will cut down the costs and boost customer satisfaction.

The Benefits of an Effective Returns Management Strategy for E-Commerce Stores

We’ve discussed e-commerce returns management in a lot of detail from the technical side. Yet, there is still one area that we didn’t touch upon—why should you do it in the first place? There are several benefits of a seamless return management system. These include:

• enhanced customer experience—the easier and quicker your returns and refunds are, the happier the customer,
• lower operating costs—better-optimized logistics lead to lower costs of handling returned goods,
• data-driven decision-making—with effective returns management, you get a better insight into your operations, and you can make your future decisions based on the information extracted from the returns management process,
• inventory optimization—a good approach to this will also enable you to predict the demand and potential returns better, ensuring that you never overstock or understock and that you use the returned merchandise to a maximum.

The Takeaway

If you want good returns management, you need to look at your business holistically. Find the reasons behind the returns and eliminate them. At the same time, create a returns policy that enables you to cut down on the costs, inefficiencies, and dissatisfaction caused by returns. Having done all of this, you will be able to turn them into an advantage, a point that attracts customers rather than discouraging them.

You might also read: Reducing Operational Costs with ByteStand’s Automated Fulfillment Solutions

About the author

ByteStand

is powed by savvy Amazon industry vets who have been passionate about eCommerce for a decade each. We’ve worked with over 2,600+ brands, generating hundreds of millions of orders shipped through Amazon FBA/MCF program using the ByteStand app.