The New Year is well known for spikes in returns, but the rise of ‘gift-buyers remorse’ – when shoppers return gifts they’ve bought or received during the holidays to bolster a slimmed-down bank balance – means this year’s figures could surge; over half of US shoppers say they expect to return or exchange a gift after the holidays this year.
To prevent ‘gift-buyers remorse’ from burning a hole in your bottom line, read on for our top tips in handling post-holiday returns; from boosting your warehouse efficiency to preventing returns being needed in the first place.
1. Have a clear and easy returns policy
Returns are big business. In 2021, one in three consumers said an easy returns policy is a decisive factor in shopping with a brand – while a whopping 80% said a bad returns experience would break brand loyalty. With this in mind, it’s vital to make returns a stress-free process for customers, with details on how to do so easily found on your website.
A number of questions should be answered up front:
- Are returns free or at the customer’s own expense?
- Do you provide a shipping returns label?
- What is the return period? (Usually 30 days – if it’s shorter, make that very clear).
- What are the return exceptions (earrings, underwear etc)?
Returns might seem a drain on cash, but it’s a key way of engaging with your customers – and the stats prove that making the process swift and easy will almost guarantee the likelihood of them shopping with your brand again.
2. Survey your returns customers
You’re missing out on vital info if you don’t survey customers who return items to discover exactly what the problem was. Did they find the product cheaper elsewhere? Was the sizing inaccurate? Was the wrong item sent? If the return can be rectified without giving a straight refund, offer a replacement item or store credit – along with a discount code for a future purchase. This will keep your customers happy while keeping essential cash within the business.
3. Analyze the returns
Alongside customer surveys, pay attention to the items coming back to the warehouse and be militant about quality control. The reason for items being returned could highlight problems in manufacturing or warehouse workflows; inaccurate sizing, for example, could speak to either a dodgy product listing or shoddy supplier. Hone in on where a gap in operational efficiency or marketing could be draining profits, and make improvements asap.
4. Know who your customers are
Research shows that more than 3 in 4 customers tend to buy something at the same time as they return – so how do you make a sale at this opportune moment? A spontaneous returns sale is most effective if you know who the customer is; your data should tell you what they’ve bought previously, what they’ve added to ‘favorites’ and what their buying habits are.
Using marketing analytics tools such as Klaviyo, you can target sales at segmented customers and offer the perfect replacement for their returned item, mitigating your costs and boosting their shopping experience simultaneously.
5. Automate the returns process
Returns are logistically stressful for retailers – after all, each return can cost over half of the item’s original cost. So, automating the process has multiple benefits.
A retail operating system like Brightpearl grants use of an Automation Engine, which streamlines and automates manual tasks along every stage of the returns journey, such as shipping, warehouse, packing and inventory. Automation also reduces some avoidable in-house reasons for returns, such as mispicking or incorrect delivery addresses.
With these tricky manual tasks automated and solved, a wave of post-holiday returns doesn’t have to divert your time and funds away from more profit-driven activities, and cash flow keeps moving, as customers are served at a much faster rate.
6. Use a centralized operating system
Processing a return involves multiple departments that can cause chaos if not properly checked and managed – especially when returns are coming in from different channels and dropshipping streams. Implementing a centralized operating system such as Brightpearl will mean returns workflows are updated in real-time across all locations and channels – so when the rate of returns is at its highest, you won’t have to waste time playing catch-up in multiple spreadsheets to aggregate inventory and financial figures.
7. Keep track of serial returners
Customer expectations are at their highest when it comes to returns, but since the big-name retailers have made the concept easier than ever (Amazon and ASOS being key examples), the rate of fraudulent returns has also boomed.
We know the cost of returned items eats into profits for retailers – but when the consumer has no intention of keeping items, or has dishonest intentions from the start, the pay off is non-existent. Keep track of shoppers who repeatedly abuse the returns policy; and kindly warn them of repercussions, such as suspension or buying limits, if the behaviour continues.
Customers use Brightpearl to centralize returns data and quickly identify serial returners. This helps to put them in a much more informed position where they can make decisions on how to weed out these problematic shoppers.
8. Be responsive, flexible and customer friendly
Returns aren’t the ideal outcome of a buyer’s journey, but they’re still a vital part of the shopping experience you offer as a retailer – and an essential opportunity for customer retention.
Be sure to hold the customer’s hand from beginning to end, sending email notifications at each stage (‘Thanks for your return’, ‘We’ve received your return’, etc.), and process a solution or refund to their account before they have to contact you to enquire.
When the product received doesn’t match expectations, brand loyalty becomes shaky – so keeping the customer warm at this stage is of the utmost importance. Be friendly, personable and concise; listen to exceptional cases and create a personalised service whenever possible.
Want more advice? Check out our guide A Returns Tsunami for Retail.
To see how the Brightpearl retail operating system can act as a central source of truth for your business operations, as well as automate and streamline tricky manual returns processes, book a demo today.
