When Black Friday and Cyber Monday are around the corner it means that it won't be long until Christmas either. Christmas time does mean high sales, but don’t forget to consider the high return rates in the post-Christmas period. This is partly due to the high costs associated with numerous returns. As can be seen in the chart below, the return costs for retailers range from 5 € to 17,70 €. Especially if your online shop is still in its infancy, you should try to proactively counteract too many returns in order to keep your expenses as low as possible in your returns management.
Wrong size, the taste not met or poor quality: There are numerous reasons for returns. It should be in your own interest to make the return process as easy as possible for your customers. Warehousing1 breaks down the importance of a smart returns management and lists three steps you can take to prepare your returns management for a successful Christmas and holiday season.
Why is a smart returns management that important for your business?
After you've upgraded your inventory management and clarified open questions regarding fulfillment and shipping of your products, you can take a short, deep breath. The expected increase in sales at Christmas, beginning with the BFCM period, is also reflected in the returns rate. You must be aware that the presence or absence of a smart returns concept also has a direct impact on your customers' general willingness to buy from your shop. This is particularly evident in the
study "Rethinking Returns"published by Klarna in 2019. The study shows that around 37% of customers have shopped again at a store that offers returns completely free of charge. A total of 39% have shopped again at a particular store because of simple returns processes.
Why are so many Christmas gifts being returned?
When it comes to gifts, it is obvious that not all gifts will be met with pure enthusiasm. However, you should be aware of the responsibility that your actions have on customer satisfaction. By ensuring safe and fast delivery and by accurately displaying the products on your website, you can counteract targeted returns for the reasons shown in the graphic below. The easier it is to process returns, the more likely it is that customers will decide to place another order with your eCommerce shop.
3 steps to an optimized returns management
From your own experience you’re probably familiar with the following scenario: If the presentee does not like the item, a simple return policy is clearly advantageous. Especially at Christmas, customers want to be able to return goods quickly and conveniently without having to go to great lengths. With the following three steps you can revise your returns concept and make it even more customer-friendly:
- Create an effective returns policy
Take away your customer's concerns about not being able to return a product even before the purchase. Many eCommerce stores emphasize their return policy as a unique selling point (USP). This should make it immediately obvious to the customer, which advantage a purchase in the particular online shop offers. In your return policy, document (at least) the reason for the return as well as the date and place of the return. Legally, every customer can return the goods within 14 days and withdraw from the purchase contract. However, since 2014, a reason for return is also required. Extended return periods are worth considering - especially at Christmas. Give your customers time to think carefully about whether they want to keep your product or not.
- Rely on an automated return process
Efficient warehouse management software (WMS) can automatically process returned stock. This enables you to proactively counteract possible complications in warehouse management. Using intelligent IT solutions in your shop system or innovative ERP software, returns become child's play. The automated processes save resources and make your customers happy. An organized database can be used to sort the returned items - in their digital form. Also make sure that there are no stock-outs and that you always have enough copies of the sold or returned items in your warehouse.
- Invest in a well thought-out reverse logistics system
An optimized reverse logistics system is the key to long-term cost reductions of your returns. As discussed at the beginning, the costs for returns can sometimes be very high. With the help of a warehouse management system (WMS) that also takes into account the status of returns, you can not only make better use of your inventory, but also achieve better customer loyalty. So investing in modern fulfillment solutions will certainly pay off for your company.
Of course, it can happen that your own logistic solution quickly reaches its limits when you have to deal with increased returns. In this case, outsourcing the storage and fulfillment processes is worth considering. Competent partners by your side can help you in reducing costs long-term and keep the effort for you as low as possible.
You do not know where to start? In our current eBook you will find a practical checklist to put your returns management to the test. Click Here for your free download. Warehousing1 is your competent partner for all aspects of logistics and will be happy to advise you on your specific outsourcing options. With more than 500 logistics partners, we will find the ideal solution for you, so that returns can be processed quickly and smoothly. Simply arrange a non-binding appointment using our contact form to find out more.