E-commerce businesses have generally benefited from the pandemic. But as people continue to do most of their shopping online, those gaudy sales numbers will mean more returns.
If previous years are any indication of what’s to come, that could spell trouble for your e-commerce operations. Handling returns can be a significant pain point for both customers and businesses alike. And with the holidays coming up, how can you adjust in time to cope with the increase in volume?
An urgent challenge
Even before the world of e-commerce felt the domino effects of COVID-19, returns had become a massive problem for online retailers. The numbers for 2019 show that returned online merchandise amounted to a total value of $41 billion in the US alone. Return fraud is pegged at 8.8% of the total, a jump of 35% from the previous year.
This issue isn’t new; since it tends to affect online retailers disproportionately, you might have already taken previous steps to address potential losses in this area. But just as it has done with many other aspects of our lives and business operations, the pandemic has thrown a wrench into the traditional framework of returns processing.
Consumers can’t return products, and retail warehouses can’t accept and process them, without physical contact. Several stages of the return journey incur potential risk for exposure to the coronavirus; many of them are out of the retailer’s scope. The new precautions involved in safely handling and disinfecting packages create delays in the process. Some companies choose to stop accepting returns altogether at brick-and-mortar stores.
And yet the demand for online merchandise hasn’t gone away. It’s well-known that people are shopping online more than ever due to safety concerns and restricted mobility. This surge in volume, on top of existing delays and supply chain disruptions, is only making the problem of returns even more urgent for e-commerce companies to address.
Revisiting your process
Businesses are created and survive based on their ability to solve problems and meet the needs of their target audience. And right now, there’s no doubt that online retailers have the potential to thrive.
The demand is huge. But clearly, there are multiple opportunities for your relationship with customers to go sour based solely on the returns process. Customers have come to expect a seamless process, free return shipping, and a swift refund. Satisfy them on those points, and you’ll earn their loyalty.
Yet those customer demands can conflict with the practicalities involved. You need to trust, but verify how can you accurately inspect and grade returned products in a hurry? What are the options for product disposition to mitigate losses? And how can you quantify the lifetime value and loyalty of a customer?
There are no easy answers to those questions, but you can leverage data to come up with solutions. A reverse logistics system using cloud technology can provide a centralized platform that’s simultaneously accessible to customers, support and warehouse staff, and other third-party providers. This integration facilitates the process while making it easier to analyze data for insights that will help create value at every point of the return journey.
Calibrating your policy
Improving your returns process is a great step forward. But it’s one thing to assume that you’re dealing with actual value-generating customers. People make honest mistakes and are willing to comply with your returns process in good faith. But you can’t ignore the matter of return fraud.
There have been numerous reports of a surge in online scams and cybercrime since the outbreak of COVID-19. Some of that is undoubtedly due to the general shift towards online activity in our jobs and lives. Equally, though, it could be attributed to difficult and uncertain economic times. More people are likely to resort to dishonesty to make money. That makes fraudulent returns an even bigger problem in the days to come.
Moving forward, it’s unlikely that many businesses will be able to stick to a one-size-fits-all, “no questions asked” return policy. But you don’t want to turn away consumers with a complicated or prohibitive policy; your competitors would be only too happy to accept their business.
AI can provide solutions in this aspect. Integrating AI can help you identify returns abusers, even those who are trying to hide their identity, and set the threshold beyond which you are losing value. This will help you recalibrate your return policy to limit the damage of fraud without compromising the process for honest customers.
Make these adjustments in time, and you can be prepared to benefit from a surge in volume while minimizing the losses incurred down the line.
Meta title: Make These Adjustments to Improve Your Online Returns in the New Normal
Meta description: With the increase in online shopping after the pandemic, the future of e-commerce looks bright. But the problem of returns is set to grow even bigger. Here’s how you can adjust to that challenge.
