3 Ways to Make Returns Profitable for Your Business
Returned merchandise is one of the most difficult aspects of a business, and if it’s not managed well, it can seriously cut into your profits. This is especially true in an online shopping world, where you can expect to see significantly higher return rates than brick-and-mortar shopping stores. If you are struggling with a high volume of returns, there are some things you can do to help make them more profitable and less of a drag on your bottom line. Here are three options.
1: Improve the return-to-shelf time for resale items.
Reselling returned items, either at full price (for items returned in new condition) or at a discount (for open box items) can help you recoup some of the cost of the merchandise. However, in order for this to be a profitable strategy, you need to have an efficient system for tracking merchandise that is returned to your store and ensuring that it gets back to the warehouse, distribution center, or on the shelves of a retail store right away.
For shops that don’t have any returns tracking process, this can be difficult. It gets harder as the volume of returns goes up, and if you don’t have a good tracking system you probably find a lot of items that were sent to the wrong place, stored in a warehouse, or mistakenly disposed of when they could have been resold. Unfortunately you probably won’t know about most of these until it’s far too late to sell it for a good price.
Tracking your merchandise makes it easy to see where the bottlenecks are, find lost items before it’s too late, or discover opportunities to speed up the process to get items back out for resale sooner.
2: Collect and manage return-to-vendor (RTV) items.
Sometimes the items that people return can be sent back to your vendor for a refund, credit, or warranty claim. The biggest challenge for many retailers is simply tracking and sending these items back on time and with the proper documentation or paperwork. Your vendors likely have their own timelines for returned items, which means it is absolutely essential to track them all and ensure that you don’t miss a deadline. Reverse logistics software can make this process easier by allowing you to track everything in a single place, run reports on products that can be RTV, and providing alerts about when you need to send them to get full credit with the vendor.
3: Make returns easy and transparent for your customers.
It might seem counterintuitive that making returns easier for customers is going to help you make money, but a 2018 Narvar survey showed that 96% of customers who have a good return experience are more likely to purchase again from that retailer. With the boom in online shopping (even before COVID it was rapidly increasing), it’s critical to have a simple returns policy that is clear and transparent for your customs. It’s also critical to have automated and frequent communication with customers about the status of their returns. Doing this manually can be hard, but with a returns management platform it is much easier.
Find out more about how you can implement these three steps with a reverse logistics platform by talking to ReverseLogix today.