Shippers using a WMS to Manage Returns are Grappling with these 5 Challenges

A forklift driver sitting in a forklift in a warehouse

Here are five challenges that e-commerce companies, brands, and multi-channel retailers encounter when they try to use a warehouse management system (WMS), point systems, and spreadsheets to orchestrate the returns management process:

  1. No clue why products are coming back. Knowing that an average of 30% of all products sold online (and 8-9% sold offline) are going to make their way back to them, companies need good oversight over this aspect of their supply chains. If they’ve cobbled together a customer portal (for issuing RMAs and shipping labels) and numerous point systems, these organizations never really know when a product arrived, what condition it was in, whether a customer credit was issued, and other critical details. With each of these steps handled by different systems, companies never get a 360-degree view of the returns.
  1. Uninformed engineering and manufacturing teams. Some products are returned because customers ordered the wrong thing or too many of a specific item, but others may be broken or defective. Unfortunately, your WMS can’t tell you why a customer returned a product. With a returns management system (RMS), you get valuable insights that can be fed back to the engineering or manufacturing team (or, your supplier’s teams) and then used to correct the problem at the sources.
  1. Zero product seasonality visibility. Sometimes products come back a few months after they were shipped. By that point, they may not even be saleable (or at least not at full price), and particularly if they’re seasonal in nature. An intelligent RMS knows exactly when to tell a consumer to keep the product (in exchange for credit) to avoid additional returns shipping/processing charges, or to ship the sweater to the closest returns center (i.e., one that’s lacking in that inventory, which is being sold online at a discount).
  1. No self-service capabilities for customers. Anytime customers can orchestrate the returns processing on their own means with less intervention on the company’s part, frees up more manhours to focus on more important tasks. Borrowing a page from Amazon, the ideal scenario works like this: Visit the company’s website, select your order, tell why you’re returning the product, pick your shipping preference, and print out a label (or, even better, have the person at the ship center scan the barcode on your phone and print a label for you).
  1. Poor omnichannel returns management. From the omnichannel perspective, when a customer buys online and then visits a store to return a product, the store’s point of sale (POS) system isn’t connected to its online order management system. Using RMS, the same customer can start the returns process online and be directed to the closest brick-and-mortar store to take the product back.

An RMS helps companies increase customer satisfaction by anywhere from 15-25% thanks to easier returns processing, faster credits, and omnichannel capabilities. And because they’re using a single, unified platform to recover the products, organizations have a clear view of what’s coming back, when it will arrive, and what needs to happen when it gets there. They also know that they’re not losing money on those returned items. Combined, these “wins” help companies improve their overall profitability by about five percent.