Prepare for the Holiday Returns Rush with Returns & Repairs Management
The holiday returns season will be upon us soon, and now is the time to plan ahead. Each year, this influx of returns can overwhelm unprepared businesses. It’s time to get ahead of things and prepare for holiday returns with ReverseLogix.
Your returns management system (RMS) is a crucial tool for handling the surge efficiently. You’ll need to plan what to do with damaged items. Consider whether you can repair expensive items and what you’ll do with those you can’t.
Fortunately, you don’t have to go it alone. A partner like ReverseLogix can help you get ahead of holiday returns before they even begin. Read on to learn how.
Rise of Online Holiday Shopping & Returns
It’s no secret that we do more holiday shopping online than ever. The convenience of online shopping and broad events like the pandemic have driven this industry shift.
As more and more people purchase gifts online, online returns are similarly on the rise. The cost of returns to retailers likewise is rising. You must review your holiday returns policy before the holiday shopping season starts.
The Growth of Online Sales & Returns
Online holiday sales are continuing to grow year-over-year. According to Forbes, online sales rose by nearly 5% in 2023. In November and December 2023, online sales accounted for over $200 billion. $12.4 billion was spent on Cyber Monday alone.
EMARKETER predicts that online sales will grow by nearly 10% this year. In fact, they note that the holiday shopping season is getting longer, bleeding into October and continuing through the end of the year. As online sales increase, so do the costs associated with returns.
The Impact of Online Holiday Shopping On Returns
More online shopping often means more returned products. This increase could be due to several factors, including:
- Fit problems: Consumers can’t try on the items they purchase online, so it’s natural that sometimes they won’t fit as expected.
- Feel problems: If a fabric isn’t as soft as expected or an item is heavier than expected, it may result in a return.
- Unmet expectations: In person, the item doesn’t match the customer’s idea.
- Damage during shipping: When items get banged around in transit, they could sustain damage, resulting in returns.
Consumers expect free online returns and easy ways to get a refund. You’ll need to plan for reverse logistics to get your items back and then deal with the returned merchandise. Being unprepared can overwhelm your warehouses, increase costs, and lead to customer service issues.
The True Cost of Holiday Returns: Direct & Indirect Costs
When considering the cost of returns this holiday season, there are three types of expenses. If you want to minimize the cost of returns during the holiday season, you’ll need to consider all of them.
First are the direct financial costs. These include the costs of returned items, of course, but they go far beyond the simple stock cost. There are also processing costs, the cost of restocking and reselling, and return shipping fees.
Next are indirect operational costs. These may be easily overlooked but can significantly impact your business. They include expenses related to inventory management and warehousing. You can even factor in missed opportunities due to resources tied up in returned merchandise.
Finally, you have costs related to customer experience and long-term costs. These may include a loss of customer loyalty due to unmet expectations. Your brand’s perception may take a hit. Or these could have positive impacts. Brands with excellent customer service and returns policies are at an advantage. They often earn consumer loyalty by making things right quickly.
Product Return Challenges: Damages, Defects, & Buyer’s Remorse
Product returns during the holiday season are often driven by three primary factors: damages, defects, and buyer’s remorse. These returned products can create significant operational challenges for your business.
Your team must handle a returned product differently than a new one. You can’t simply resell a product that a customer didn’t want. First, carefully examine it to ensure it hasn’t been damaged or otherwise used. Then you must repair or otherwise renew it. Finally, you’ll likely need to resell it as “used” or “scratch and dent,” offering a discount for its condition.
If your team isn’t properly trained or you don’t have the right procedures in place, product returns can become a significant hindrance. You need an appropriate repair management system to ensure that the products you receive as returns are renewed and ready to resell.
How You Can Prepare for Holiday Online Returns
The best way to prepare for holiday returns is to prepare your returns management policies and procedures now. You don’t want to have to train your people on new processes during the holiday rush. Instead, you want everything in place before the shopping season begins. Here are some steps you can take to prepare your team and your business for post-holiday returns.
Analyze & Understand Customer Behavior
The first step to reducing the expenses related to customer returns is to understand why items are being returned in the first place. Look at the data from your recent returns and try to spot any patterns you may notice.
If items are arriving damaged, you might need to change your packaging materials. If they are faulty, you might need to look into more reliable sourcing. If you’re seeing a lot of returns due to unmet expectations, it might be time to update product descriptions and images.
Anything you can do to reduce the number of returns requested will immensely help your business. It will cut down on the expenses related to returns and improve customer service and public perception of your brand.
Clearly Communicate Your Returns Policy to Customers
Next, it’s time to review your returns policy and holiday returns policy. Do you pay for return shipping or is that your customers’ responsibility? How long do customers have to initiate a return if they’re unhappy with a purchase? Is there a longer deadline for holiday gifts? Is there a required condition for returns?
Make sure you’ve clearly communicated your returns policies to customers. Don’t hide it on a page where the average shopper will never see it. Instead, place it somewhere where every shopper is likely to encounter it. The most important part of customer service here is setting appropriate expectations at purchase time.
Prepare Your Staff for the Influx of Returns
Comprehensive staff training is an absolute must for the holiday season. Ensure customer service reps know your policies and can communicate them clearly. Also ensure that they understand how and why exceptions to policy may be granted.
Prepare your warehouse staff to handle the boost in outgoing packages and the influx of returns. They must be familiar with your repair management system from start to finish. They should know how to log incoming packages so that customers get credit. They also need to know what to do with the goods once they’ve been logged.
Properly Manage Your Inventory
Effective inventory management is vital during the holiday season. The upswing in sales and returns can disrupt stock levels if you don’t plan for it carefully. Sellers need to balance their inventory levels throughout the season. You want to keep enough inventory to meet demand. At the same time, you don’t want to be stuck with overstock, which can lead to excess inventory costs.
Returned items can further complicate inventory management. The key is to process and reintegrate them into your stock as quickly as possible. Items that can’t be restocked require a cost-efficient return to vendor strategy. An effective returns management system will help you fulfill new orders efficiently.
But how do you effectively manage inventory during high return periods? The best option is a real-time inventory tracking system. You need a system that gives you accurate, up-to-date information on stock levels at a glance. You also need to swiftly process returned items.
Foster collaboration between inventory management, customer service, and warehousing teams. Working together, they can efficiently process returns and help balance inventory levels. Your aim is to minimize disruptions and ensure customer orders are fulfilled quickly.
Create a Customer-Centric Holiday Returns Policy
For today’s online consumer, there are three vital ecommerce policies to look for:
- 83% seek free shipping.
- 65% look for a secure payments process.
- 64% want a free or easy returns policy.
That’s right — easy returns are right up there with keeping customers’ credit card numbers secure. Shoppers want to ensure that they can easily return items that arrive damaged, defective, or otherwise not as expected. You could miss out on sales if your returns policy is unnecessarily complex or restrictive.
Ensure your holiday returns policy is both clear and simple. As much as possible, ensure that it’s flexible and generous. And initiate proactive communication with your customers. Make sure they’re aware of your sterling policy from the start.
Understand & Address the Challenges Customers Face
Your customer service needs to empathize with your customers. They need to understand and acknowledge customers’ challenges when returning items. Consider the inconvenience and complexity of returns. Acknowledge how this can cause frustration. The last thing you want is for returns to negatively impact their experience with your brand.
Online retailers must effectively address these challenges. They should focus on a simpler returns process. Provide clear instructions and ensure easy access to a free online returns portal. Offer free return shipping, waive restocking fees, and process refunds as quickly as possible. A customer-friendly process can significantly improve the customer experience.
Consider In-Warranty Repair Options
In-warranty repairs are a huge benefit to both customers and your warehouse. Repairing broken items and returning them to consumers is typically more cost-effective. It extends a product’s lifespan and reduces waste.
On the back end, invest in an effective and efficient repair management system. Get techs who know how to repair your products. You’ll need to track the item from the consumer to your repairs facility and back again. Also, keep an inventory of parts to ensure techs always have what they need to repair items.
Set Expectations with Customers On the Front End
Nothing can derail your brand and your returns policy like improper expectations. You need to ensure that all product pages provide appropriate and clear descriptions. Clearly include information like dimensions, accurate images, and transparent shipping times. Finally, the conditions of returns and how the process works should be clearly stated. By ensuring that customers understand your products and policies, you’ll head off problems before they occur.
How a Returns Management System Eases the Holiday Returns Rush
A Returns Management System (RMS) is essential for any online retailer. It streamlines the complex returns process during the holiday rush. An RMS automates several steps in the process to improve customer communication and boost loyalty.
The Advantages of a Robust Returns Management System
A Returns Management System like ReverseLogix is your key to reducing post-holiday stress. It can boost operational efficiency by automating and streamlining the returns process. An RMS tracks each step from the moment a return is authorized to its final disposition. It ensures each stage is handled swiftly and accurately, reducing time and labor.
In addition to operational benefits, a robust RMS greatly enhances the customer experience. It offers faster processing times and real-time updates on the status of returns. Customers enjoy a more transparent and hassle-free process. It can even personalize return options with easy exchanges or flexible store credits.
The Limitations of a Traditional System in Managing Returns
Inefficiencies often plague manual returns management systems. They’re also prone to errors, especially during high-volume periods like the holiday season. They slow down workflows and increase labor costs and the potential for mistakes. They typically can’t offer real-time tracking, which can lead to lost or mishandled returns.
These systems also have slow processing times and limited communication. These limitations compromise the customer experience. Customers expect quick resolutions, particularly during the holiday season. It’s a feature that traditional systems can’t offer. Instead, their lack of transparent communication leaves customers in the dark. This issue can destroy customer loyalty and damage your brand’s reputation.
Repair Management: An Integral Part of Returns
A repair management system is a vital piece of your returns strategy. It’s especially key for high-value or complex products. By offering repair options, retailers can resolve issues cost-effectively. Repairing damaged products can help brands reduce the financial impact of returns.
Managing Product Repairs for High-Value Items & Technology
Repairing high-value items and technology products presents unique challenges. These items involve specialized components, tools, and expertise. The repair process can be both intricate and time-consuming.
Customers who invest in high-value products expect high-quality repairs. They also expect quick turnarounds. These expectations require retailers to adopt a more efficient repair management approach.
To manage repairs effectively, retailers should employ specialized repair techs. They should have all the necessary expertise and tools to handle complex tasks. Advanced tracking is also crucial, as is real-time monitoring of repair progress.
Challenges Companies Face Without a Repair Management System
If your company doesn’t have a repair management system, you’ll likely run into some problems and have inefficient repair processes. Examples include manual tracking and processing as well as disorganized workflows for your techs.
These problems lead to a lack of communication with customers, keeping them in the dark about the status of repairs. Quality may also be inconsistent from one job to the next. All of this adds up to a poor customer experience and damage to customer loyalty.
Automation & Efficiency in Returns & Repairs
The best way to manage post-holiday returns is through automation and efficiency. An RMS like ReverseLogix will help you handle returns quickly and minimize the cost of returns. It can also help you manage and track repairs for items that are under warranty.
To learn more about how we can help you improve your returns process and boost customer satisfaction, schedule a demo or check out our pricing plans. We’ll be happy to show you all the benefits that ReverseLogix can offer your brand.
