Everything you Need to Know about a Returns Management System

Point of View
A woman viewing her notebook in front of a conveyer belt with boxes

Managing product returns is a core function for retailers and ecommerce companies. An average of 8% of retail products are returned, and as much as 40% are returned for ecommerce buys.

In the B2B world, manufacturers and 3PLs are reacting to a big increase in online purchases (up nearly 12% in 2020 according to McKinsey), as well as complicated returns processes with factors like warranties, repairs and recalls.

Despite the frequency of returns, few B2B or B2C organizations have optimized their returns processes for efficiency and cost.

This is where a returns management system (RMS) comes in. Let’s take a look at what it could do for your organization.

What is a returns management system?
A returns management system coordinates and streamlines every aspect of the returns journey and after-sales care management for B2C, B2B or hybrid companies. It can be configured to a customer’s own processes and requirements, and it fully integrates with other supply chain solutions.

It is a cloud-based, SaaS solution that delivers two major functions:

  1. Manages the entire, end-to-end returns process based on an organization’s specific needs
  2. Centralizes/analyzes returns-related data from other core supply chain software

Managing the returns process
From start to finish, an RMS manages everything that goes into the returns process, whether it’s a B2C, B2B or hybrid environment. This includes returns processing, repairs, return-to-vendor, customer portals, returns merchandise authorization (RMA) initiation, and customer notifications. Configurable workflows drive a faster returns process, standardize tasks and improve accuracy.

Centralizing and analyzing returns data
Because an RMS fully integrates with other supply chain software, it delivers game-changing insights into returns. It enables users to view analytics within every module, queue and order. Relevant data and business intelligence are easily accessible, as well as reports. No more point solutions or relying on warehouses and 3PLs for returns data! Centralize data in an RMS for maximum insight.

What are the benefits of a returns management system?
An RMS saves time, money, and makes for happier customers. We’ve seen organizations report up to a 5% increase in profits and a 15-25% increase in customer satisfaction after streamlining and optimizing their returns.

Here are a few specific reasons to consider a returns management system …

Employees are spending a lot of time on returns processing
If employees don’t have standardized, digital workflows to help them efficiently receive and process returns, an organization is likely losing money. The same is true if there aren’t clear rules and processes around managing warranties or repairs.

Costly crediting problems
Error rates drop drastically when an organization has more control and when returns are verified. For instance, with an RMS in place to record an actual item count, a manufacturer will only credit its dealers for actual received inventory, which will be verified in the system prior to crediting.

No visibility into returns trends
If you don’t have visibility into why an item is being returned, or you’re missing return trends, then valuable ways to save money or fix the situation are being overlooked. Multiple point solutions can’t give the full picture, either: Only an RMS can pull all the pieces together to solve the entire puzzle.

For 3PLs, a new revenue stream
An RMS delivers tremendous value for 3PLs when it supports a new service or revenue stream. For example, a 3PL offering returns management delivers better visibility, reporting, and processing – for itself and for its customers. This can significantly improve profit margins and dramatically differentiate itself from competitors.

What features should a returns management system have?
When looking for software to manage reverse logistics, here are five of the most important features to consider:

  • A user-friendly, branded customer portal for returns initiation
  • In-depth RMA management
  • Business intelligence at every step of the returns proces
  • Automated communications to keep customers informed and engaged
  • Disposition management to expedite resale opportunities or cost recovery

Customer portal
Customers – notably B2C but increasingly B2B – expect convenient returns tools and easy visibility into their returns status. A fully branded online portal allows them to initiate, track, and manage the entire process from start to finish, such as: product registration, contacting support, returns merchandise authorization (RMA) and printing labels.

RMA management
RMA management allows store associates, support associates and return center associates to work with the same data and information. Organizations can manage and clear discrepant returns, as well as create rules for different types of returns and grading at receiving – all to expedite the disposition of the returned product.

Business intelligence
The first step in slowing down returns is having good data about what is being returned and why. Look for comprehensive data and in-depth reports to inform better decision making, to optimize returns, and to stay ahead of trending problems. Help find inefficiencies in a reverse logistics process and better manage returns in the future.

Automated communications
Without reverse logistics software, a lot of customer and team communication has to happen manually. An RMS should include automated notifications about the status of a return to help build trust and engage consumers, encouraging them to make future purchases based on a positive returns experience.

This also removes unnecessary work from a customer service team who won’t have to field customer calls wondering about the status of a return.

Disposition management
Getting returned items to the right place quickly helps minimize losses. It also helps keep products moving so they don’t languish in a warehouse or the back of a store. Disposition management helps determine what to do with returned products, such as:

  • Return it to warehouse or store shelves, and tracking that as inventory on your website so the product information is accurate
  • Mark it for clearance or other sale pricing to recoup some of the costs
  • Get warranty claims to the right internal teams for repair
  • Identify return to vendor (RTV) items for a refund or credit
  • Identify items that could be refurbished and resold, and sending those to the appropriate place for refurbishing
  • Send it for recycling if it’s made of materials, or to the landfill

Which industries benefit most from an RMS?
Returns management will improve efficiency and reduce costs for nearly any industry. But those with high or growing rates of returns – such as retail and ecommerce brands, manufacturing and 3PLs – stand to gain the most.

Retailers and ecommerce brands
An RMS delivers a total branded returns experience that facilitates fast and easy returns, as well as automated notifications to keep customers informed of the return status. It enables retail and ecommerce employees to inspect and grade items quickly, resolve customer issues faster, centralize returns data, and disposition returns as early as possible in the cycle.

Process returns, return-to-vendor items, perform repairs and refurbishments, and complete put-aways with one platform. An RMS can provide manufacturing-specific workflows drive a faster returns process, standardize tasks and improve accuracy. Plus, drive customer loyalty with an easy returns process – rare in the world of complicated B2B returns.

Configure workflows and requirements for your business and customers across warehouses and shipping locations. An RMS is built to handle 3PL and customer complexity, fully integrating with other supply chain solutions and delivering a fast ROI (at a fraction of the cost of configuring a WMS).

Ready to learn more?
For more details on what an RMS can give your business, take a look at the unique ReverseLogix platform. We’re the only end-to-end, centralized RMS built for retailers, ecommerce brands, manufacturers and 3PLs.

Learn more about ReverseLogix RMS Platform