10 tips on how retailers can improve their returns management at Christmas
Published on: December 19, 2022
Updated: August 28, 2023
After Christmas, online retailing is in for a real treat: a peak in returns is imminent. Retailers who use an online returns portal are significantly ahead of the competition, which still relies on enclosed returns labels.
In order to protect their return on sales in already tight economic times, online retailers need to make their returns management as efficient as possible. We have put together ten tips on how web store operators can process their Christmas returns as efficiently as possible.
1. Query reasons for returns online via a returns portal and offer alternatives
There are many reasons why customers return Christmas gifts. The knitted sweater is too small. The remote-controlled car is defective. And the poster with the Eiffel Tower just doesn’t appeal. If you only ask for the reasons for returns via a paper slip, you may have your statistics under control, but you’re giving away the chance to respond to these reasons. With an online returns portal and the corresponding processes in the backend, retailers can offer their customers a sweater one size larger, exchange the broken remote-controlled car for another one as quickly as possible, and present alternatives to the Eiffel Tower motif. Ideally, this will keep the money customers have already spent in their own coffers.
2. Give customers the choice between cash back in 14 days or instant credit in the form of vouchers
A recent consumer survey by parcelLab from August 2022 shows: For every third online customer, the refund of already paid amounts is also interesting in the form of vouchers. Online retailers can make this form of refund even more attractive by, for example, adding another ten percent of the invoice total to the refund amount via credit notes or by issuing credit notes as soon as the customer has registered the return in his online account.
3. Waive the return of defective goods
If customers indicate a defect in the goods as the reason for the return via the online returns portal, it may be cheaper for online retailers to refund the purchase price without the customer having to return the package. Here, it is worthwhile to make a precise cost-benefit calculation in advance.
4. Speed up returns with staggered return costs
Free returns and generous return periods are an important lever for improving conversion rates, especially in the run-up to Christmas. On the other hand, unwanted gifts that sit with consumers for a long time instead of being returned are dead stock for online retailers. With a clever move, online retailers can align their own economic interests with those of consumers. For example, customers could be offered the opportunity to return goods free of charge within seven days of the Christmas holidays. Those who send their returns later will pay a handling fee.
5. Lower your returns rate with a clear set of rules
Many retailers grant generous cancellation periods before Christmas. It is all the more annoying when customers abuse the generosity even further and return goods even after the granted return period. With return labels in the package, retailers lack a handhold against returns that are too late, since in case of doubt the goods are already with them at the returns center. With an online returns portal, on the other hand, online retailers can manage compliance with deadlines more effectively by at least not having a returns label generated automatically once the return period has expired. How accommodating customer service then reacts can then be regulated depending on the customer lifetime value, for example. There are online retailers who have been able to reduce their returns rates by five percent simply by taking such action.
6. Use the information from the online returns portal for capacity planning in the returns center
In the days after Christmas, online retailers who still rely on return labels enclosed in a parcel have no idea what volume of returns awaits them in the coming weeks and how high the proportion of returns that can no longer be re-collected as A-goods will be. It is only when the logisticians tip the unwanted orders into their own yards that the extent of the mess becomes visible. This does not happen with an online returns portal. Here, retailers can see at any time which products are coming back to them and when, plan their capacities in the returns center according to demand, and credit customers for their returns more quickly.
7. Use the online returns portal to strategically distribute the returns load
While the return address is printed unchangeably on enclosed returns labels, retailers who use an online returns portal can change the return address dynamically. For example, retailers that also use their own stores to process returns or operate multiple fulfillment centers can dynamically distribute the load across different shoulders, ensuring fast processing times even during peak periods such as Christmas.
8. Reduce customer calls to the call center by providing proactive information
Especially after Christmas, online customers wait especially impatiently for their returns to be processed. The annoyed call to the online store’s call center is almost pre-programmed. An online returns portal provides customers with proactive information about the current processing status of their returns without having to contact customer service.
9. Use status update e-mails for cross-selling and upselling
Customers should not only be able to access information about the whereabouts of their return in their customer account, but should also be informed via transactional e-mails about relevant steps in the processing process, be it receipt of the return, verification or refund of the purchase amount. Because such mails have high open rates, retailers should use the potential to point out alternative products or interesting bargains and thus convert the returner to a repeat buyer.
10. Proactively apologize for delays in processing
An online returns portal not only makes it transparent how much returns will be received. It also helps measure how long it takes to process a return. If these threaten to get out of hand, retailers can proactively apologize to customers who have registered a return with a small voucher and thus defuse the impending trouble in advance.