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Guide to Retail Returns Management: How Do Top Retailers Manage Returns?

Tobias Buxhoidt

Published on: Apr 1, 2023

what is retail returns management

Returns processing is almost like cleaning up a mess in your home; it’s a tedious chore, but someone has to do it to keep the household running smoothly. 

Similarly, no retailer wants to handle product returns—they’re messy and inconvenient, but you need to manage them well to maintain healthy customer relationships. 

parcelLab’s State of Online Order Returns found that 78% of customers have had to return an online purchase, which tells us that product returns are quite common in ecommerce. Moreover, the vast majority of consumers (92%, according to our survey) indicated that a retailer’s returns policy influences their purchase decisions.

All this to say that retailers can’t afford to neglect the returns experience. Keeping shoppers coming back requires you to create a smooth experience across their entire shopping journey—from the point of sale and order fulfillment all the way to returns.

In this article, we’ll explore some key strategies and examples for managing online returns efficiently, so you can reduce costs and improve customer satisfaction.

At a glance: top reasons behind returns (and how to fix them)

Before diving into specific tactics, let’s take a look at the most common reasons consumers return products, and how you can address them.

Reason for returnBest practice
Fit/size issuesProvide detailed sizing information on your website. Consider using AR to encourage customers to “try” products virtually.
Damaged/defective productsImprove QA and internal processes.
The product was vastly different than what was shown onlineTake high-res photos that accurately depict products. Consider using AR to encourage customers to “try” products virtually.
I received the wrong orderAutomate order management processes to reduce errors. Improve QA and internal procedures.
The order didn‘t arrive on time/late, so it is no longer neededOffer estimated delivery dates to give customers an idea of when to expect orders.

How to Efficiently Manage Retail Returns

Start with efficient checkout and delivery processes

The adage “prevention is better than cure” rings true in the realm of online returns. The best way to “deal with” returns is to . Set proper expectations by providing accurate product photos and detailed product descriptions so shoppers know exactly what they’re purchasing.

Offer estimated delivery dates

It’s a good idea to provide delivery estimates on the product or checkout page to give shoppers an idea of when their products will arrive. Doing so reduces the risk of shoppers finding the product elsewhere or refusing a delivery that doesn’t arrive quickly enough.

Need help implementing this? With parcelLab, you can display delivery date forecasts on your website to improve transparency and build trust.

how estimated delivery dates help in ecommerce

Delivery notifications

When products are in transit, make it a point to provide , ideally using an automated solution. parcelLab, for example, can send messages when shipments are delayed. This keeps customers in the loop and reduces the likelihood that they purchase the product from a competitor.

Offer clear instructions for returns

When returns do take place, clear and simple-to-follow instructions are key. Make information on your returns process easy to find. For instance, rather than burying returns information in an obscure help center article, make the content visible on your website footer and FAQ.

The retail chain Target offers a comprehensive returns policy, including details on how to return items and the timeframe for returns. The link to Target’s policy is located in the “Help” section at the bottom of its website.

accessible product returns instructions on website

Having returns information in your post-purchase customer comms is also beneficial. You can, for instance, include return instructions in your customer emails or account page so shoppers can easily find them if they need to return an item.

Or better yet, add a link to your returns portal so shoppers can initiate the returns process themselves.

Implement self-service returns

A portal is a worthy investment, as it benefits both your team and your customers. A empowers customers to initiate and track returns on their end rather than calling your customer services team. This, in turn, reduces support tickets, freeing up time for agents to handle other customer inquiries.

One brand that’s found immense success with its returns portal is Conrad Electronics. Previously, Conrad sent return labels to customers, which then needed to be attached to the return when shoppers dropped off the package.

Conrad decided to . Instead of sending out a returns label, Conrad launched a system where shoppers could go online to print the label or download a QR code on their smartphone.

This new system gave Conrad more visibility into its returns while making it easier for customers to manage and track product returns. It’s a win-win for both the company and shoppers.

As Silvio Heider, Business Expert Project & Digital Process Management at Conrad puts it, “With the online returns portal we now have a digital and uncomplicated solution with which we know as soon as the parcel is at the counter or with the delivery agent what is coming back and when. We benefit from this, especially in terms of staff planning and we are also faster thanks to automated handling processes.”

easy self service returns process

Make returns as easy as possible with the help of returns management companies

From the customer’s perspective, nothing is worse than jumping through hoops just to return an item. Our data at parcelLab shows that 62% of customers are unlikely to shop with a retailer again after a poor returns experience.

So, strive to make the journey as smooth as possible. Avoid imposing complex approval procedures, particularly when products are still eligible for returns. Making the returns process quick and accessible not only increases efficiency, it can also enhance customer satisfaction and build long-term loyalty.

Offer multiple return options

online vs in store returns management

Give customers options for where and how to return orders. Rather than requiring people to return items via a specific method (e.g., by mail only), offer the opportunity to bring items back to your store or logistics partner.

Our data shows that 47% of shoppers actually prefer to return items in-store, while 34% prefer to do it online.

As such, the best way to keep your customers happy is to provide return options that align with their needs and preferences.

Notify customers at every stage

Communication is the third most important consideration shoppers have when it comes to returns. That’s why it’s crucial to keep shoppers in the loop with regular updates once their returns are in transit.

The multi-channel bookseller Weltbild does an excellent job of proactively communicating with shoppers during the stage (including returns). The company , leveraging our platform’s algorithms to send emails at the most optimal time.

“Thanks to parcelLab, we were able to improve customer communication and make it more transparent,” remarks Christian Sailer, Chairman of Weltbild’s Management Board.

He continues, “Weltbild puts its customers center stage across the entire customer journey – no matter where they are at the time. This gives them an all-round good shopping experience.”

Take a leaf out of Weltbild’s playbook by proactively touching base with shoppers throughout the returns process. Send them an alert when the item has been dropped off, and notify them when your warehouse has received the order and when customers can expect their refund.

By providing timely and accurate drop-off notifications, you can ensure shoppers have a positive shipping and returns experience, which helps build strong customer relationships. Communicating with customers every step of the way shows them that you value their business and their time.

Be sustainable

Consumers are increasingly becoming more conscious of how their purchasing decisions impact the environment. Industry data shows that 66% of consumers are willing to pay more for sustainable products, demonstrating that being eco-friendly is good for business.

In line with this, optimizing your returns process helps your business be more sustainable. Offering in-store returns can reduce CO2 emissions by eliminating the need for customers to ship returns back to the retailer.

Meanwhile, encouraging customers to use QR codes instead of paper labels helps minimize waste.

Collect data to improve over time

One silver lining of product returns is they offer valuable insights that can help you improve your products, marketing initiatives, and internal processes.

Surveys at the end of your customers’ return journey allow you to collect customer experience and product quality data.

In addition, looking at order fulfillment and logistics information helps you glean insights into carrier performance, so you can further optimize deliveries and returns.

Final words on implementing these top returns management strategies

Efficient returns management is crucial for ecommerce retailers to maintain healthy customer relationships and reduce costs. A smooth returns experience across the entire shopping journey—from the point of sale to returns—can help you retain customers and build long-term loyalty.

Communication with customers every step of the way is also vital to forge strong customer relationships.

To learn more about how top retailers manage returns, watch our on-demand webinar on ecommerce returns.

Read all of the Returns Management Playbook Chapters:

  1. Chapter 1 – What is Returns Management?
  2. Chapter 2 – Returns Management: Challenges and Best Practices
  3. Chapter 3 – How to Reduce Your Return Rate: 11 Tips For Fewer Returns
  4. Chapter 4 – What is Self-Service Return?
  5. Chapter 5 – Guide to Retail Returns Management 👈 you are here
  6. Chapter 6 – The Best Return Management Software 👉 read next chapter
  7. Chapter 7 – Understanding B2C Europe Returns
  8. Chapter 8 – The Complete Guide to Retail Returns Marketing

FAQ

What is a return management system?

A return management system (RMS) is a solution that enables businesses to manage and process returns efficiently. It can help retailers streamline the entire returns process, from initiating a return to tracking and receiving products.

An effective RMS typically includes automated returns processing, centralized tracking and reporting, and integration with shipping carriers and other logistics partners. The system may also include customer-facing features such as self-service returns portals and automated notifications to keep customers informed throughout the returns process.

How can businesses improve their return policy?

For starters, ensure you have a clear and concise return policy. Make sure customers know how to initiate a return and the timeframe for returns. You could also consider a longer return time frame. Offering a longer return window, such as 30 or 60 days, can give customers more time to try out a product and feel more confident in their purchase decision.

And if it makes sense for your business, offer free or low-cost returns. Our research at parcelLab indicates that most consumers are unwilling to pay for returns. 53% of customers believe the retailer should cover the cost of returns, and 58% would rather return products in-store to avoid fees.

What is return policy abuse?

Return policy abuse is the intentional misuse of a business’s return policy by customers. It can include behaviors such as returning items that have been used or damaged or returning items after the return window has expired.

Written by

Tobias Buxhoidt