React When It’s Sent Back

When it comes to processing returns, it’s all a matter of approach. Certainly, nobody wants a lot of returns and processing. But if you approach returns processing as more of an opportunity than a burden, you may be surprised at the results.

“The biggest mistake I see with the returns process is that returns are treated as an operational procedure. But it’s an excellent marketing opportunity,” says Debra Ellis, president of Barnardsville, N.C.-based Wilson & Ellis Consulting. “It’s personalized contact with the customer that you don’t get when a customer orders online or through the mail.”

The bottom line is that customers who’ve had positive experiences returning items tend to be more loyal to those companies. “The best customers you’ll ever have are those that have had problems that were satisfactorily resolved,” she says. “Once they have had a problem, if you resolve the problem quickly and easily, you have increased their sense of trust and loyalty.”

Incorporating a personal touch throughout the returns process — such as sending e-mails confirming receipt of the returned item and alerting customers when the replacement product has been shipped — is a great way to make customers feel like they’re more than just another file number. “These are valuable customers,” Ellis says, “and if things are satisfactorily resolved, they have higher lifetime values than customers that just place orders and have no issues.”

Ellis emphasizes that solid communication all the way down the line ensures that returns are dealt with effectively. “If you start with good communication up front, you’ll minimize your returns on the back end,” Ellis says. “When the returns do come in, those customers will more than likely be resellable, unless the returned products were damaged in the process.”

Provide All Information

Give customers easy access to information on how to return items in the catalog, on the Web site and in the actual shipment itself. Be sure to answer the following questions:
• Does the product have to be returned in its original
packaging?
• Should the tags be left on?

Even though the answers to these questions are obvious, customers should know them ahead of time.

Ellis advises issuing call tags as long as you don’t make customers jump through hoops to put the returns together. They come in handy, particularly if the cataloger is at fault or the product is damaged when it arrives, she says. For high-ticket items, call tags make the most sense. But the process should be flexible enough to take less than cost-efficient scenarios into account. Where refunds are necessary, payments should be credited as quickly as possible.

With less expensive products, they’re not cost-efficient. For instance, she points to a personal incident in which she ordered a set of six plastic storage bins — a low-ticket purchase. When one bin arrived damaged, Ellis contacted the shipper, who immediately issued a call tag so the item could be returned and exchanged.

“But it cost the cataloger more for the call tag than it would have cost if they’d just sent a new bin,” she points out. Although there was an issue of whether the bin was broken, the item was very inexpensive. “Have some fail-safes in there to monitor whether or not to issue a call tag and the product should automatically be returned,” she advises.

Cost Savings

Catalogers with integrated software systems are able to save time and money on processing returns, points out Curt Barry, president of Richmond, Va.-based fulfillment consultancy F. Curtis Barry & Co. “If you have to go into multiple systems, where part is done in inventory, another in accounting and another in the customer service system, the transaction takes longer,” he says.

Some companies, particularly those that project high return rates, might opt to outsource the entire returns management process to third-party providers such as Newgistics, or major carriers, such as United Parcel Service and Federal Express. “This takes the job completely away from the cataloger,” Ellis says, “and expedites the process for both the cataloger and the customer.”

Another returns-related cost to consider is when you need to determine whether a returned product can be re-sold. Like other catalogers, meeting planner and stationery marketer Day-Timers examines all of its returned goods to see whether it’s worth the company’s effort to re-enter products in inventory.

“It’s pretty much a cost strategy determining how much work it’s going to take to refurbish something,” says marketing communications manager Maria Woytek. “Because our returns policy is so liberal, we want to make sure everything that goes out is 100 percent in terms of the quality that the customers are expecting, and that it looks and feels like a high-value product. Nothing goes back into the product area that isn’t perfect.”

But Day-Timers views returns in a way that a solid defense makes for a great offense. “We manage returns on the front end by trying to prevent them,” Woytek points out.

The company invests a lot of money into researching and selecting products it believes clients will be interested in purchasing. Careful attention also is paid to how the product is displayed in the catalog and on the Web.

“We’ve learned that accurately depicting products, both through photos and copy on the Web, as well as in the catalog,” Woytek points out, “is really important enough to keeping our return rate down.”

Carolyn Heinze is a freelance writer/editor based in Vancouver, British Columbia, Canada. You can reach her through her Web site, www.carolyn
heinze.blogspot.com.