Holiday Returns: Obstacle or Opportunity?

Today's conversations around customer experience typically center on the ideas and strategies for improving marketing and merchandising, seamlessly moving the customer through various channels, and providing exceptional service in-store and online. Very rarely do we hear customer experience conversations happening around the topic of e-commerce returns. However, with the holiday season and inevitable post-holiday returns pending, it's time to take a closer look at how retailers can optimize the returns process.

Retailers that are concerned about delivering the very best customer experience need to be thinking about every potential touchpoint. This extends from the first click all the way through to delivery and returns. If they master the returns process and provide an experience that's pleasant and well-received, they can even turn a cost center into a profit center by driving additional (possibly larger) sales.

I've outlined below a few best practices for optimizing the return process that will give retailers the opportunity to convert one-time holiday shoppers or gift recipients into brand loyalists.

1. Prioritize convenience. To do this effectively, retailers should use a prepaid return label so shoppers can easily return items by leaving them in their mailbox for USPS pick up, dropping them off at their local USPS location/blue box, or setting up free carrier pickup. This makes the returns process far easier for the customer while providing advanced visibility into what items are coming back to your warehouse.

2. Be consistent across channels and touchpoints. Too often, we see inconsistencies in the way retailers handle returns, such as not accepting online order returns in-store; accepting online order returns, but not refunding the full purchase price if the in-store price is lower; or requiring the customer to return on their own without providing a pre-paid label or option to download and print an online label. Being consistent across all touchpoints is critical to satisfying shoppers’ expectations.

3. Proactively communicate transit updates. Proactive, branded communications directly from retailers that provide tracking information on a retail-branded website helps reduce anxiety about refund processing. This helps enhance the customer experience and build trust and loyalty.

4.Plan for the switch to dimensional weight (DIM) pricing. Returns will undoubtedly cause a major headache if consumers and retailers aren't aware of the changes that UPS and FedEx will be implementing after holiday gifts are delivered and before returns and exchanges are made. The changes are expected to affect about one-third of all parcels, and the cost hikes can be substantial.

Consider a scenario where a customer orders four items, but sends one back in the same shipping box. The weight may be less, but the retailer (or customer) will be paying more than they need to because of the box size. Retailers that pack free return labels with their holiday shipments could be blindsided by the cost of returns shipped after Dec. 29 or Jan. 1, when the changes take hold for UPS and FedEx, respectively. Same goes for shoppers who are picking up the cost themselves. They have to understand that size now matters, so returns must be packed efficiently rather than just picking an empty box. Retailers may want to consider diversifying their shipments with a provider that offers a solution that doesn't charge for dimensional weight to offset the costs.

With more touchpoints to master than ever before, many retailers are struggling to deliver a cohesive, branded customer experience. Returns are a key part of the shopping lifecycle and should be considered an important part of the omnichannel mix. This holiday season, remember that the shopping experience doesn't end with a delivered product, but extends beyond into post-sale activities such as returns, exchanges and call-center responsiveness. Prepare for handling returns now and you'll reap the rewards with more satisfied, loyal customers in the year ahead.

Patrick Allard is the director of business development at Newgistics, a shipping company.