9 Overlooked Returns Management Mistakes to Avoid
Rebecca Fox

March 12, 2023

It’s easy to make mistakes when it comes to handling returns, from not having a clear return policy to not leveraging return data to seeing returns as negative.

By understanding some of the most commonly overlooked mistakes in returns management, you can prevent problems and prioritize your efforts to create a more efficient returns process.

9 Overlooked Returns Management Mistakes to Avoid

Steering clear of returns management mistakes is key to effectively managing returns, boosting customer satisfaction, and reducing costs.

Here are some common mistakes in returns management, along with some of the best returns management tips for avoiding them.

1. Not Having a User-Friendly Returns Process

When your returns process is confusing and unclear, customers may not know how to initiate a return or what to do if they encounter a problem. This can lead to a decrease in the number of returns, as customers may simply abandon the process out of frustration.

84% of customers would stop doing business with an online store after a bad returns experience.

Moreover, a confusing returns process can lead to inefficiencies, as customers are more likely to contact customer service for assistance, adding to the workload of the customer service team and increasing return processing time.

Simplifying the returns process for your customers can greatly improve their experience and reduce frustration. This includes providing clear instructions on how to initiate a return, the steps involved, and a self-service return portal to make it easy for customers to initiate a return.

Returns Management Tip

Provide a user-friendly, easy-to-understand returns process that includes clear instructions on how to initiate a return.

2. Not Having a Clear Return Policy

Without a clear return policy, customers may not know what to expect when they initiate a return. This can lead to misunderstandings and disputes, as customers may have different expectations for the return process.

A clearly-defined return policy is essential for avoiding confusion and establishing trust with customers. 

Customers want to know what to expect when they initiate a return, and a clear return policy provides them with the information they need.

Your return policy should include:

  • Eligibility for returns (timeframe, eligible products)
  • Steps in the return process (initiating a return, required documentation)
  • Expected outcome for the customer (replacement, refund, store credit)
  • Fees associated with returns (restocking fee, return shipping fee)

Clearly communicate your return policy across all your channels, including your website, email notifications, and product pages.

Returns Management Tip

Create a clear return policy that is easily accessible and clearly states the conditions for returns, including what items are eligible, how long customers have to initiate a return, and how the returns process works.

3. Not Viewing Returns as Positive

One of the most common mistakes in returns management is viewing returns as something negative. This mindset can lead to an inefficient returns process, which can increase costs and the amount of time it takes to complete the return.

Additionally, if you only see returns as a negative thing, you’ll miss out on the opportunities that returns can provide, such as the ability to gather customer feedback and insights into customer preferences and shopping habits.

It’s important to recognize that returns are a normal part of eCommerce and can even be an opportunity to improve the customer experience and build customer loyalty. 

A smooth and customer-friendly returns process can improve customer satisfaction and loyalty, leading to repeat business and word-of-mouth recommendations. Returns can also provide valuable insights into customer preferences and purchasing habits, which can be used to improve product offerings and the overall customer experience.

With a positive approach to returns, you can turn a potentially negative experience into a positive one and improve the customer journey.

Returns Management Tip

Take returns as a way to understand customer preferences and improve your products and customer satisfaction, rather than as a burden.

4. Not Leveraging Return Data

By not leveraging return data, you miss out on the opportunity to improve the customer experience, increase customer satisfaction, and make your returns process more efficient. 

Analyzing your returns can help you identify common return reasons such as sizing or product defects, which can then be addressed to reduce the number of returns and improve the customer experience.

Your return data can also be used to optimize the returns process, identify inefficiencies, and reduce costs. By analyzing your returns, you can determine the most cost-effective shipping methods, improve the speed of the returns process, and ensure a smooth customer experience.

Use your return data to analyze return trends, customer preferences, and the effectiveness of your return policy. Using this information, you can make informed decisions and continually improve your returns process.

Returns Management Tip

Use ReturnGO to track and analyze your return data to gain insights into your returns patterns and improve your returns process.

5. Not Automating Your Returns

Handling returns manually is a common mistake in returns management, particularly for small and growing eCommerce businesses. 

Manually managing returns leads to errors in record-keeping and a lack of visibility into return data and trends. This can also lead to inefficiencies in the returns process, as your team has to spend time processing returns instead of focusing on other tasks.

Efficiency is key when it comes to managing returns. More and more eCommerce stores are turning to automated returns management systems (RMS) like ReturnGO. ReturnGO helps you automate the entire returns process, from tracking returns to providing return shipping labels to analyzing return data.

Automating your returns can improve efficiency, reduce errors, and speed up the return process.

Returns Management Tip

Automate your returns process with returns management software such as ReturnGO to simplify returns management, increase accuracy, and easily track and manage your returns in one place.

6. Not Prioritizing Exchanges

Another often-overlooked returns management mistake is not prioritizing exchanges over refunds. While it may seem easier to simply give customers a refund, this would be a missed opportunity to retain revenue and establish a lasting relationship with the customer.

By prioritizing exchanges, you can turn a potentially negative experience into a positive one, showing customers that you value their business and are committed to providing an excellent experience.

Using a ReturnGO return portal can help you better understand the reasons for returns and make it easy to offer seamless exchanges for another variant or another product altogether, all from within the return portal.

For example, if a customer returns a jacket because they didn’t like the color, offering to exchange it for the same product in a different color can provide an easy solution.

Returns Management Tip

Prioritize exchanges to retain revenue from returns and keep customers instead of losing them after one purchase.

7. Not Limiting Your Return Eligibility Rules

When customers can return items without any restrictions or limitations, it can lead to abuse of the system and an increase in fraudulent returns. 

To avoid this mistake, clearly define and communicate your return eligibility rules to customers, making it clear what the conditions are for returning and exchanging items. 

Return conditions can include limitations on the timeframe for returns, the condition of the item being returned, and the type of item that can be returned.

Limiting your return eligibility rules can help you better manage and process returns, reduce the likelihood of fraudulent returns, and ensure that your customers understand the limitations on returns before purchasing.

Automating the return process with an online return portal can help you limit your return eligibility rules. Using ReturnGO, you can set up rules and conditions to ensure that only eligible returns are accepted.

Returns Management Tip

Establish clear return eligibility rules and automate the process to better manage returns and prevent return fraud.

8. Not Understanding the Costs of Returns

Without a clear understanding of the costs of processing returns, it can be difficult to assess the full impact of returns on the bottom line and identify areas for improvement.

Costs associated with returns management can include:

  • Labor
  • Storage and inventory management
  • Equipment
  • Shipping
  • Non-resellable inventory
  • Software

Track your returns management costs, including return costs per item, unsellable inventory costs, and costs associated with processing returns.

By tracking your returns costs you can identify areas where costs can be reduced and develop strategies for managing returns more efficiently.

Reduce your return costs by improving the efficiency of shipping, warehousing, and processing returns.

Automating your workflows can help reduce the costs of managing product returns by streamlining the process of handling returned items. 

With the right technology, such as a returns management system, you can fully automate the returns process, which helps reduce errors and improve efficiency, thus reducing returns costs.

Returns Management Tip

Track the cost of returns and automate your workflows to reduce returns management costs.

9. Not Preventing Return Fraud

One of the biggest challenges in returns management is dealing with return fraud.

Return fraud is the act of returning products for illegitimate reasons to get a refund. Some common types of return fraud include returning damaged, used, or stolen products, or using counterfeit receipts to claim a refund.

Not taking action to prevent return fraud can be a costly mistake, leading to financial losses and an increase in operational costs. The US retail industry suffers annual losses of around $24 billion in return fraud and return policy abuse, making up an average of 8% of returns. 

To prevent fraudulent returns, implement clear return policies and processes to validate the legitimacy of returns. 

Set clear restrictions on the timeframe for returns, the conditions in which products must be returned, and the types of products that are eligible to be returned.

Technology can also help you prevent return fraud. There is various return fraud-detecting software that can help you identify and prevent fraudulent returns. 

For example, you can track product movement throughout your supply chain with barcode scanning technology to detect and prevent fraudulent returns and use analytics tools to identify patterns of fraudulent behavior, such as multiple returns from the same customer or repeated high-value returns.

Returns Management Tip

Establish a clear return policy and use technology to detect and prevent return fraud.

Streamline Your Returns

Efficient returns management is a crucial aspect of running an eCommerce store, and avoiding the common mistakes highlighted above can help you create a smoother and more cost-effective returns process.

By having a user-friendly returns process and return policy, as well as utilizing return data and automation, you can improve the customer experience, reduce costs, and optimize your returns process.

ReturnGO can help you implement the returns management tips mentioned above to streamline your returns.

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