The Complete Guide to eCommerce Returns Automation
June 19, 2023
by Rebecca Fox

Returns automation is the future of returns management, revolutionizing the way eCommerce stores handle returns. By automating your returns process you can reduce costs, increase efficiency, and improve your customer experience.

Here’s everything you need to know about returns automation and how to use it for your eCommerce store.

What is Returns Automation?

Returns automation refers to the strategic implementation of technology to automate various aspects of the eCommerce returns process. 

By automating your returns process, you can increase efficiency, reduce costs, and improve customer satisfaction.

Returns automation can help you:

  • Generate return labels – Streamline return shipping label generation and make it easier for your customers to receive return labels.
  • Approve and reject return requests – Automate the verification and approval of return requests.
  • Track returns – Track and monitor the status and location of returned items in real-time.
  • Issue refunds – Automate the process of calculating and issuing refunds or store credit.
  • Verify returned items – Automatically update inventory levels and statuses when items are returned.
  • Notify customers – Keep customers updated on the status of their return by sending automated email notifications.
  • Collect returns data – Collect and analyze data on returns to gain valuable insights and make data-driven decisions.

Using an automated returns system, you can minimize manual work, increase accuracy, and save time and resources. 

The use of automation in returns management has become increasingly popular in recent years, as eCommerce stores increasingly look for ways to optimize workflows and improve the customer experience.

Benefits of Returns Automation

Here are some of the main benefits of automating your returns process:

Increased Efficiency

One of the biggest benefits of returns automation is that it simplifies and speeds up the returns process for both you and your customers. 

By automating returns, you eliminate the need to manually handle each return request, print labels, update inventory, or issue refunds. This simplifies the process and means that customers don’t have to wait for your approval, fill out forms, or contact customer service to request a return, as everything is done automatically and efficiently.

65% of customers say the speed and ease of refunds affect where they choose to buy from, so streamlining your returns process can make a huge difference in conversion rates and customer retention.

Manual processes are often prone to human error, which can result in mistakes such as incorrect refunds or mislabeled items. By automating the returns process, you can minimize these errors and ensure that returns are processed accurately and efficiently.

Returns automation leads to a more efficient returns process that saves time, reduces errors, and improves the customer experience. 

Chat with our experts to boost your customer return experience and LTV today.

Reduced Costs

Returns automation can help reduce the costs associated with handling returns. By automating the process, you can eliminate the need for additional staff or resources, ultimately reducing costs and increasing efficiency.

The following costs are reduced by returns automation:

  • Shipping – Lower your return shipping costs by using pre-paid return labels or offering incentives for customers to keep their items.
  • Labor – Reduce your labor costs by automating the returns process and requiring less manual work.
  • Lost revenue – Decrease your refund costs by offering store credits or exchanges instead of cash refunds.

Improved Customer Experience

Automating your returns process can significantly improve your customer experience, ultimately leading to increased loyalty and higher customer lifetime value. 

Returns are a critical touchpoint in the customer journey, and how you handle them can make or break your relationship with your customers. A hassle-free and streamlined returns process shows customers that you value their time and money and are committed to providing a positive experience.

By automating your returns process, you can boost:

  • Satisfaction – Automating your returns process can improve customer satisfaction by making the returns experience easy and convenient. 

When customers can easily initiate a return request, print a return label, and track the status of their return, they feel empowered and in control of the process. 

  • Trust – A transparent and consistent return policy can help build trust with your customers. When customers know what to expect from the returns process, they feel more confident in their purchase decisions.
  • Engagement – Automating your returns process provides opportunities to engage with your customers. 

Offering personalized incentives or recommendations during the returns process shows your customers that you value their business and are committed to their satisfaction. 

  • Loyalty – Building customer loyalty is essential for the long-term success of your business. Automating your returns process can help show your customers that you appreciate their business and care about their satisfaction. 

By handling returns efficiently and effectively, you can create a positive experience that encourages customers to return for future purchases.

The longer the relationship with an online store, the more customers spend, so putting in the effort to create an exceptional customer experience can increase your customer lifetime value and overall revenue.

Higher ROI

Returns automation is a game-changer for any eCommerce store looking to maximize profitability and ROI. By automating the returns process you can reduce costs, retain revenue, and even generate more revenue.

Some of the ways returns automation can increase your store’s ROI:

  • Reduced fraud and errors – Automating the returns process reduces the likelihood of fraudulent returns and human errors, saving your business significant amounts of money in the long run. 
  • Higher efficiency – Additionally, by reducing costs and improving operational efficiency through automation, you can process returns faster, resulting in higher profitability.
  • Retain and generate revenue – Returns automation also provides an opportunity to offer store credit or exchanges instead of refunds, which can help you retain revenue and generate additional revenue. 

For example, enabling customers to exchange an item for a different product gives you a chance to upsell or cross-sell and increase the customer’s overall order value.

By automating your returns process, your business can improve its efficiency, retain revenue, and generate additional revenue, leading to increased profitability and ROI.

Key Features of Returns Automation Systems

Depending on your business needs and goals, you might want to look for different features and functionalities when choosing a return automation system

Here are some of the key features that you should consider:

Automatic Label Generation

Automatic return shipping label generation is an essential feature of returns automation systems that can save time, reduce errors, and improve the customer experience. 

This feature enables customers to receive a pre-paid return label instantly when they initiate a return request online, which they can print out and use to ship back the returned items.

Automatic return label generation is done through integrations with shipping carriers, which saves time and improves accuracy by eliminating the need to manually generate return shipping labels each time.

Integrating with shipping carriers to generate return shipping labels enables real-time tracking and updates on the return shipment’s status, streamlining the returns process and providing peace of mind.

Seamless Integrations

Returns automation systems offer seamless integrations with other business software and service providers such as warehouse management systems (WMS), helpdesk software, shipping carriers, and third-party logistics (3PLs) providers to streamline the returns process.

  • WMS – By integrating with a WMS, you can improve inventory management, reduce errors in tracking returns, and improve processing times. 
  • Helpdesk – Integration with helpdesk software can help manage customer inquiries and provide real-time updates on the status of returns.
  • Shipping integration – Integrating with shipping carriers enables automatic label generation, real-time tracking, and updates on the return shipment’s status, simplifying the returns process. 

Seamless integrations with third-party software and service providers can automate the returns process even more, making it more accurate and improving the customer experience.

Customizable Return Portal

A customizable return portal provides a self-service platform for customers to initiate a return request. 

Through the return portal, customers can easily initiate a return request, select the reason for the return, and choose their preferred return method.

By creating a branded return portal that reflects your store’s brand style, you can provide customers with a sense of continuity throughout their shopping journey, leading to increased customer satisfaction and loyalty, and a higher likelihood of repeat business.

Providing customers with an intuitive self-service return portal reduces the number of customer service inquiries and complaints, freeing up your team to focus on other tasks.

Real-Time Tracking Updates

Keeping customers informed of the status of their return is an essential part of delivering a positive customer experience. 

Returns automation systems provide the ability to send automated notifications to customers throughout the return process, keeping them informed and reducing the need for manual follow-up.

Send automated return email notifications and customize them to include relevant information such as return status updates, shipping information, and expected refund dates. This level of transparency can help build trust with your customers and enhance their overall experience with your store.

By automating your notifications, customers can receive immediate confirmation of their return request and a pre-paid return shipping label via email. Once the returned item is received at the warehouse, customers can be notified that the item has been received and is being processed. And then when the refund has been issued, customers can be notified of the details of the refund.

Return Automation Rules

Return automation rules enable you to automate actions within your returns process based on criteria that you define. By automating your team’s processes and workflows, you eliminate the need to perform repetitive manual tasks, saving time and improving efficiency. 

Return automation rules follow a Trigger > Condition > Action workflow.

  • Trigger – An event that triggers the activation of the automation rule.
  • Condition – Requirements that must be met in order for the automation rule action to happen.
  • Action – The part of the automation rule that completes a task.

Return automation rules can be set up to automatically perform various actions in your return process, such as refunds, exchanges, approving, and marking as done. 

For example, you can set up an auto-refund rule to automatically issue a refund when an item is returned due to being damaged or defective.

Here are some return automation rules you can set up to help streamline your returns workflow:

  • Auto-Refund – Automatically issue a refund under certain conditions, such as when an item is returned due to being damaged or defective. 

You can configure the rule to be initiated based on triggers such as item validation, RMA approval, shipment in transit, or shipment receipt.

  • Auto-Exchange – Automatically release an exchange order when a certain condition is met. 

For example, you can set up an auto-exchange rule so that when an item is returned and is in transit back to your store/warehouse, the exchange is released and a new draft order is generated in your Shopify account, which you can then fulfill and dispatch to the customer.

  • Auto-Approve – Automatically approve return requests based on criteria that you define. 

You can set up the rule to automatically approve refund requests in the form of store credit, for example, or for customers who have not previously returned an item.

  • Auto-Mark as Done – Automatically mark the RMA (return merchandise authorization) status as Done once all required actions are completed for each item. 

The RMA status will automatically be marked as done only once all the steps of the return have been completed.

By implementing return automation rules, you can simplify and streamline your returns process, making it more efficient and improving the customer experience.

Return Analytics and Insights

Returns analytics and insights are essential components of returns automation systems, providing valuable data that can help optimize the returns process and enhance the overall customer experience. 

With returns automation, you can track and monitor various metrics related to the returns process, including:

  • Return rates – You can track how many returns are being initiated and processed over a given period and identify any spikes or trends.
  • Return reasons – Understanding the reasons behind returns can help you identify common issues with your products or shipping process and make necessary improvements.
  • Processing times – By tracking how long it takes to process returns, you can identify bottlenecks in the returns process and take steps to speed up the process.

By analyzing these metrics, you can gain valuable insights into your returns process and make data-driven decisions to improve efficiency, reduce costs, and enhance the customer experience. 

For example, if you notice a high number of returns for a specific product due to sizing issues, you can take steps to adjust the product description or talk to the manufacturer. 

Similarly, if you identify that processing returns is taking longer than expected, you can streamline the returns process and improve the turnaround time.

Returns analytics and insights are an integral part of returns automation, providing real-time data to help you stay on top of your returns process and make informed decisions. 

By leveraging the power of data analytics, you can optimize your returns process, reduce costs, and provide a better customer experience.

How to Implement Returns Automation

Now that you know what returns automation is and why you should use it, you might be wondering how to implement it for your eCommerce business. 

Here are some steps to help you get started:

1. Review Your Current Return Policy and Process

The first step to implementing returns automation is to evaluate your current return policy and process. Take a look at how the current process is working for both you and your customers and identify any pain points, gaps, or areas for improvement.

Consider the following questions:

  • How easy is it for customers to initiate a return?
  • How long does it take for customers to receive their refund or exchange?
  • How are returns currently being processed?
  • Are there any frequent customer complaints about the returns process?

Answering these questions will help you identify the pain points in your current process and set goals for improvement.

2. Choose an RMS that Suits Your Needs and Budget

Once you have evaluated your current return policy and process, you will need to choose a returns management system (RMS) that suits your needs and budget. 

Take into account the following factors when choosing an RMS:

  • Integrations – Does the system integrate with your eCommerce platform, shipping carrier, and other relevant systems?
  • Customization – Can you customize the return process to fit your brand and return policy?
  • Pricing – How much does the system cost? Are there any additional fees or charges?
  • Support – What kind of support does the system offer? Do they have a knowledge base, customer support chat, or training resources?

Research and compare different return automation systems to find the best fit for your needs.

Chat with our experts to boost your customer return experience and LTV today.

3. Set Up and Test Your Return Automation System

After choosing a return automation system, it’s time to set it up and test it. 

Follow the instructions and guidelines provided by the RMS to ensure a smooth set-up process, and then test the return portal and automation rules thoroughly to ensure that everything is working properly.

Here are some key steps to setting up and testing your return automation system:

  • Integrate – Integrate the system with your eCommerce platform and shipping, helpdesk, and warehouse management integrations.
  • Customize – Customize the return policy, return portal, and customer communications to fit your brand and return conditions.
  • Test – Test the system by initiating a return and following the process through to completion. Check that everything is working correctly and that all data is being recorded accurately.

4. Launch and Promote Your Return Automation System

Once you’ve set up and tested your return automation system, it’s time to launch and promote it. 

Inform your customers about the new system and how it benefits them. Highlight your return policy and return portal on your website, email, social media, and other channels.

Use the following tactics to promote your new return automation system:

  • Return policy page – Add a dedicated return policy page to your website.
  • Email announcement – Send an email to your customers announcing the new return portal and explaining how to use it.
  • Educate – Include information about the returns process in your packaging and order confirmation emails.

5. Monitor and Optimize Your Return Automation System

The final step in implementing returns automation is to monitor and optimize the system. Track and measure the results of automating your returns using return analytics and customer feedback, and make adjustments as needed.

Track return metrics such as:

  • Return rate – How often are customers initiating returns?
  • Return processing time – How long does it take for customers to receive their refund or exchange?
  • Return reasons – Why are customers returning items? Is there a pattern of common return reasons for specific products?
  • Customer satisfaction – What are customers saying about the returns process? Are there any common complaints or issues?

Use returns data to continuously adjust and improve your returns process as needed to offer your customers the best experience and be as efficient as possible.

Case Studies

Here are some real-life examples of how stores have successfully used returns automation to improve their returns process, increase customer satisfaction, and increase their ROI.

One Project

One Project, a global eCommerce fashion platform, faced the challenge of enabling quick and efficient item exchanges for their customers. After evaluating various returns management solutions, they chose ReturnGO for its ability to facilitate easy exchanges, automate processes, and handle complex return policy rules.

Here’s how they used returns automation to streamline their returns management:

  • Customized refund and exchange rules – One Project implemented tailored return rules based on customer profiles, item types, and product categories. This enabled them to prevent returns of custom products, restrict frequent returners, and provide a VIP experience.
  • Automation and integration – By integrating their logistics and ERP systems with ReturnGO, One Project achieved seamless communication and synchronization of data, enabling them to automate a wide range of processes and significantly reduce manual intervention.
  • Efficient handling of edge cases – With automation in place, One Project’s team focused on addressing exceptional situations that required individual attention, such as cases where customers failed to return items. This increased overall efficiency and reduced workload.
  • Data-driven insights – ReturnGO’s comprehensive analytics and reporting provided One Project with valuable insights into key metrics such as refund value, exchange value, and gift card value. They used this data to optimize the refund process and improve business operations.

“The process is fully automated, from the customer request to the refund.”

– Shmulik Konforty, CTO, One Project

ReturnGO’s returns automation and streamlined processes resulted in significant improvements for One Project, including:

  • Enhanced returns management workflow efficiency.
  • Increased customer satisfaction through easy exchanges.
  • Positive impact on the store’s ROI.

By leveraging ReturnGO’s features, One Project successfully transformed their returns process, providing a seamless experience for customers while achieving operational efficiency.

Check out the full One Project case study here.

Travelpro

Travelpro®, a leading luggage manufacturer known for its focus on innovation, faced challenges with a manual return handling process. Customers had to request returns on the website, and the customer service team manually generated return labels, leading to inefficiencies and delays.

Here’s how they used returns automation to streamline their returns management:

  • Automation and integration – By implementing ReturnGO’s returns solution and integrating it with their shipping carrier, Travelpro® eliminated the manual process of generating return labels and reduced return processing time from 20 minutes to just 90 seconds per return.
  • Easy return initiation – Customers can quickly initiate a return by entering their order number and ZIP code in the self-service return portal, which will generate a pre-paid return label, creating a seamless return experience.
  • Efficient refund processing – With ReturnGO, Travelpro® can issue refunds quickly, even during peak seasons, increasing efficiency and reducing backlogs. 

“The return process is completely customer-centric. They fill out the request, generate the label, and get a refund.”

– Mark Costigliola, eCommerce Operations Manager, Travelpro

By automating the returns process, Travelpro® achieved the following:

  • Streamlined returns management and reduced processing times.
  • Increased customer satisfaction by offering easier returns.
  • Improved customer retention through a focus on enhancing the return process.

By automating the returns process with ReturnGO, Travelpro® successfully streamlined their returns management, reduced processing times, and improved the customer experience.

Check out the full Travelpro case study here.

Future of Returns Automation

The future of returns in eCommerce lies in returns automation. As technology continues to advance, returns automation is revolutionizing the way returns and exchanges are handled.

80% of companies are already using or planning to use automation software and tools, a trend that is expected to become pretty much universal in eCommerce in the next few years.

By embracing returns automation, you can stay ahead of the curve, meet evolving customer expectations, and unlock new opportunities for growth in the dynamic eCommerce landscape.

Here are some emerging trends and predictions for returns automation:

Artificial Intelligence

Artificial intelligence (AI) is rapidly transforming the world of returns management, and the trend towards AI-powered solutions is on the rise. With AI, businesses can automate their returns process more intelligently and efficiently, resulting in reduced costs, increased customer satisfaction, and improved operational efficiency.

Returns automation systems like ReturnGO are excellent examples of AI-powered solutions that help businesses reduce return rates, automate returns, and increase customer loyalty. 

By leveraging the power of AI, you can analyze vast amounts of data, provide insights into customer behavior, and offer personalized recommendations and incentives to customers, resulting in a seamless and hassle-free returns process.

The trend towards AI-powered returns management is on the rise, and businesses that adopt these solutions will be well-positioned to reduce costs, improve customer satisfaction, and drive operational efficiency. 

Circular Economy

Among the newest trends in returns management, the circular economy aims to eliminate waste and promote the continuous use of resources.

In the context of eCommerce returns, circular economy means that returned products are not seen as waste, but rather as valuable resources that can be reused, refurbished, or recycled.

Returns automation plays a crucial role in facilitating a circular economy by making the returns process more efficient, cost-effective, and sustainable. 

By automating returns, you can:

  • Streamline return processing – Streamline the processing and handling of returned products to reduce waste and damage.
  • Use sustainable packaging – Integrate sustainable packaging and shipping practices into the returns process to reduce carbon emissions and waste.
  • Create closed-loop supply chains – Build strong partnerships with suppliers and logistics providers to create closed-loop supply chains that prioritize sustainability and circularity.

By embracing circular economy principles in your returns management, you can create a more efficient and resilient supply chain that benefits both your bottom line and the planet.

Omnichannel Returns

Omnichannel returns management is an emerging trend that leverages technology to seamlessly track and manage returns across different channels. As 78% of customers use multiple channels to start and complete a transaction, they expect to be able to return products through any of those channels as well.

Returns automation plays a vital role in enabling an efficient omnichannel returns process. By providing a centralized platform to manage returns across multiple channels, you can enhance customer satisfaction, reduce costs, and improve operational efficiency.

Provide a positive customer experience by providing multiple return methods for returning items purchased online such as return to a physical store or drop-off location, and providing clear and consistent communication throughout the return process.

Omnichannel returns management is one of the key trends of returns automation that you should embrace to stay competitive and meet the evolving needs and preferences of your customers.

Unlock the Power of Returns Automation

Returns automation is not just a solution; it’s a game-changer that can turn your returns process from a headache into a competitive advantage. 

By streamlining your returns, reducing costs, increasing efficiency, and improving the customer experience, returns automation has become an essential tool for eCommerce success.

If you’re ready to take your eCommerce business to the next level, it’s time to make the switch to automated returns management.

ReturnGO specializes in returns automation and offers a comprehensive returns management platform to lower return rates, automate the entire returns process, and increase customer satisfaction. See for yourself how ReturnGO can transform your returns process with automation.

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