Your guide to management of returns

YOUR GUIDE TO MANAGEMENT OF
RETURNS
Find out:
• What return management is?
• Why you should optimize return management?
• Typical mistakes in returns policies
• Tips, cases, facts
and much more...

Effective reverse logistics
must be prioritised on par
with sales and delivery.
Get UPS’ recommendations here...
As the number of returns are on the rise, it is crucial for retailers as well
as online stores to employ an efficient strategy for reverse logistics, as
this may contribute to reducing waste as well as improve earnings and
customer loyalty.
Along with the globally increasing e-commerce market, the number of returns
are increasing every year. This puts pressure on the returns policies and procedures
for retailers, internally as well as externally. Effective handling of returns
internally can reduce unstructered work rutines, waste and long processing
times, while at the same time, externally, attractive and customer-friendly returns
policies are crucial for sales and customer loyalty.
“Returns were previously considered as an extra expence for companies. But
we try to help companies to understand that returns have become a source
of income. A great returns policy helps maintain customer loyalty. If the customer’s
expectations to your returns policy are not met, your webshop is considered
unreliable and nontransparent, and you can end up losing many potential
customers,” says Cherma Odriozola, Nordic Director of UPS.
According to UPS, reverse logistics includes: returns policy
administration, product recall protocols, repairs
processing, product repackaging, parts management,
recycling, product disposition management, maximizing
liquidation values and much more.
5 key recommendations for reverse logistics
Use these 5 key recommendations from UPS, if you want to improve reverse logistics
in your business. If companies fail to consider and improve reverse logistics
continously, they might end up losing customers to competitors and potentially
let returns take up a much larger share of warehousing and shipping costs, than
they should.
1.
2.
3.
4.
Know your returns
Find out what kind of returns your company most often receives and what
happens to the returned item in the returns process.
Place a value on returns:
Discuss how the returned product can be resold in secondary channels,
and also, how an improved logistics process for repairs can boost your
customer satisfaction levels. Calculate how much one loyal customer is
worth to your business and consider recycling and final disposition issues.
Assess your infrastructure:
Consider what strengths and weaknesses might exist in your returns process
from incoming returns to updating the warehouse, reshipping and
required staff for handling returns. Focus on taking advantage of every
opportunity to get more revenue from all returned products.
Identify success:
Depending on which value you can attribute to returns, set a goal that helps
you recognize success. This may lead to increased revenue that you can measure,
or a success criteria may be protecting revenue from potential risks.
Although reverse logistics is a huge area,
it rarely receives much attention.
Chema Odriozola
Nordic Director, UPS
5.
Commit to success:
Whether you have in- or outsourced your returns management, reverse logistics
is an ongoing process that requires attention. Reverse logistics may
seem costly at first, however the long-term financial benefits derived from
a comprehensive reverse logistics plan cannot be overlooked.

81%
...of consumers expect at least one of the following
return options when purchasing goods online:
• Being able to return goods purchased online in a
physical store.
• Being able to return an online purchase to the
webshop with a return label provided and paid
for by the webshop.
Source: UPS research

7
common
shortfalls
in reverse logistics
In the study ”The Great Returns Race”, return experts of ReBound examine
144 of the United Kingdom’s leading fashion brands in order to find out what
the typical shortfalls in returns policies are.
54% of online shoppers consider
returning goods even before
they have bought it!
Kilde: eDelivery
ReBOUND elaborates the main findings of the study and explains why some of the
leading fashion brands do not manage to lead a good returns policy. The causes
are listed according to which areas demand most attention:
1.
2.
3.
Free Returns
There are arguments on both sides of offering free returns or not, as businesses
pay the potentially expensive return shipping. On the other hand,
free returns are very attractive for the customer. Companies have to analyse
whether free returns bring more or less value to their business than if
the customer pays the return shipping.
Not enough return options
Eventhough many retailers offer several return options for domestic customers,
there is a significant shortage of choice offered to international customers,
with only 23% of brands offering a choice of three or more ways to
return.
Customised for Each Country
44% of fashion brands to not adapt their returns policies to customers outside
of the United Kingdom. Often, there is a need to adapt adress fields
and contact details in connection with cross border returns.
4. Timescale
28% of fashion brands played it safe by offering the compulsory 14 day return
period. Three brands, however, stood out from the crowd with generous propositions
of 365 days.
5.
6.
7.
67% of online shoppers check
the returns policy of a webshop
before placing an order.
Kilde: Universe of Delivery
Lack of Promotion of Returns Policy
Across the board, there are missed opportunities to promote the returns
policy towards customers. No less than 18% of brands do not promote
their returns policy at all, neither on product pages, in the basket or at
check out.
Refund Promise
The dream refund promise would be instant refunds, but far from all
brands are able to honour this. 11% of brands do not even mention the
procedure for refunds in their returns policy. 22% advertise an uninspiring
refund promise of 14 days plus.
Ease of Navigation
This is the metric which overall needs less attention, as most brands have a
decent route to their international returns policy from their homepage consistently
across mobile, desktop and tablet devices. The average number of
moves is 3, but 10 brands did stand out with 5-6 moves.
Kilde: Universe of Delivery

£60 mia.
... this is how much returns cost to
British retailers each year.
Of this £20 mia. are online purchases.
Source: Universe of Delivery

This is how a Norwegian webshop
turned return management into a
competitive advantage
Friluftsmagasinet.no increases customer satisfaction by offering customers
the return options they demand, while at the same time simplifying
the internal handling of returns for employees.
By digitalising their return management, one of Norway’s largest webshops,
Friluftsmagasinet, are able to provide their customers with the most attractive
options for returns.
Kilde: Universe of Delivery
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“Our customers have the possiblities of returning their online purchase in one
of our physical stores or print their e-mail or pdf generated return label, and
send the parcel back to us free of charge. We use cloud-based software, that
enables us to minimize the inconveinence of returning parcels for our customers
as well as streamlining return management internally, ” Jonas Larsen,
E-commerce Manager at Friluftsmagasinet says.
Jonas Larsen
E-commerce Manager
Friluftsmanasinet
Digitalising return management was a natural part of improving the over-all
customer experience at Friluftsmagasinet, which also included competitive prices
and the right mix of delivery options. The digitalisation of return management
has thereby strengthened the Norwegian online shop’s competitiveness,
and it has shown to be a great internal tool at the same time.
“Now when we receive returns at the warehouse, we register the returns with a
few clicks and use the invoice number to identify the order. This way the stock
is updated right away and the employees use a minimum of working time. Also
our customer service has experienced a lot fewer calls regarding how to track
and return their parcel,” Jonas Larsen concludes.