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Are You Ready for the Season of Returns?

by CIN7 Team
With eCommerce comes returns, and brands have to be ready to handle reverse logistics.

As Christmas quickly approaches, our hearts turn to the real meaning of the season. Holiday gift returns, to be blunt. Thanks to the growth of eCommerce, consumers send more and more items back every year. And along with the annual spike in sales that happens at this time of year, brands must be ready to handle reverse logistics and exchanges.

A few things to keep in mind about holiday returns

Product return rates have gone up for most retailers, largely due to eCommerce. In fact, depending on the product category, customers send up to 30% of online purchases back to the source, especially among fashion products. For better or worse, the cost of reverse logistics and flexible returns has almost become a given for online channels.

Reasons for returns

Customers tend to bring back items they buy in stores at a much lower rate than online customers. The reasons for this are obvious and related to the nature of eCommerce. Specifically, 20% of consumers will return an item because of damage in shipping. Likewise, a significant percentage receive the wrong item or get something they weren’t expecting. Along with size problems, their reasons come down to the gulf between the customer and the item. In other words, the chance to touch and wear a product in person can’t be replicated online. At the very least, retailers can give customers fewer reasons to return a product by getting the right products to them in the first place.

Managed expectations

Online programs (such as Amazon Wardrobe) allow customers to try before they buy to address that gulf. Under that scheme, customers have a maximum period of time to try on a minimum number of items to return things they don’t want. Short of providing a similar service, retailers still must balance customer expectation against cost. Handling returns and reverse logistics adds to your inventory and logistics costs. On the other hand, a lack of a flexible returns policy can cost you a customer. Thus, free returns shipping, for example, has become a deal-breaker for a lot of shoppers, like it or not. Whatever your policy entails, make sure your customers know it at the checkout.

Now, about that holiday

Naturally, with the boom in sales at Christmas comes the hangover of returns. And for the last few years, returns have steadily climbed. In the US, for example, consumers returned $90 billion worth of holiday gifts after Christmas 2017. Moreover, the number of products sent back on January 3, 2018 hit 1.4 million, an 8 percent increase over the year before. So brace yourself. If you’re anticipating an increase in online sales, be prepared for the returns.

Cin7 and returns

Need a better way to manage returned inventory at the POS and in your warehouse? Contact CIN7 to find out how integrated channels and automated processes can help your multichannel business.