How E-Tailers Can Reduce Return Rates for Large Items

Tags: Retail, Last Mile Delivery, Retail Logistics

Jonathan Hightower, Logistics Sales Consultant, A-1 Freeman/CRST Specialized Transportation Inc. (STI), 972-514-2567

Merchandise returns are a drain on profits in any industry, but especially for large-format items such as furniture or appliances. E-tailers face additional challenges when dealing with returns compared to local retail outlets, both due to higher transportation costs and the lack of the face-to-face and hands-on experience for the customer.

The decision to return a large purchase is often driven by emotion as frustration or stress may cause the return. By creating an effective and non-stressful delivery experience, an e-tailer can remove the emotional groundwork that drives some returns. Reducing returns by 1 percent on every 100 sales can make a substantial margin difference.

Here are four ways e-tailers can do this:

Create Expectations

When your customer places the order – or before – be sure to communicate:

  • Expected transit time
  • Delivery window scheduling process
  • Scope of work provided by your home delivery partner

Unrealistic expectations create disappointment.

Provide Visibility

At order placement, send your customers a link so that they can monitor shipment movement and progress online. It’s a superior option when compared to having to make a phone call, wait on hold, and then wait for a customer service representative to pull their order and communicate its status. Take another step, and consider proactive status updates, as it is rare a customer would complain about too much information:

  • Your order is being customized, with an expected completion date of X.
  • Your order has shipped, with an expected transit time of X days.
  • Your order has arrived at the local terminal, and you can expect a phone call.
  • Your driver is on his way and will arrive in one hour.

High-detail updates can also minimize the amount of time a customer spends off work and waiting at home for their shipment.

Execute Quickly

It’s well documented that making purchases can release endorphins in your brain. The longer the gap between order placement and receipt of the items ordered, the more opportunity there is for that positive feeling to wear off and be replaced by buyer’s remorse. Some companies forward-stock inventory around the country to minimize transit time.

Make a Great Delivery Experience

The only time an e-tailer’s customer physically interacts with the e-tailer is at their own home. A positive experience makes the e-tailer look great, while a negative experience reflects on the company as well as on the purchased item.

  • Does the delivering company’s representative call promptly to schedule delivery once they receive the product? Do they measure this metric?
  • Does the delivering team greet customers with a smile and a positive attitude?
  • If assembly is required, does the crew have the assembly instructions and act like experienced professionals?

With over three million square miles to cover in the continental United States, no carrier will perform perfectly. Does the carrier have a quality improvement program in place? Are their local delivery representatives audited for compliance?

Here are two more ways returns costs can be reduced:

Document at Delivery

At the time of delivery, make sure your delivery partner photographs the condition of the item as well as its placement. This protects you and the transportation company against fraudulent claims, which could be created by the customer moving an item themselves and damaging it or their home.

Design Reverse Channel for Re-Use

Factory-spec packaging materials are often not available to re-pack a return. A carrier with residential pad-wrap capabilities, the ability to re-pack items later, or ship them pad-wrapped can reduce the number of outright losses from returns, reducing an e-tailer’s landfill footprint slightly.

By upgrading and monitoring efforts in the areas referenced above, internet-based retail companies can reduce return rates, thus increasing profits and creating happier customers.






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