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6 ways to improve your reverse logistics
An efficient item returns process can help improve customer loyalty. Learn how to improve your reverse logistics strategy and foster long-term customer satisfaction.
Returning items is a critical customer journey touchpoint, and customers will grow frustrated with a company if the organization's returns policy is poorly executed. Learning how to improve reverse logistics can help companies retain loyal customers.
The process of a customer returning an unwanted item to a company is called reverse logistics. It includes the multiple steps involved with product returns, from a customer sending a product back to workers processing the returned item and deciding whether to restock or recycle the item. Although reverse logistics costs are unavoidable, several strategies can help expedite the process.
Here are six strategies to enact to make the item returns process go as smoothly as possible.
1. Publish the company returns policy
Letting customers know how they can return products as well as any restrictions for that process is critical. Companies must define their returns policy and make it easily available for customers to find. Returns policies are usually available on a company's website or in any stores that sell the company's products.
Information to add to a returns policy includes the following:
- Any items that customers cannot return.
- Whether specific reasons are required for returning products.
- The time frame during which customers are allowed to return items.
- The method by which a customer is allowed to send an item back to the company. For example, customers might be required to return an item in its original packaging.
- Whether the organization will replace items, issue refunds, provide gift cards or otherwise reimburse the customer.
Manufacturers can also include returns policies for specific items in the item packaging.
2. Simplify the beginning of the returns process
Companies should streamline the reverse logistics process as much as possible for customers. If customers return items in person, then properly trained staff should handle the requests.
If the company sells its products directly to the consumer or other online channels, an online automated returns process could be helpful. Some options for this include the following:
- Adding a chatbot to the website to walk the customer through returns options.
- Enabling customers to arrange their return through their website account.
- Incorporating email or text notifications to keep customers informed about their return.
3. Provide a return label and the right packaging
If a company sells products online, customers will need a return label to send an item back. Companies can include a return label with the product or offer customers the option to print return labels. Customers might also appreciate receiving a prepaid return label, so they don't have to pay additional fees.
In many cases, customers can return items using the original boxes, but sensitive or unusual products might need special packaging. Companies should send customers the right packaging for their return in a timely manner.
If accepting returns for certain products is too expensive, organizations can simply offer a refund without requiring customers to go through the reverse logistics process.
4. Simplify the returns drop-off process
Customers will likely feel frustrated if they must wait in line at a store location to hand off an unwanted product or find a drop-off location to mail their item.
Enabling item pickup directly from the customer's home or business can improve customer service because it will simplify the returns process for customers.
5. Provide returns tracking
Customers often want as much information as possible about the status of their returned products. Companies should provide a tracking system so the customer can follow their item's progress. Once the item has arrived at a warehouse, the system can update the customer about the timing on their refund or replacement.
Assigning a return merchandise authorization number during this step in the process might be helpful.
6. Analyze root causes of returns
Companies should minimize returns as much as possible, and analyzing why customers are returning specific items can help identify key trends, which can lead to solving those issues.
Some steps to take during this analysis include the following:
- Gather reasons for returns directly from customers.
- Identify the most common return categories, such as faulty products or late deliveries.
- Track carrier and delivery metrics, such as delivery time and the percent of packages delivered on time.
- Segment customers into those most likely to return items.
This data can facilitate analysis for the reasons behind returns. For example, if a high amount of faulty items were recently returned, the company might need to look into potential manufacturing defects for a particular batch of products.
Once analysis has revealed more about the causes of returns, leaders can attempt to address the issues causing returns. For example, if faulty manufacturing caused defects, the manufacturer could implement better quality control methods.
Paul Maplesden creates comprehensive guides on business, finance and technology topics, with expertise in supply chain and SaaS platforms.
