Tips for Improving Return Processes

Last year I had a call with the VP of ecommerce of a $300M+ retail company who was convinced their 32% return rate was "just the cost of doing business" When I dug into their data I discovered that almost half of post-purchase revenue loss is preventable. This happens all the time, retailers are pouring their heart and budget into hitting sales targets, only to watch a third of that revenue disappear due to inefficiencies and refunds. It's demoralizing to be a retailer these days. It doesn't have to be this way! Here's the playbook we used to help that company recover over $6.8M in just 4 months: Most retailers focus on the wrong metrics, for example they celebrate $10M in sales while silently losing $3.2M to returns, and another $1M to operational inefficiency, plus $800K to return fraud and abuse. Quick observations: Your "best customers" are killing you! 37% of "VIP shoppers" are serial returners, they look great in your CRM but they're negative margin customers. We found one customer returning over $14K → this is totally preventable! This is our framework that we developed after working with hundreds of enterprise retailers in the past 5 years: Prevent returns Enable size/style swaps and allow for uneven exchanges (more expensive or cheaper options) Store credit options instead of refund Relevant product recommendations for exchange and upsell Analyze the return reasons by product - this can save you a lot of products from being returned! Results: Over 60% reduction in refunds b) Prevent fraud and abuse Fraud rules to prevent return abuse Automate policy enforcement and verification of product quality before the product is sent back Product inspection workflows at the warehouse level Results: the highest we seen last year for a customer was over 90% c) Streamline Operations Setup rules for returns routing to the closest warehouse or outlet stores Minimize clicks and enable a scan, scan, refund workflow Centralize all returns data and actions into one system, to prevent system switching Results: 42% faster processing Returns are not a cost of doing business. They're a goldmine of hidden opportunities. But here's the truth: Most retailers will read this and do nothing. They'll keep losing millions because "that's just ecommerce." The smart ones will see this as the competitive advantage it is. What side do you want to be on? P.S. If you're a retail executive seeing 20%+ return rates, DM me. I'll share our full framework as it’s way more detailed.

Your most returned product can teach you the most. Every return tells you something. But a lot of the time, we don’t pay attention. Here’s what to do: Step 1: Find the product with the highest return rate. Step 2: Read through the reasons people give for returning it. Step 3: Make simple content that helps stop those problems before they happen. Some examples: • If people say it’s “too small” → Add a size guide video on the product page and send it again after they buy. • If they say “doesn’t match the photo” → Show real photos from real customers, in natural lighting. • If they say “didn’t know how to use it” → Send a quick how to guide when the product ships. You probably don’t need to change the product itself. You just need to set better expectations.

Most brands don't have a good returns process. The right technology makes it seamless. I have been in countless warehouses where the returned items are received at the furthest dock. Then put in the back of the building...in a pile...sorted through and processed over several days. Even to my surprise we did a project in the past where the customer said, “I don’t want the returns near the front of the building. It’s dirty and a mess.” (that statement started my mission to improve returns within the warehouse) Now with a combination of robotics and the right software, returns can be handled efficiently. It can become an asset to the fulfillment operation and the brand. 💰I did a study for an apparel brand which identified they could reduce inventory on hand by 10% resulting in a $5MM savings. They averaged 48 hours for processing returns. A shelf to person system like the one shown in the video incorporates all parts of the fulfillment operation. Inbound items are processed then put directly into the pickable location. The item is not touched again until an order is placed for it. The right software can work wonders. If a returned package enters the building that is currently out of stock or low on stock, it is given a high priority and routed by system directly to processing. A worker validates and processes the return then puts it into the pickable location. This puts the product back up on the storefront quickly for re-ordering. In stock items mean more sales for the brand and happier customers. Build a fulfillment system that works for every part of the operation, not just a happy path. Leave a comment or repost if you found this useful! ♻️ Q: Have you ever scrambled to find a product in a pile of returns?