Best Practices for Handling Customer Returns

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.

‼️Returns Are A Growing Problem -Returns now cost U.S. retailers over $743B annually, 14.5% of total retail sales -And customer expectations haven’t budged 🔊How retailers are responding: -REI is banning members who abuse its policy (returning 70%+ of purchases) -Amazon and Target are flagging serial returners, quietly denying or delaying refunds -Restocking fees and return policy changes are becoming more common Most returns don’t start at the register. They start earlier. When a product doesn’t fit, the details aren’t clear, or no one is available to help. Tightening return policies = short-term protection, long-term risk. -79% of customers say a difficult return experience makes them think twice about buying again -13.7% of returns are now flagged as fraudulent, but many more are preventable with better execution upstream, beginning with the fit! A smarter strategy looks like this: ➡️Make the purchase more accurate -Improve fit, size, and product detail clarity, online and in-store -Train associates to guide the purchase, not just ring it -Help customers understand what a product is, and isn’t ➡️Empower associates to prevent returns -Share return data with store teams, so they know what’s coming back and why -Improve Return codes to aid discovery of issues upstream  -Coach for “save-the-sale” behavior, offering better fit, alternatives, or added guidance during the purchase 👉Stores that invest in proactive service and guided selling tools have seen 12–18% fewer returns in high-risk categories like apparel and footwear 👉According to Salesforce, 52% of customers say they’ll stay loyal to a brand if their problem is solved clearly and quickly, often before it becomes a return -Recognize the right behaviors: not just speed, but the ability to guide a customer toward the right purchase 👉This might mean calling out an associate who saved a sale by solving a fit issue 👉Or rewarding someone who reduced returns by consistently educating customers, not just completing transactions ➡️Use returns as insight, not just loss -Identify patterns in what’s coming back and why -Loop return insights into merchandising, marketing, and product development -Separate regret-driven returns from those caused by product confusion, poor fit, or lack of support 🎯The goal isn’t zero returns. It’s fewer avoidable returns, and a customer experience that builds trust, not friction. Have you seen this done well? What are some return strategies that protect margin and build loyalty? I’d love to hear what’s working in your world. Kevin Finnegan kfinnegan@grnlowcountry.com kevin@finneganadvisory.com

**How to Manage Reverse Logistics Effectively** Handling reverse logistics well can save costs and keep customers happy. Here are some simple strategies to master it: 1. **Set Clear Policies**: Make sure your return, exchange, and repair policies are easy to understand. For example, offer a 30-day return window with a clear process for returning items. This reduces confusion and improves customer satisfaction. 2. **Streamline Operations**: Simplify the steps to process returns. For instance, have a dedicated team to quickly inspect and categorize returned items. This speeds up the process and reduces costs. 3. **Track Returns**: Use tracking systems to monitor the status of returned items. Like how online orders have tracking numbers, returns should too. This helps in managing inventory and improves service. 4. **Analyze Return Data**: Look at why items are returned. If a lot of customers return the same product, it might have a quality issue. Fixing this can reduce future returns and improve your products. 5. **Work with Partners**: Coordinate with suppliers and logistics partners to handle returns smoothly. For example, collaborate with a logistics company that specializes in returns to streamline the process. 6. **Communicate with Customers**: Clearly inform customers about how to return items. Send easy-to-follow instructions with their orders. This makes the return process hassle-free and keeps customers happy. 7. **Improve Continuously**: Regularly review your return processes. For instance, if you notice delays in processing returns, find ways to speed it up. Continuous improvement helps in cutting costs and enhancing efficiency. By following these steps, businesses can manage reverse logistics effectively, leading to cost savings and happier customers. #ReverseLogistics #SupplyChain #CustomerSatisfaction #LogisticsManagement #freightbroker #logistics

Balancing Profitability and Customer Satisfaction This is much easier said than done.  But, one way to get started is by handling your returns the RIGHT way.  These are 5 lessons I've learned from the returns process: Lesson 1: Customer Support and Communication Lesson: Proactive and excellent customer support can deter returns. Example: A customer expressed dissatisfaction with a product. Instead of processing an immediate return, our support team engaged the customer, offered solutions, and turned a potential return into a positive interaction. Lesson 2: Accurate Product Descriptions Lesson: Clear, detailed product descriptions reduce return rates. Example: By focusing on high-quality images, videos, and in-depth descriptions, we reduced our return rates by 15% within three months. Lesson 3: Incentives for Retention Lesson: Offering incentives can deter returns and promote customer loyalty. Example: We offered a dissatisfied customer a discount on their next purchase instead of processing a return. The customer agreed and has since become a regular shopper. Lesson 4: Cost-Effective Return Decisions Lesson: Sometimes, it's more cost-effective for customers to retain a product rather than return it. Example: Considering the high shipping costs, we offered a customer a partial refund to keep a low-value item. This saved us a loss, and the customer appreciated the gesture. Lesson 5: Analyze and Improve Lesson: Regular analysis of returns can provide insights for improvement. Example: We discovered a recurring issue with a product after seeing a pattern in the return reasons. We quickly rectified the problem, reducing future returns of that product. What strategies have you found effective in handling returns while balancing profitability and customer satisfaction?

𝗥𝗲𝘁𝘂𝗿𝗻 𝗿𝗮𝘁𝗲𝘀 𝗰𝗮𝗻 𝘀𝗶𝗻𝗸 𝘆𝗼𝘂𝗿 𝗽𝗿𝗼𝗳𝗶𝘁𝘀! Here's how to lower them AND keep customers happy. 👇 #𝟭 : 𝗦𝘁𝗮𝗿𝘁 𝗯𝘆 𝗔𝗻𝗮𝗹𝘆𝘇𝗶𝗻𝗴 𝗡𝗲𝗴𝗮𝘁𝗶𝘃𝗲 𝗥𝗲𝘃𝗶𝗲𝘄𝘀 The best insights come from your own reviews. Look for common reasons customers are returning products and address these issues. If customers mention misleading sizing, inaccurate colors, or poor-quality materials, make sure to update your product descriptions, images, and details accordingly. Many 1-Star reviews can be avoided simply by updating your display page. #𝟮 : 𝗜𝗺𝗽𝗿𝗼𝘃𝗲 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 𝗗𝗲𝘀𝗰𝗿𝗶𝗽𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗜𝗺𝗮𝗴𝗲𝗿𝘆 Clear and detailed product descriptions and images help set accurate expectations. Includes dimensions, material details, usage instructions. etc. to ensure customers know exactly what they're buying. Content accuracy reduces returns due to unmet expectations. #𝟯 : 𝗣𝗿𝗼𝘃𝗶𝗱𝗲 𝗨𝘀𝗲 𝗮𝗻𝗱 𝗖𝗮𝗿𝗲 𝗜𝗻𝘀𝘁𝗿𝘂𝗰𝘁𝗶𝗼𝗻𝘀 Often, products are returned because customers aren't sure how to use or care for them. Includes easy-to-follow instructions for setup, usage, and maintenance in the product listing or as a product insert. This not only reduces returns but also increases customer satisfaction. #𝟰 : 𝗘𝗻𝘀𝘂𝗿𝗲 𝗣𝗮𝗰𝗸𝗮𝗴𝗶𝗻𝗴 𝗣𝗿𝗼𝘁𝗲𝗰𝘁𝘀 𝘁𝗵𝗲 𝗣𝗿𝗼𝗱𝘂𝗰𝘁 Damaged items are a major cause of returns. Make sure your product packaging is sturdy enough to withstand Amazon's fulfillment process. Packaging should protect fragile items and prevent any shipping-related damage. Investing in durable, tamper-proof packaging can prevent these avoidable returns. #𝟱 : 𝗢𝗳𝗳𝗲𝗿 𝗥𝗲𝘀𝗽𝗼𝗻𝘀𝗶𝘃𝗲 𝗖𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗦𝘂𝗽𝗽𝗼𝗿𝘁 When customers encounter a minor issue, good customer service can prevent them from initiating a return. Respond promptly to questions, provide troubleshooting help, and offer solutions like partial refunds or replacements when appropriate. Effective customer support can turn potential returns into positive experiences. 𝗞𝗲𝘆 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆: Reducing your return rate is about setting accurate expectations and being proactive. Don't wait for them to come. Tackle them ahead of time. _ Find this useful? ♻️ If so, repost it to your network and follow Ian Rollin Berry for more.