For retailers selling into international markets, a major component of offering a great customer experience is ‘reverse logistics’ or returns. Returns are an inevitable part of the shopper journey and a good returns policy is often a key factor in shoppers choosing to purchase from a particular international retailer. According to Narvar’s ‘The State of Returns’ report, 62% of shoppers would ‘buy again’ from a brand that offers free returns or exchanges and 69% wouldn’t buy from an online retailer if they must pay for return shipping.
In the US, return deliveries were estimated to cost $550 billion in 2020 – which is a 75.2% increase over 2016. To implement a reverse logistics process that is as efficient and cost-effective for the retailer as possible requires a well-thought-out strategy that encompasses many areas.
Here are 6 to consider:
1. Returns management
The return of goods involves multiple processes – from the customer returning the merchandise either directly to the retailer’s warehouse or a returns center (if consolidating returns in other or multiple markets), inspection, verification and destruction services, refunds, airfreight or shipping to the country of export, customs processing, and final mile delivery to the retailer.
The overarching key to customer satisfaction with returns is an easy to follow process with no conflict in information from different sources. According to Meghan Rhindress, Senior Manager, Global Sourcing, ESW,
It’s best to have a really clear process and shopper experience. Shoppers can very easily go through the returns process and find there are different instructions on labels in the box versus the website, which causes confusion. Make it a really seamless, easy procedure to return, so if they do return, they won’t mind purchasing again because the process is simple.
2. Inventory management
Having stock in transit between delivery and return, and not available to resell, affects inventory availability and can have a knock-on effect on sales. Careful inventory management and real-time monitoring of the returns pipeline can help to ensure stock isn’t held for too long in returns centers making it unavailable for reselling. This is particularly pertinent for seasonal or limited-edition stock.
3. Returns Centers
In-country, or regional, returns centers can provide a range of return processing services, including opening and validating the return, inspection of the goods, destruction of certain items and more. Goods can be consolidated and shipped back to the retailer on a schedule that supports their inventory needs. Having a local returns center can reduce costs and improve customer experience in several ways.
Firstly, the returns center can facilitate receiving the returns and therefore expedite processing refunds, resulting in the customer receiving their refund more quickly and having a better experience. Using a local returns center means shoppers don’t have to ship their return internationally, which could result in weeks of waiting for a refund – clearly an inferior shopper experience that leads to frustration and lower likelihood of a repeat customer.
Additionally, a returns center can consolidate returns and ship them at a cadence that is most efficient for the retailer – that could be weekly if there are enough packages, but for a smaller amount of returns, monthly might be more appropriate. This will save the retailer money by bulk-shipping rather than shipping smaller amounts more frequently.
In a survey, Intermec found that 52% of returns center managers don’t know – due to a lack of ability or resources – whether returned items should be sent to the retailer, discarded or held as inventory, so a clear process for returns center staff to follow is essential.
ESW has 50 returns centers around the world and all returns center managers are fully trained in the correct returns process for each retailer, ensuring swift processing of returns, excellent customer experience for the shopper, and peace of mind for the retailer.
4. Merchandise and financial reconciliation
Merchandise and financial reconciliation are how the retailer knows that returns have been processed properly. A returns center should send a manifest with all returns detailed, to allow manual checking of the merchandise returned, and enable financial reconciliation for the inventory and related refunds.
5. Customs Clearance
While consolidated shipments of returns are subject to duties and taxes when being returned to the country of export, the retailer, in conjunction with the carrier broker who handles imports for the retailer, can apply for these duties and taxes to be returned through the Returned Goods Relief scheme. It is important to work with the carrier broker who imported the goods and will, therefore, have all the necessary paperwork as the Importer of Record and Exporter of Record information must match.
Duty drawback, where duty is paid on import to the country of the shopper, can in some markets be reclaimed when the product is returned. This enables a full refund to be offered to the shopper, including all import charges that were paid on their order.
6. Customer service
Customer service is important throughout the whole shopper journey and it is no different with reverse logistics. Being able to track returns for customers, facilitating speedy refunds and managing queries in a timely fashion are all an important part of the shopper experience and an excellent provision of each will lead to returning customers and increased revenue.
Returns are a fundamental part of the logistics process and managing the many parts inherent in the process well is crucial in delivering an excellent customer experience to shoppers. A seamless returns process is necessary to the successful operation of an ecommerce business – for both the shopper and the retailer – and implementing a great returns process is essential to success – both domestically and internationally.
To find out more about how ESW can help your international business speak to one of our team here.