Best Practice Advice for Your Holiday Season Returns

It’s estimated that 28 percent of holiday gifts bought in 2017 were returned at a value of $90 billion, while it takes an average of 7 people to touch each return.

Sadly, recent research also shows that 69% of retailers are not deploying any technology solutions to help them process returns, resulting in nearly half (43%) of returns being caused by incorrect items being shipped out, or items being damaged.

With all this said, there’s clearly far too much time, money and resource being spent on returns (an event that doesn’t bring in any extra revenue) throughout the holiday season and beyond.

To help drive efficiency within your business and returns process, it’s not too late to act on the following best practice advice.

1. Integrate as much of your data and systems as possible

When running an efficient warehouse, it’s vital that all of your business systems integrate with one another. If your current systems allow it, here are some of the most important parts of your business that should be able to communicate with your warehouse and inventory data:

• Accounting: Updating your accounts reports with the movement of goods and return reasons shouldn’t have to be a manual process. Implementing a system that is able to automatically update your accounting will save you vital time, reduce errors and speed up decision making.
• Sales Credits: When managing returns (especially during the peak season rush), your warehouse staff must be able to access data related to both sales credits and inventory. This ensures refunds and exchanges are easily trackable and your customers can always be kept informed.
• POS: If goods are being returned or exchanged in-store, it’s vital that your point of sale system can update both your inventory and accounting in real-time. These updates should be reflected across all of your sales channels.
• CRM: Staff who are processing returns should be able to easily flag “serial returners”. This way, your marketing staff can choose to remove these contacts from any future mailing lists that promote offers and discounts.

2. Get a handle of your data management now

If you’re not already, make sure you’re fully utilizing barcodes and SKUs within your business.

Barcodes turn manual product lookups into an automated process that’s efficient and virtually error-free. For optimal effect, they should be used during checkout, goods-out, goods-in, and during inventory counts or stocktakes. Your staff should also be able to scan barcodes and immediately update your inventory management, accounting and point of sale systems.  

Stock Keeping Units (SKUs) are unique identifiers for each of your products that make keeping careful track of your entire inventory easier. SKUs are vital tools as they allow you to identify products across systems and channels.

For optimal effect, your SKUs should be unique and have the following characteristics:

• Be 32 characters or less
• Avoid starting with zeros
• Avoid using ambiguous characters such as I, L and O
• Use numbers, letters, dashes and dots
• Avoid using slashes and spaces

3. Implement barcode scanning within your warehouse

In order to reduce mispicks and improve your business’ overall efficiency, your warehouse staff should have access to a barcode scanner.

Ideally, this will integrate with your warehouse systems to initiate warnings in the event of any mispicks or mispacks, and update inventory levels and accounts journals when scanning items into the warehouse.

4. Clearly document your goods-in and returns processes

To ensure your staff are effective at bringing goods into your warehouse and processing returns, you’ll need to share clearly documented processes with them.

Include information on:

• Should your staff put away now or later?
• Do you have a quarantine location for returned inventory so that items can be assessed for resale at a later time?
• How are return reasons captured?
• How do you accept returns? (For example, do you offer a returns label in your packages or do customers need to request returns?)
• Do your customers need to use the original packaging or their own?
• Should your customers include the original packing note in their returned package?
• Is there a particular time frame for returning items?
• Who is responsible for the cost of sending items back?

You’ll also need to create a customer-facing returns policy and display this clearly on your website, in-store receipts, packing notes and in emails, while ensuring your customer service staff understand it thoroughly as well.

Alongside careful documentation of your processes, you should also ensure that all staff are trained on them — with top-up training every 6-12 months.

5. ‘Tis the season for proactive customer service

Your holiday shoppers (even those with gifts to return) could become long-term customers, providing they receive the service they expect throughout the holiday season and not just in the run up to the festivities.

If an error or problem has occurred with a customer order or return, it’s recommended that your customer service staff are proactive and call customers to discuss what has happened. They should take this time to apologize, reassure them that they’re doing all they can to help and (if needed) offer the opportunity to change the order or offer a small gesture of goodwill, such as a discount off a future order or a free gift.

Furthermore, you should ensure your software is triggering automatic order confirmation and dispatch emails, whether they’re powered by your ecommerce store, back office management system or related systems integrations. This ensures your customers are always kept informed, negating the need for them to contact you or take to social media to complain.

For further advice on how to automate your customer communications, please refer to our guide: ‘Automating Customer Service for Retailers’.

6. Analyze your returns reports and act on your findings ahead of next season

If you’ve discovered your returns process doesn’t quite keep up-to-speed with the fast-paced holiday season, then once the rush is over, you should analyze your reports and act on those findings ahead of next season.

Here’s what we recommend you start with:

• Variance reports
• Supplier reports and history by supplier
• Empty bin report
• Expense controls
• Time to ship KPI
• Processing cost per order KPI

You should also ensure you’re tracking the common reasons for return. Tracking them conceptually and financially will help with this analysis — try using account codes for different returns reasons for fast reporting and decision making.

It’s also recommended that you regularly monitor your returns and CRM data in order to establish possible cases of “serial returners”. These are the customers that regularly buy from you and return their products, resulting in extra time, effort and money in order to manage them.

A good idea would be to flag these customers within your CRM system, for instance through contact tagging, so that your marketing team know to avoid sending them new offers and discounts.

The advice found in this blog has been adapted from our recent guide ‘Are you ready for the returns tsunami?’.

The guide seeks to assess whether your business is capable of managing an increase in returns, whilst also providing best practice advice to help you get your returns process under control.

Are you ready for the inevitable holiday season returns? Find out now by downloading our free guide and taking the self-assessment within it.