No one likes returns — not consumers, not manufacturers, and certainly not eCommerce companies. “Returns are ugly. No one wants to go to Target or Walmart and stand in the returns line,” says Red Stag Fulfillment Chief Operating Officer Dave Carroll. But eCommerce returns are unavoidable. And the way you manage your returns process can impact customer satisfaction and your eCommerce fulfillment costs. Carroll spoke with us about how Red Stag Fulfillment helps clients develop and implement returns processes that work.
How can eCommerce companies handle returns?
Like every aspect of logistics, there are as many ways to process returns as there are eCommerce companies. However, there are three primary routes for reverse logistics.
In-house returns
Some online sellers have returns shipped back to the company, even if they use a 3PL for order handling. This method gives the eCommerce company primary control over the returns process. You can examine each item as it comes in to assess its condition yourself and issue refunds directly.
However, there are downsides to this approach. The returns process is manual and labor-intensive. Carroll noted that warehouses dedicated to reverse logistics are chaotic because the products coming in are unpredictable and hard to sort and store. “It’s a total hassle to deal with returns,” he says, “If you have any kind of scale, dealing with returns is impossible to do on your own.”
Return to manufacturer
Another option is to send returns directly to the factory or manufacturer. If the customer returned the product because of a manufacturing defect, you might need to send it there eventually, so this saves you a step. Returning to the manufacturer is also a preferred option for dropshipping eCommerce sellers.
However, not all returns need to go back to the factory. If a customer changes their mind about a purchase for cosmetic or other reasons and it comes back in excellent condition, you can resell it. Some brands have turned their returns into a profit center, selling less-than-perfect items at a discount. If you ship returns to the manufacturer first, you add a step, delay the return of the article to inventory, and incur additional shipping charges.
Also, if you source your products from multiple manufacturers, returning to the factory can complicate your returns process. Best practices for returns policies include simplicity and clarity. In this case, you risk creating a procedure that might force a client to return items from a single order to different addresses.
3PL returns process
If you’ve outsourced your order fulfillment to a third-party logistics company, having that company handle returns is an excellent choice. Your 3PL is already connected to your eCommerce platforms and inventory management. It can help you turn refunds around quickly and assess the condition of returned items. The fulfillment warehouse is already set up to store your merchandise, so it’s easy to add products that you can resell back into inventory.
“We shipped it out, so when it comes back, we have a good idea of whether it’s in a salable condition or what’s wrong with it,” Carroll says.
The 3PL returns process doesn’t give you eyes on your returned merchandise, and you might still need to ship defective items to the manufacturer to get credit. However, Red Stag Fulfillment has developed operating procedures to give you visibility into your products throughout their journey, including forward and reverse logistics.
“Your life is tied up in these products,” Carroll says. “Ensuring our clients have visibility into the returns process allows them to keep track of the dollars they invested in this inventory.”
What if your 3PL doesn’t handle returns?
Not every 3PL offers reverse logistics services. If you outsource your fulfillment to a warehouse that won’t take returns, you can process returns in-house or send them to the manufacturer. However, Carroll notes, “If you outsourced your fulfillment, you probably don’t want to handle returns.” Taking fulfillment off your to-do list frees up your time to focus on managing your business, and an in-house returns process diminishes that benefit.
There is one other option: Carroll notes that there are probably fulfillment centers that handle nothing but reverse logistics. You could contract with one of those, separating your outbound and return operations. However, the optimal choice is to find a fulfillment partner to handle the entire fulfillment cycle, including returns.
Steps in a typical 3PL returns process
Again, returns handling has endless permutations, but the 3PL returns process breaks down into three basic steps.
Return authorization
Return authorization generally starts on your website. You can give your customers a portal to manage returns and print return labels. That has the benefit of giving you advance notice of returns so that you can alert your fulfillment warehouse. Some eCommerce companies include a return shipping label with the order. Still, a best practice is to require authorization to ensure that the product is within the return window and eligible for return and refund.
Inspect for resale
Your 3PL will inspect each returned item. You can provide a checklist for this inspection to ensure that any products returned to inventory are in perfect condition. For example, one of Red Stag Fulfillment’s clients developed a 15-point inspection process to check the functions of a motorized product. As part of the process, Red Stag can take photos of returns, so you can help decide the next step for an item.
“Talk to your 3PL beforehand and come up with a really good plan to ensure the returned items are handled the way you want,” Carroll says. “As a seller, you might not know what to do, and we can help guide that.”
Product disposition
Disposition is what happens to the returned product. In the best-case scenario, it comes back in new, unopened condition. In that case, at Red Stag Fulfillment’s warehouses, the product would get added back into stock, placed on the shelf, and marked as available to pick.
Sometimes, merchandise needs to be sent back to the manufacturer because of product defects. You might want some items returned to you. And you decide how to handle stock that isn’t suitable for resale.
“Returns disposition is customized based on the client’s requirements,” Carroll says. “We handle it in any way that they ask us to.”
And he has advice to make the process easier: “For each of your products, have a disposition in mind. Know what the most common reason for a return is, then have a process you can give to your 3PL to handle that return.”
What makes Red Stag Fulfillment’s returns process different?
What makes the Red Stag Fulfillment returns process different is what makes all our fulfillment services stand out. Our relentless focus on quality means you can have a “set it and forget about it” approach by partnering with us using our eCommerce fulfillment service.
“We handle the returns just like the client is handling the returns,” Carroll says. “The biggest thing, from a client perspective, is that returns are seamless.” Here are some of the steps we take to ensure that you don’t have to worry about returns.
Inventory visibility
“You have a full view of all of the inventory that you have, the condition that it’s in, and where it’s located,” Carroll says. RSF’s client portal lets you follow each product through its lifecycle, including returns.
Kitting and unkitting
One of Red Stag Fulfillment’s signature services is kitting. When kitted items get returned, Carroll notes, the warehouse can put them back in stock as a kit or unkit and return products to their original SKUs. That flexibility can help you minimize losses, particularly if some products in the kit are returned in excellent condition.
Continuous communication
“There’s constant very personalized communication between the seller and us during the returns process,” Carroll says. You can send a message directly to people in specific departments such as LTL, outbound, or kitting. Our mission is to give you the answers you need quickly.
Customized returns processing
“We want to make each company feel like they’re our only client,” Carroll says. In the returns process, that means we work with each client to ensure that we’re handling reverse logistics in a way that serves their business.
A commitment to customer service
At Red Stag Fulfillment, helping eCommerce companies grow and scale is the heart of our business model.
“We’re on this never-ending journey to make sure that we’re serving the needs of our clients,” Carroll says. “We do the heavy lifting of the 3PL process so our clients can focus on their business.”
What are your reverse logistics pain points?
Of course, the best way to reduce the cost of returns to your business is by reducing the number of returns. Red Stag Fulfillment helps our clients do that through accurate fulfillment and superior pick and pack fulfillment services. When customers get the right order, delivered to the correct address, in a well-packed box, you reduce returns caused by mis-picks and damage during shipping.
You can turn your reverse logistics pain points into problems solved with Red Stag Fulfillment’s customized order fulfillment services. We’d love to help you figure it out.
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