Over the past two years, online shopping has increased at an unprecedented rate. As consumers have become accustomed to making online purchases at least once a week, these (often impromptu) purchases will bring predictable returns. But managing these returns can often become a headache as e-retailers find themselves in the perfect storm of supply chain disruptions, a labor shortage, and an already busy holiday season.
In order to manage their returns, e-retailers will often try to manage their reverse logistics flow using traditional warehouse management software, but this software is not designed to handle returns. To properly manage returns seamlessly from once the process is initiated to determining the appropriate shipping protocols, retailers, 3PLs, manufacturers, and any large facility business need full visibility. So, as the Great Disruption of broken supply chains and labor shortages continue, it is mission-critical for e-retailers to automate their return management systems for improved customer service and visibility across warehouses and shipping locations.
By fully integrating with other supply chain solutions, a single, purpose-built platform gives departments across the supply chain a way to streamline their workflows, manage complexities, and provide more visibility across warehouses and shipping locations. For example, warehouses can effectively process returns and return-to-vendor items, perform repairs and refurbishments, and complete put-aways. This allows e-retailers to strategically utilize their resources to remain profitable amid turbulent supply chain disruptions.
This is achieved by the Returns Management System (RMS) platform breaking the logistics of returns down into three focal points – initiation, processing, and tracking/recovery — to streamline the returns process across the supply chain.
Here is how:
The returns process begins once the buyer initiates the “post-purchase” process by requesting a product return. Using an RMS platform, the buyer provides timely updates on the status of their return – significantly reducing the number of inquiry calls made to the company’s customer service department. As many organizations feel the crunch of not having enough workers to process orders, using automation to keep the buyer updated throughout the post-purchase process can optimize the use of their workforce.
For e-retailers, an RMS provides quality data analytics to explain why the product was returned. This insight allows retailers to predict the costs and time associated with future returns and limit the possibility of fraudulent returns – which make up 5.9% of all returns in 2020.
Processing, tracking, and recovery
Data provided by an RMS assist with determining if the cost of shipping the returned product back to the company’s warehouse is more expensive than the product itself. The retailer may instruct the customer to keep the original item while shipping them a new one using this insight.
Alternatively, if the customer returns the defective product, the RMS solution will determine which warehouse location is the most suited to replace it. This determination is typically based on proximity and inventory fulfillment needs. Suppose repairs are needed on the item before being returned into inventory to be resold. In that case, the RMS platform will manage the item’s inspection and product grading process by enlisting the help of the necessary departments or employees to handle the repairs while the solution tracks the progress.
With the purpose to get returned products quickly placed back in inventory for resale, an RMS solution must first determine which warehouse to have it sent to. Next, the platform will deploy recovery efforts to reduce inventory waste and profit loss. Having an RMS platform helps lessen these returns’ financial and environmental impact by assisting with recycling, repackaging and restocking, returning to the vendor, scrapping, liquidating, or disposing of the product. The platform will execute this final stage of the returns process by integrating itself into the retailer’s existing technology systems.
Integrating an RMS solution that streamlines the returns process allows retailers to relieve headaches that often accompany the return process. A solution to the labor shortage cannot take months to implement. With the right solution in place, an RMS can be up and running smoothly in six weeks or less. And with its ease of operation and reduction in tedious manual work, employees are eager to adopt an effective RMS, which increases efficiency, creates a more positive work culture, and a more fulfilling customer experience.
Gaurav Saran is CEO of ReverseLogix, the only provider of end-to-end, centralized, and fully integrated returns management systems built for retail, e-commerce, manufacturing, and 3PL organizations. Prior to founding ReverseLogix, Saran led enterprise sales for Fortune 500 companies at Microsoft. He has held leadership positions at numerous startup organizations, successfully transforming them from early stages to established growth companies.