The holiday season is a busy time for retailers, with more people out shopping and buying gifts. This increase in sales can also increase returns, as people receive items they don't want or need. While some returns are simply a matter of customers changing their minds, others are due to damaged or defective merchandise.
Regardless of the reason for the return, retailers need to be prepared to handle the influx of returns that come during the holiday season. Are you ready to learn about tips for the peak season? But first, let's look at the challenges of the return during the holiday season.
What Are Returns Challenges During the Holiday Season?
The holiday season is a time when retailers face various challenges concerning returns. These challenges come in the form of the following;
1. Damaged Goods
Due to the increased volume of orders, some items may be damaged during shipping or handling. This can be a problem for retailers, as they may need to issue refunds or replacements. Damaged goods can lead to customer dissatisfaction.
2. Fraudulent Returns
Due to the increased volume of returns, some people may attempt to return items they did not purchase or are not eligible for return. Fraudulent returns can be costly for retailers, as they may need to issue refunds for fraudulent returns. Additionally, fraudulent returns can damage customer trust and loyalty.
3. Limited Time Frame
The holiday season is a busy time for everyone, making it challenging for retailers to deal with returns promptly. Many people need more time or patience to wait for a return to be processed so that they may take their business elsewhere. This can lead to lost sales and revenue for retailers.
How Much Money Is Lost Because of Inefficient Returns
Inefficient returns processing can cost retailers a lot of money. In fact, it is estimated that 10% of all returned merchandise is never resold because it is damaged or lost in the return process. This can add up to millions of dollars in lost revenue for retailers, particularly during the holiday season when returns are at their highest.
In the United States alone, retailers experienced an estimated $761 billion in merchandise returns because of consumer rejection during the holiday season.
How Much Money Could Be Earned if Returns Are Done Right
It depends on the specific type of returns management and the associated investment strategy. However, generally, a well-executed returns management strategy can help investors achieve better risk-adjusted returns, protect their capital during complex markets, and improve their long-term performance.
While retailers lose a lot of money each year due to inefficient returns management, they could earn a significant amount if they were able to process returns more efficiently. This is because processing returns quickly and efficiently leads to happier customers who are more likely to shop with the retailer again.
Returns Management Tips
Retailers can do a few things to ensure they are prepared for the holiday rush of returns. Some of your action plans should include the following:
- Establish a clear returns policy: One of the most important things retailers can do to manage returns during the holiday season is to establish a transparent returns policy. This policy should be prominently displayed in the store so that customers know it before making a purchase. The policy should include information on what items can be returned, how long customers have to return them, and whether or not they will receive a refund or exchange.
- Train employees on handling returns: Retailers must train them on handling returns to process them efficiently. Employees should know how to check whether an item is eligible for a return, how to issue a refund or exchange, and how to deal with customers who are unsatisfied with their purchase.
- Have a plan for return items: Finally, retailers need to have a plan for what to do with the returned items. Some retailers donate returns to charity, while others put them back on the shelves for sale. Whatever the plan is, retailers must have a way to deal with returned items so that they don't end up with excess inventory.
How a 3PL Can Help With Returns Management
A third-party logistics (3PL) provider can be a valuable partner in helping retailers manage returns during the holiday season. A 3PL can provide several services to help retailers streamline their return process, including:
1. Advanced Analytics and Reporting
3PLs have access to powerful data analytics tools that can help eCommerce businesses make better decisions about their returns. This includes understanding customer behavior, product performance, and trends in the marketplace.
2. Flexible Shipping Options
3PLs offer a wide range of shipping options that you can customize to meet the needs of eCommerce businesses. It may come in the form of express shipping for customers who need their products quickly and economy shipping for those willing to wait a bit longer.
One of the main benefits of using a 3PL is that it can help eCommerce businesses scale their operations. The 3PLs have the infrastructure to handle increased volumes of orders and shipments.
Efficient returns management is critical for retailers during the holiday season. By establishing a clear returns policy, training employees on handling returns, and having a plan for return items, retailers can make the most of this peak season. In addition, working with a 3PL can help retailers streamline their return process and scale their operations.
If you are looking for a 3PL provider to help you with your returns management this holiday season, look no further than ShipNetwork. We are a leading eCommerce fulfillment company with a proven track record. Request a quote today.