Many Happy Returns
You were thrilled by holiday sales—don't be chilled by post-holiday returns.
URL:
http://www.entrepreneur.com/magazine/entrepreneur/2001/january/35550.html
As surely as a busy holiday season brings an increase in Web
sales, it also brings more returned merchandise. Unfortunately,
returned merchandise is a major by-product of increased Internet
growth, especially as consumers become much more comfortable
purchasing items over the Net.
"There will be more consumers returning goods purchased
over the Internet during this Christmas season than ever
before," explains Julie Breen, an e-commerce research analyst
at The Boston Consulting Group. "That's simply because
there are more goods than ever before being purchased over the
Internet."
Web shoppers return merchandise for a variety of reasons.
Twenty-five percent of customers who have returned items purchased
online say the product wasn't what they expected, according to
e-BuyersGuide.com's 1999 "Return to Sender"
Shoppers' Expressions survey. Seventeen percent of those who
returned items purchased online said the items didn't fit
correctly, and another 17 percent said the items were damaged.
Sixteen percent of respondents said the wrong items were delivered,
15 percent said they simply didn't want the items, and 10
percent said items were of poor quality.
Not being able to see or touch a product in real life has often
been cited as one of the Web's main short-comings. However,
that kind of problem may become less prominent in time, says Irwin
Barkan, founder of e-BuyersGuide.com, an independent data services
organization in Burlington, Massachusetts. "There's
incredible technology at work in making touch, feel, color, look,
size and fit issues more user-friendly," he says. "Some
of the issues regarding these changes are [related to] the current
bandwidth and speed available on consumers' computers. It may
be a few years before the lines cross between this technology and
consumers at home."
The good news: While returns are a problem for e-tailers,
they're not a headache for customers. In the e-BuyersGuide.com
survey, 78 percent of the consumers who returned items purchased
online during 1999's holiday season described their expe-rience
with an e-tailer as "satisfactory" or "very
satisfactory." The bad news: Of the 6 percent of shoppers who
had "unsatisfactory" experiences, 62 percent said they
wouldn't return to the e-tail sites responsible as a result.
The biggest consumer complaint regarding online returns? Having to
pay return postage.
Overall, 86 percent of the survey's respondents said they
considered e-tailers' returns policies of significant
importance. What features do users like in a returns policy?
Receiving a refund as soon as the item is returned; being able to
return the item to the e-tailer's brick-and-mortar store;
receiving postal pickup at their homes; low or no restocking fees;
and being able to exchange the item for something more
suitable.
Melissa Campanelli is a technology writer in Brooklyn, New
York, who has covered technology for Mobile Computing &
Communications and Sales & Marketing Management
magazines. You can reach her at mcampanelli@earthlink.net.
How well you handle online returns will likely determine your
future success-or failure-in the dotcom world.
There are a number of ways to handle returns, but one
particularly popular way is to provide customers with return labels
that can be placed on packages to be sent back to the ful-fillment
center or business. The U.S. Postal Service (USPS) was the first to
offer a system to allow customers to print return labels straight
from their own PCs. Called Returns@ease, it works like this: After
customers alert you that they want to return items, you can provide
them with merchandise return labels via the Web so they can return
the packages by mail.
To use Returns@ease, you must obtain a merchandise return permit
from the USPS and set up an account at a local post office. The
reg-istration application, programming codes and applicable
guidelines for using the service can be found online at
USPSPriorityMail.com. The service is free to customers and
doesn't require additional hardware or software. Keep in mind,
though, that there is a minimum charge to merchants of 30 cents per
return, plus postage and any fees for special services such as
shipping insurance and delivery confirmation.
UPS also has an e-returns service that provides consumers with a
label they can print from their PCs. But the UPS system has
additional functions. For example, "[If your customer returns
a CD because] he changed his mind, the system can ship it back to
the merchant for restocking," says Steve Holmes of UPS.
"But if the CD was returned because it was defective, the
system knows immediately to put the name and address of the
manufacturer on the return label so it can be returned under
warranty."
Once packages are shipped, you and your customers can keep track
of the status of those packages directly from your Web site or via
the UPS Web site. Customers can
hand return packages to any of UPS' 70,000 drivers,
or-depending on your returns policy-UPS drivers can pick up the
packages at consumers' homes.
Based on your returns policy, you'll be charged a
transaction fee and various transportation charges, which are
billed to you or your customer once you receive the items from each
return.
Many netpreneurs, not wanting to handle the returns process
themselves, turn instead to returns management solutions (RMS)
companies for help. RMS companies handle all aspects of returns
management for you. They can generate shipping labels and return
authorizations, which include information about why customers are
returning the products, what they're returning and other
pertinent information. They may also take care of the physical
handling and disposition of those returns. Sometimes, these
companies even have returns facilities, where employees scan, open,
verify and assess the condition of the returned products.
Many RMS companies integrate their systems with yours, so your
order management, credit processing, transportation, returns
authorization generation and customer service systems are all
connected. This way, you can track the status and condition of
returned products, and items can be routed to the locations you
designate.
Many RMS companies also allow your customers to return products
to USPS offices or other carriers' offices, where they're
shipped back to you. They also give your customers instant credit
for returns. RMS companies usually charge an installation fee,
starting at $10,000, and a transaction fee for each returned
package-anywhere from 50 cents to $4, depending on the level of
service offered.
One such company is Newgistics Inc.. With
Newgistics' Return-Valet service, you can offer your customers
the ability to return merchandise to local neighborhood parcel
centers and receive instant credit on the returned goods. You can
also have packages shipped in bulk to a regional returns facility,
which can help to substantially lower your costs associated with
returns. Another com-pany to check out is Return.com, which lets
you offer your customers a returns process through 3,400 Mail Boxes
Etc. locations nationwide or the USPS.
Whether you decide to process returns yourself or hand the
responsibility over to an outside firm, remember that satisfied
customers are the only ones who will return to your Web site for
purchases in the future. And having just served a ton of brand-new
customers this past holiday season, can you really afford to lose
them?
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