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Dealing With Online Returns

Ride the wave of post-holiday send-backs like a pro.
January 1, 2006

If you're an e-retailer, you can expect a certain share of your merchandise to be returned once the busy holiday season ends. Generally, returns are a cost center--and a pain in the neck. But there are ways to ease that pain.

Consider Swell Commerce Inc., a 40-employee e-tailer in San Juan Capistrano, California, that sells surf lifestyle apparel and accessories. About three years ago, Swell began using SmartLabel, from Newgistics Inc. of Austin, Texas. It's a service that can be used by businesses with at least 10,000 nonstore returns a year, a good fit for Swell's $12 million to $15 million in annual sales.

The service lets e-tailers offer customers a prepaid, preaddressed, bar-coded SmartLabel with their orders. To return an item, a customer affixes the SmartLabel to a package and drops it off anywhere the U.S. Postal Service retrieves mail. Swell charges customers a flat $6.95 for the return label, most of which gets paid to Newgistics.

Prior to using this service, "customers [had] to call us for a return authorization number and pay their own postage back to Swell," explains Nicholas Nathanson, the 36-year-old founder and president of Swell. Using Newgistics saves Swell money by reducing time-consuming customer service calls. The prepaid labels are also a good deal for customers, who pay lower shipping costs than with any other method they'd be able to find.

What's the best way to handle returns? Hillary Mendelsohn offers some tips. She's creator and editor in chief of Thepurplebook, 2006 Edition: The Definitive Guide to Exceptional Online Shopping and president of Thepurplebook LLC, a lifestyles media company in Beverly Hills, California, that focuses on online retailing.

Melissa Campanelli is a marketing and technology writer in New York City.