Product Returns

5 Ways Retailers Can Prepare for the Post-Christmas Tsunami (as in Holiday Returns)

Staffers need to be well versed with processes, technology and customer service challenges, before the post-Christmas craziness arrives.
5 Ways Retailers Can Prepare for the Post-Christmas Tsunami (as in Holiday Returns)
Image credit: Shutterstock
Guest Writer
Founder and CEO, ReverseLogix
7 min read
Opinions expressed by Entrepreneur contributors are their own.

For anyone who has worked as a customer service agent, it will come as no surprise that returns are one of retailers' biggest nightmares. Haven't worked in retail? The internet is rife with stories you can read to glean a taste of what this hell is actually like.

Related: Holiday Returns Scammers to Cost Retailers Billions

For example, one agent shared a story on ihateretail about a customer who spent $17,000 in one day. The following day, that customer came back with a note from her therapist that claimed she was a shopping addict and needed to return the items!

The National Retail Federaation has estimated that every year, retailers are hit with $70 billion in returns. With around 9 percent of all purchased items being returned, retail businesses need a streamlined procedure in place that is quick and convenient both for consumers, as well as for employees.

Dealing with a return is not ideal for the customer retailer; however, returns can be a prime opportunity to demonstrate a high level of customer service and efficiency, if executed correctly. So, it's important to have a tried and tested system in place for before and after the Christmas period to ensure that potential tsunami of returns does not have a negative effect on anyone involved, meaning consumers and employees alike.

So what does that look like (for this year or maybe even next year)? Here are some tips for dealing with the onslaught:

1. Leave yourself plenty of time.

By the end of January, it's likely that most of your staff will know your company's return policies inside out. However, this would be a case of too little too late. It is important to undertake, at every level of your organization, effective returns-training in the months running up to the holiday season.

Everyone from the CEO to the cashier needs to be well acquainted with the policy, so that there are no misunderstandings, and so all stakeholders provide the most accurate information and best service possible to customers.

HR staff or managers who are running training sessions and role plays should ensure that staff are well versed with processes, technology and the art of dealing with challenging customer service scenarios -- before the post-Christmas craziness arrives.

Related: 5 Common Ecommerce Returns Mistakes

2. Have a tried and tested technological solution in place beforehand.

By adopting a process that can be automated as much as possible, you remove the burden from your staff, while making the overall process much smoother.

This is especially true for businesses that operate multi-channel returns, in which goods can be ordered online and returned in store, and vice versa. According to a recent study from UPS, 62 percent of shoppers surveyed said they were more likely to shop online if they can return those items in-store, and 70 percent who return items in-store said they were more likely to make an additional purchase when at the store,.

However, to appeal to these shoppers, it's essential to have a smooth system in place, one in which online and in-store inventories are connected in the same database, so that employees can easily check whether an item is covered by a returns policy and offers on-the-spot credit or cash back.

It is also wise to implement a software platform that provides an online support portal for returns, to reduce the workload and strain of customer support staff, while providing a simple, automated solution for clients. Various retail giants, such as Amazon, have integrated such a platform into their returns process.

3. Have a disposition-returns system in place.

Ensure that a plan is in place to deal with the disposition of returns. Though many customers may assume their returns are simply placed back on the shelf, this is actually far from the truth.

Many items end up as donations, or are repaired and resold to third parties, recycled or simply disposed of depending on the nature of the product.

Another option is to work with a third-party dispositions service. Companies such as Liquidity Services, which dubs itself as "the world's largest marketplace for business surplus," purchase stock with the intention of turning it into value again. According to the company, 50,000 items move through its 10,000-square-metre warehouse every two to four weeks, resulting in between 600,000 and 1.3 million products per year, all coming from a major retailer.

Liquidity Services sorts, catalogues and, when needed, refurbishes the returns and then turns around and sells them with heavily discounted wholesale prices. Occasionally, revenue can be returned to the retailer after Liquidity Services takes its commission.

However, for retailers who would prefer to keep dispositions in house, it is best to establish an automated system which can identify the best course of action for each returned item, limiting the time items spend in stockrooms, and thus maximizing the chances of financial returns from used goods.

4. Have a "returns zone" ready before the holidays.

Considering that these final days of December include several holiday (off from work) days, it is important to have everything in place for the January returns spike before people leave to celebrate with their families.

Another tale to put this into context? According to Buzzfeed, one returns agent told how, when she worked in a supermarket, a woman returned a disposable barbecue because, "It's just got lumps of black stuff in it." Said the ex-supermarket worker: "She had seen the picture on the front of the box that showed burgers and sausages on it and assumed they came with the barbecue."

Imagine the strain on a small business if it doesn't think ahead about how to handle customers like that.

Then there's the space issue: Though many companies might be able to deal with a steady flow of returned goods throughout the year, the festive period can prove especially stressful when companies face a larger-than-usual glut of returned items, with very little space to store them.

Leaders within the retail industry understand the need to think ahead on this one: Back in 1991, the Los Angeles Times reported on a 6,000-square-foot Nordstrom warehouse in Anaheim, Calif. reserved exculsively for Christmas period return items.

Your own company might not need a 6,000-square-foot warehouse, but it is important to ensure adequate space is reserved in stock rooms, or storage spaces, to process and store high volumes or returns in the first weeks ofJanuary.

5. Make sure everyone knows his or her role

Returning to work in the new year, after a week of over-indulgence and family fun, is tough enough as it is, without walking into a store or warehouse which resembles a disaster movie.

In preparation for the high influx of returns that will arrive as early as staff do, managers should clearly assign roles in advance, so that everyone knows what part he or she needs to play straight off the starting line. Many retailers choose to bring on extra seasonal staff to tide their staff over until the end of January. To maximize productivity for returns, it's smart to roll out a system that's similar to an assembly line, with a clear order and structure.

Finally, it is extremely important to reinforce to employees the fact that just because the post-holiday rush will be busy and stressful doesn't mean that customer service isn't still to be maintained at the highest level. Christmas returns are traditionally linked with frustrating customer-service interactions such as lost receipts. Employees should deal with customers in a polite and understanding manner, even if those customers are misinformed or lack the correct evidence of purchase.

Related: The Secret to Long-Term Customer Loyalty Is an Easy Return Policy

Overall, the festive season may be a very profitable time of year for retailers, but January may be bittersweet. Yet if retailers take the time to prepare their returns processes, employees, technological systems and workspaces, they can start the year off illustrating how they intend to behave all year long: providing great service.

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5 Steps to Make the Most of a Product Return