5 Steps to Make the Most of a Product Return

Smart retailers leverage products returns to improve the customer experience and drive repeat sales.

learn more about Peter Sobotta

By Peter Sobotta • Apr 20, 2016


Opinions expressed by Entrepreneur contributors are their own.

It seems innocent enough: A nondescript plastic envelope with a shirt and a form tucked inside and a return label slapped on the front is dropped into a mailbox as a customer drives to work.

Related: 3 Ways Smart Retailers Leverage Product Returns for Data

But what eventually happens to that package makes a huge difference in the fledging relationship between the customer returning that product and the retailer receiving it. Bungle it, and you risk sending the customer to the next site down in Google results. Handle it right, however, and you've taken a major step toward establishing a lifelong, profitable customer relationship.

Adobe Digital Index's report The ROI from Marketing to Existing Online Customers found that engaged, repeat customers account for 40 percent of a retailer's total revenue and drive three to seven times the revenue per visit compared to one-time buyers. For each 1 percent of shoppers who return for a subsequent visit, the report said, overall revenue will rise by about 10 percent.

So, how does your company win those return shoppers, the ones who offer glowing reviews and spirited word of mouth? Taking these five steps to facilitate product returns can help retailers actually achieve that status.

1. Make returns easy while collecting good data.

By following up with customers after their purchase, or providing a simple link to make a product return, the retailer can also invite consumers to offer feedback about the return in their own words. Monitoring social media posts mentioning the shirt gives companies another data source.

2. Receive and inspect the returned product quickly and record key data.

Set up a process to inspect at least a portion of incoming products, and enable techs to note issues in their own words, to add richness to the data.

Related: 6 Steps to a Return Policy That Will Score You More Sales

3. Apply advanced returns analytics.

Thanks to that early data collection and analytics to detect patterns in your data, you as retailer will know, even before that package comes back, that the sizing is off for a particular style. The tech's inspection has helped establish that size "medium" on your brand's sizing chart is more consistent with "large." This allows you to remedy the situation before any more returns occur -- and any more customers become unhappy with their purchase.

4. Act on that customer feedback.

The retailer can act proactively by adding detail to the product description, advising future customers to order this shirt style a size up from their usual order. The retailer can also take corrective steps with the vendor to comply with sizing guidelines for future orders.

5. Practice continuous business improvement.

With these changes in place, future orders of this basic shirt style will be better merchandised and sized, to prevent product returns. For those shirts that do come back, the retailer can fine-tune descriptions, specs and sizing to drive out new issues as they emerge.

Over time, the retailer will learn to do things correctly the first time, reducing product returns and fostering happy repeat customers.

Related: Improve Management of Retail Returns for a Better Customer Experience

Certainly, product returns at first seem like nothing more than a necessary evil, and the mechanics of returns, a routine occurrence. But instead look at that plastic envelope as an opportunity to improve your product quality and understanding of what customers want. That nondescript return may begin to look more like an important tool for effective retailing.

Peter Sobotta

Founder and CEO of Return Logic

Peter Sobotta is the founder and CEO of Return Logic, a technology startup that enables retailers to manage and optimize their product-returns strategy. Sobotta is a known industry expert and thought leader in the field of reverse logistics, ecommerce and supply-chain management.

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