Edition 117, January 2022

Stop Returns from Becoming Returns

By Robert Coolidge, Encompass

During the pandemic-related lockdowns of 2020, U.S. ecommerce sales totaled $565 billion or 14% of all retail sales, according to the National Retail Federation. Returns from those sales doubled year over year totaling $102 billion.

The best way of preventing the hassles and expense of returned goods is to stop them from coming back in the first place.

The reverse logistics industry focuses much attention on how to extract as much value as possible from unavoidable returns: Repairing or refurbishing goods for resale through alternate channels or use as warranty replacements. Harvesting good working parts for economical repairs. Selling items to salvagers. While these tactics are vital to controlling costly returns, it’s equally important – if not more so – to address the root causes of why returns are being made.

Here are some considerations for businesses to try to keep more products with the buyers:

  • Point-of-sale – Are online descriptions accurate and comprehensive? All product information including details such as size, color, functionality, compatibility and more must be posted so what buyers receive is exactly what they expected.
  • Packaging – Are instructions clear and extremely simplistic? Are there plenty of photos and illustrations for assembly? Are outgoing shipments carefully quality checked to ensure all pieces are included?
  • Troubleshooting – How can a user quickly get help with the product? Do you offer online chat or call center support? What about videos providing step-by-step usage instructions?  
  • Virtual Repair – If users can be talked through simple repairs, perhaps adopt virtual technical support software. One solution is Help Lightning, which uses augmented reality to remotely place an expert on site. The software’s merged reality feature – merging two video streams – provides a video-based collaborative environment enabling a product expert to reach out and virtually touch a piece of equipment when a customer needs help. Using merged reality, along with 3D annotation, an expert can provide specific guidance, use hand gestures and even bring in tools, parts, images or instructions to quickly resolve problems.
  • Returns Policy – Take a hard look at your returns policy. Does it drive the right behavior or is it too lax? Nearly $8 billion of last year’s returns were fraudulent. To combat, many retailers are reconsidering the generous policies of years past.

Even with strong product support on the front end, some percentage of defectives will naturally make it through to end users. At this point the goal should still be to keep the brand in the home by enabling rapid repairs by maintaining an adequate supply of service parts.

In sum, the more difficulty consumers have with a product, the more likely they will return it and avoid that particular brand in the future. It’s critical to examine the product lifecycle and identify opportunities to keep the product in the home.

For more information about Encompass and how we can help your business with reverse logistics or other supply chain needs, please visit www.solutions.encompass.com.

Robert Coolidge
Robert Coolidge was appointed President & CEO of Encompass Supply Chain Solutions, Inc. in 2012. Since that time he has been highly instrumental in guiding the company to become one of the nation’s largest, most diversified providers of distribution, 3PL and 4PL solutions. Robert previously served as president of Vance Baldwin Electronics, which was acquired by Encompass in 2007. During his tenure at Vance Baldwin, Robert helped grow the company – founded by his grandfather in 1953 – from a local electronics parts supplier to a national distributor supplying original parts for a wide range of product verticals, comprising consumer electronics, appliance, computer, printer and many more.