Tips to Reduce Product Returns
By Michael Blumberg, Blumberg Advisory Group
Every business wants to do the best that it can regarding customer service. After all, it is the customers that can make or break our businesses. But, over the years, customers have gotten used to expecting retailers of all kinds to offer flexible return policies. In fact, they demand them. Retailers will do it too if they intend to build a loyal customer base. Each and every sale matters, so in this competitive world, companies must oblige.
Returns have never been higher. Instead of spending time with the customers troubleshooting their problems, it’s far easier to just accept the return and send it back to the manufacturer (or liquidator). Then, issue a replacement or credit for other in-store merchandise.
COMMON REASONS FOR RETURNS
Of course, there are countless reasons that a customer may want to return their product. It could be simply buyer’s remorse or perhaps there were defects in the product. Regardless of the reason, customers expect an easy return policy.
The most common reasons can be narrowed down to virtually every circumstance for the return:
- Customer Frustration (difficult product setup, assembly, or installation)
- Product Failure or Malfunction
- Product Defect/Dead on Arrival
- Buyer’s Remorse
Technical products, such as computers or other electronics, are typically returned for two primary reasons. They are either technical issues or non-technical issues.
- Technical Issues: Both Manufacturers and retailers can often minimize or avoid returns.
- Non-Technical Issues: More difficult to address.
At present, most reverse logistics professionals categorize returns as either customer frustration or product defect/malfunction after the initial “buyer’s remorse” assessment. Of course, buyer’s remorse is a vague term used to describe several reasons for the return. As a result, retailers and manufacturers are not accurately linking the products to the basic reason for the return. For instance, a percentage of buyer’s remorse returns are most likely caused by a technical issue that can be resolved, thereby avoiding the return.
The basic functions of the reverse logistics process are:
- Supply Chain/Reverse Logistics organization has the burden of managing the returns.
- The Product Management & Engineering, Quality, and R&D teams utilize return data to design and build better products. This can significantly reduce or avoid returns altogether.
- Customer/Technical Support and Field Service are responsible for fixing customer problems and initiating returns authorizations. Their goal is to resolve issues before they require a return.
STRATEGIES TO REDUCE RETURNS
These essential stakeholders within the reverse logistics process have created comprehensive strategies to reduce and avoid product returns.
- Restocking Fees: Retailers have implemented restocking fees to discourage consumers from becoming serial returners. It’s a financial penalty on consumers who intentionally plan to return a product after purchasing it.
- Enhanced Selling Skills: This is a method used by some companies that require a more thorough approach to understanding customer needs and requirements during the sales process. The goal is to make sure that all their specific needs will be met with that product so a return will be very unlikely.
- Better Instruction Manuals: Developing shorter, more comprehensive instructions are another way that companies have been able to minimize the chance of returns due to customer frustration.
- Use of Analytics: Reverse logistics stakeholders can leverage analytics to identify patterns and trends in returns to stay ahead of the curve.
- Digital Onboarding: This involves using automated, step-by-step instructions to train customers on the setup and use of their products. This has proven to be an efficient, user-friendly way to assist customers before they reach the point of frustration.
- Diagnostics: Embedded and remote diagnostics can be effective in isolating a fault and determining corrective action. Customer Support personnel often employ the technology during the warranty and post-warranty period if they’ve ruled out the common causes of product failure. Diagnostics focus on resolving internal issues related to software, firmware, or component failure, which generally requires the help of an expert as opposed to resolution by the customer.
- Training Videos: Many companies have used training videos to train consumers to set up and operate their products. By removing some of the challenges that consumers may have with product setup and installation, the likelihood of returns is minimal.
These strategies have effectively reduced returns due primarily to non-technical reasons but not necessarily for technical reasons. Also, many of these strategies are costly and time-consuming to implement. Of course, Reverse Logistics stakeholders understand the importance of creating better strategies.
USING TECHNOLOGY TO AVOID RETURNS
Computer vision, powered by Video and Augmented Reality, is an emerging technology that companies can utilize to reduce product returns due to both technical and non-technical reasons. Visual assistance allows users to instantly stream their mobile device camera or screen for real-time, interactive visual engagement.
Remote Support agents use this technology to see what the customer or technician sees through their smartphone cameras so they can be guided to a resolution. Instead of using words to explain the troubleshooting steps which can often be misunderstood, they are visually shown step-by-step actions to take.
Visual assistance powered by Computer Vision AI offers instant access to a trained AI system without holding in a phone queue or waiting for a service call. The benefit of AI virtual assistance technology is that it provides an automated and interactive self-service experience, saving time and money.
If you are ready to learn more about minimizing or avoiding returns, we invite you to visit us for a more thorough assessment.
Michael is a result driven executive with expertise in growing software and service businesses. Expert in the areas of Service Lifecycle Management, Field Service, and Reverse Logistics. In my most recent role as the CMO for a SaaS based software company, I was responsible for strengthening brand identity, improving lead generation, obtaining analyst coverage, and managing strategic alliances. Played a key role in helping the company secure a multi-million investment from a VC-firm to expand the sales, customer success, and marketing team.