3 tips to help reduce returns

Retailers sell trillions of dollars worth of merchandise every year. Even in 2020, a period plagued by the coronavirus crisis, industry sales topped $4 trillion, according to the National Retail Federation.

But a substantial chunk of that merchandise winds up back with retailers, whether in inventory or on store shelves. Indeed, as a percentage of total sales last year, returns represented $428 billion, the NRF found.

And with the holiday season now here, easily the biggest shopping period of the year, return activity is virtually guaranteed to be swift, which will not only adversely affect a weak-kneed supply chain but raise costs. In the third quarter, more than half of retailers said their return costs rose compared to the second quarter, according to a survey from the Reverse Logistics Association. Whether the added expenses come from lower margins, shipping and handling, processing or overhead, the costs can be considerable

While returns can't be neutralized entirely, smart strategies can curb return activity. Here are a few best practices:

1.  Avoid silly mistakes
Every now and then, items will be returned purely because the buyer changed their mind. But more often than not, returns are related to items not meeting buyers' expectations. For example, according to Chain Store Age, nearly two-thirds of returns derive from errors that were made by the retailer or associate. Common complaints include the wrong item(s) being shipped and defects.

The easiest fix is for packers to be more cognizant of what they're preparing for shipment. This requires being more diligent about each product and double checking both the item itself as well as the original invoice. 

Smart customer service is central to reducing returns.

2. Simplify your return policy
While it may seem counterintuitive, streamlining your return policies can actually wind up benefiting your company in the long run. From contacting customer support to preparing a product for shipment to paying for the shipment itself to bringing an item to the location where it can actually be returned, the return process can be highly involved and a major hassle. That's the last thing you want when your customers are already frustrated at having to return the item to begin with.

But as polling from SalesCycle reveals, retailers with straightforward return processes wind up getting more business in the long run. Nearly 75% of respondents said they were either somewhat likely (37%) or very likely (35%) to shop more often with a retailer knowing the return process was hassle-free.

Whether it's through prepaid, printable packing labels, store drop-off and pickup or partnering with a shipment organization, a seamless return policy can wind up paying off.

3. Provide accurate sizing charts
It may come as no surprise that clothing is the merchandise category that sees the most returns. And that's frequently due to shirts, pants, jackets and the like being too snug or roomy. Ideally, your website has a size chart that specifies the dimensions of a small, medium or large. Ensure that those dimensions are truly reflective of the products themselves. This may be difficult to do if you have more than one t-shirt supplier, as one company's medium may be another's large or vice versa. It's important to use the same measuring method for your whole line of products. For example, if online buyers are advised to measure the full circumference of their chest for t-shirt, that method should be mirrored for other shirt types (e.g. sweatshirts, sweaters, etc.) and fabricators. You may also encourage previous buyers to offer feedback on the fit in the customer review section of your website.

These and other measures can bring greater stability to your supply chain.