Rethinking returns management – corporate cost or profit centre?

In the US and Europe returns management has actually become a profit centre for the savviest retailers. This will soon be the case in SA too, says Craig Plowden, MD of Revlogs.

An outsourced returns management programme can quickly cover its costs and translate into profit for retailers.

Most retailers view their returns department in the same light as their mother-in-law. An irritating but irrefutable part of life. Forward-thinking retailers are learning that it is actually possible to have a healthy and profitable relationship with their ‘mother-in-law’: you just need to proactively nurture the relationship.

Communicate your returns policy clearly

Many customers assume that your returns policy is going to be strict and confusing. Much of this can be put down to fear of the unknown. Research by the University of Nevada’s Returns Logistics Education Center indicates that companies with identical return policies can be viewed quite differently by consumers, indicating that what matters more is the interface between the consumer and the retailer, not the actual return policy.

Communicate your returns policy at point of sale, on till slips, and in your advertisements and customers will gravitate towards your honest and upfront approach.

Choose and train your returns staff well

When returns are seen as the back end of the retail industry, the wrong type of staff get assigned to the returns department. Returns staff need to be just as personable and well-informed as sales staff, as a positive (or negative) returns experience can have a very strong influence on how a customer views your business.

Research suggests that as many as 70 – 80% of returned items are not defective in any way. This is especially true of electronic and computer-related purchases: often customers return something simply because they don’t understand how it works. Well-trained returns staff can deal with such issues both graciously and knowledgeably with the result that the customer leaves happy, and with a working product.

Even if the item is defective, or the customer will not take no for an answer, well-trained staff will go a long way towards smoothing over a potentially ugly situation, and keeping the customer away from your competitors.

As returns management experts, at Revlogs we’re experts in this tricky area and can train your staff to do their jobs better  or provide you with staff who specialise in dealing with returns.

Honour your promises – and attempt to go beyond them

Having a flexible, well-communicated returns policy and friendly and knowledgeable returns staff is all very well, but it won’t get you far if you can’t deliver on returns promises. If you say you’ll get it fixed within 21 working days, then that’s what the customer expects.

As a specialist in reverse logistics, we are used to dealing with sporadic and varied shipments, and our databases allow us to track each item individually as it makes its way back through the supply chain. Furthermore we are able to establish lasting relationships with third-party repairs centres and OEMs which allow us to leverage better service and swifter response times from them.

In short, we relish doing the work which other logistics providers shy away from, and we can guarantee an increase in the efficiency of your returns system.

Recapture value from returned items

In addition to the profits which will be forthcoming from the efficiency improvements outlined above, Revlogs can help you make some cold, hard cash from returned items. We’ll ensure that items with small defects are repaired and back on shelf in no time, and we’ll even buy items with bigger defects from you.

To recap, let’s have a look at how overhauling your returns management will actually make you money: 

  1. Customers from your competitors will migrate to you due to your attractive returns policy.
  2. Happy customers will come back again and again to spend their money in your store.
  3. Fewer items will actually be returned due to your well-trained returns staff.
  4. You’ll even be able to salvage some value from truly defective items.

If this sounds like the kind of future you’d like for your company, please give me a call. I’d love to make your returns headaches my next priority! Give me call at one of our regional offices on 011-608- 3968 (JHB); 021-934-2905 (CT); 031-700-5833 (KZN), Craig Plowden, Revlogs MD.

Revlogs offers a specialist returns management service which takes care of the entire process, from retrieving product from the retailer, through to repairing it or returning it to the OEM, and ensuring the new or repaired product is back in the retailer’s hands timeously to ensure the best possible customer service.

 

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