Home FAQ: Retail Returns Management – EP004

FAQ: Retail Returns Management – EP004

This is an archived post from OrderDynamics, now Tecsys retail division.
FAQ: Retail Returns Management Managing returns is a vitally important part of the retail business. It can have impacts on profitability, employee morale, the overall health of your organization and it most certainly impacts the bottom line. Depending on how your organizational processes are structured, poor return processes can have a ripple impact on the entire supply chain. However, a good distributed order management system (DOM) can alleviate many challenges associated with returns. This post addresses several merchant questions about retail returns management. These questions come from Google queries about OrderDynamics' DOM solutions.

Q: How can a DOM / OMS Help With Returns?

DOM is the abbreviation for Distributed Order Management while an OMS stands for Order Management System. But for most retailers, these two are functionally similar. A DOM is the heart of any and all unified commerce systems and helps make your omnichannel retail vision a reality. As such a DOM is a critical element to any retail returns management process. A DOM provides retailers with a centralized system of record. This is where all orders, customers, shipments and other transactional details are stored. As such it is the perfect hub for retail returns management processing. Merchants should consider the following returns features in a DOM: BORIS (buy online return in-store) Partial returns Shipping label generation Reason code capturing Real-time inventory updating (for immediate restocking in-store and otherwise) Mismatch and exchange capabilities Supervisor override capable Receipt-free returns Provides standardized reports Barcode scanning support Includes fraud detection and prevention Read our retail returns management datasheet for more details.

Q: How Does a DOM Reduce the Impact of Chronic Returners?

A DOM is the centralized system of record for both customer records and orders. Using this data, retailers can track returns, establish behavioural profiles and apply customer restrictions based on non-standard behaviour. This analytical measure is a critical aspect of retail returns management. Amazon has famously blocked accounts. They have even declined customers from purchasing based on excessive returns. Certainly, this form of publicity is not ideal. But, it is a boundary that needs to be set and respected. Advanced order management systems should also allow retailers to set policies. For example, the system may recognize and allow only 7-day returns on electronics, but 30 or 90 days on fashion goods. It could use returns data to reject orders from a particular customer flagged for excessive returns. On these conditions, the system may also trigger the need for management approvals. Especially, for shoppers that are showing characteristics of becoming heavy returners. Taking active measures on excessive returners can help the bottom line. In fact, this is good for both retailers and consumers. It makes sure retailers don't get impacted by fraudulent or unfair customer behaviour. It protects consumers by reducing the need for retailers to price-in additional costs. A few abusive shoppers should not set the bar for everyone else!

Q: Can a DOM Process Receipt-Free Returns?

YES. Any good distributed order management system will give you a receipt-free returns process capability. If a system does not expressly include this feature, look for one that offers it.  Today's customers prefer retailers that offer good terms product returns. As such it’s important to your brand's customer experience. A quick, efficient and pain-free process is important to customer satisfaction. It can determine if a customer will continue to shop in the store after the return. This is something every retailer wants to encourage. A receipt-free retail returns management process lets customers return merchandise more quickly. While that's not going to help reduce your return rates, it can encourage customers to purchase more goods. It allows customers to recommend their organization to their friends. With effective processes and reduced service times for both your customers and your team. Receipt-free returns create efficient processes and pay dividends for both the short and long term.

Q: What is Important to Know About a Returns Policy?

Fortunately, of the 2000+ retailers in the Omni-2000 Global research, 76.9% identified as having friendly return policies. Canada Post found that 66% of consumers check the returns policy when shopping at a merchant for the first time. This shows how important this metric is to new customers. Further, they found that 84% of online shoppers perceive free returns shipping as very important for a positive returns experience. This emphasizes the importance of offering BORIS (in-store returns). It is part of a seamless omnichannel experience. In terms of which retailers offer free returns shipping, results vary widely by country. From the Omni-2000 research, the table below shows free returns shipping and BORIS for different countries. Retailers in Canada are least likely to offer free returns shipping at 13.9%. On the other hand, Germany/Austria were the nations most likely to offer it at 84.0%. [caption id="attachment_12672" align="aligncenter" width="1548"] Source: Omni-2000 Research: Global.[/caption]

Q: What is BORIS?

BORIS is an acronym that means Buy Online Return In-Store. Omnichannel retail continues to grow in popularity with consumers. As such, BORIS will play a growing role in retail returns management. As the name implies, it lets customers purchase goods online (e-commerce), yet return the items in a physical store. In fact, the recent Click & Collect Superconsumer research found that 70% of Superconsumers and 58% of occasional in-store pickup users, prefer to return items in-store. So in-store returns should be your priority, too. Also of interest on this point is that only 39.7% of multi-channel retailers offer BORIS as an option. Multi-channel merchants are retailers who have not connected their online and physical store experiences. On the other hand, 72.6% of omnichannel retailers offer BORIS to their customers. Again, these statistics are from the Omni-2000 Global research. In terms of satisfying customers' demand regarding returns, there is still room to grow. And there is room to attract new customers. Offer them a great returns policy. This supported by the functionality of your DOM.

Further Questions

If you have a further question about retail returns management, or any other retail/order management related question – please send us a note to info@orderdynamics.com. We will get back to you with an answer as soon as we can… and it might even inspire our next blog post! Author: Chris Peter is Senior Product Manager at OrderDynamics. Chris has 20+ years experience in Software Development and Product/Project Management, specializing in the development, management, implementation and support of enterprise level omni-channel and self-service solutions.
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