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Returning a product – it's the unexpected detour in the online shopping journey.

Ensuring a generous return policy is crucial, but there are instances where customers exploit or engage in outright fraud, leading to significant revenue loss for your business.

Return abuse manifests in various ways. It might involve a serial returner who accumulates items without keeping any. Alternatively, a shopper might return a worn item, rendering it unsellable. In some cases, there are individuals intentionally attempting to deceive by returning counterfeit items, or even bizarre items like a box full of rocks.

Compounding the issue, reports suggest that abuse of returns imposes an annual cost of up to ₹1176.6 Crores on merchants every year.

It’s time to be pragmatic about returns…

1. Identify and Ban Serial Returners

Background: Return abuse often involves serial returners who exploit return policies for personal gain.

Approximately one in 10 shoppers confesses to purchasing clothing items solely for the purpose of wearing them for Instagram and other social media posts, with the intention of later returning them.

Don’t let your ecommerce store become an everyday return abuser’s free closet!

Strategy:

• Data Analysis:

  • Analyse customer purchase and return history.

  • Identify users with an unusually high return frequency.

• Thresholds and Alerts:

  • Set thresholds for acceptable return rates.

  • Implement automated alerts for accounts exceeding these thresholds.

• Ban Policy:

  • Establish a clear policy for banning serial returners.

  • Provide warnings before taking action.

Example:

2. Automate with product specific Workflows to Verify Return Eligibility

Background: Ensuring that only eligible products are accepted for return is crucial.

Customers frequently return items that fall outside your return criteria simply due to a lack of awareness. Instead of risking customer dissatisfaction, you might choose to absorb the cost.

Utilising automated returns management tools, enables you to establish conditions to guarantee that each item meets the requirements for a return.

Strategy:

• Automated Eligibility Checks:

  • Implement automated checks to verify if a product meets return criteria.

  • Consider factors like product condition and return reason.

• Customer Communication:

  • Clearly communicate return eligibility criteria during the purchase process.

  • Send reminders about eligibility at the time of return initiation.

• Workflow Integration:

  • Integrate eligibility verification into the return initiation process.

Example:

3. Integrate a Return Authorisation/Inspection Process (RMA)

Background: Implementing a thorough inspection process helps in identifying fraudulent returns.

While customers seeking refunds generally prefer swift reimbursement, it's equally crucial to verify that the products align with the conditions reported by the customer.

To thwart misrepresentation or potential fraud, such as the submission of counterfeit items, implement a thorough inspection process for high-value products before approving any refunds upon their return to the warehouse.

For example: when it comes to electronics products, ensure that the serial number corresponds to the original item, and confirm the item's condition hasn't been compromised due to customer actions, such as neglecting to adhere to your packaging requirements.

Strategy:

• Quality Control Measures:

  • Conduct rigorous inspections of returned items.

  • Document the condition of the product upon return.

• Photographic Evidence:

  • Require customers to provide photographic evidence of the product condition.

  • Use this evidence during the inspection process.

• Restocking Fees:

  • Apply restocking fees for items returned in non-original condition.

  • Clearly communicate this policy in the return process.

Example:

4. Improve the Experience for Non-Abusers aka genuinely Loyal Customers

Background: Balancing fraud prevention with a positive customer experience is essential.

Don't let a few bad experiences dictate your entire approach. Avoid resorting to overly restrictive return policies as a defence against fraud or abuse; such measures may drive potential customers away. Instead, leverage technology to construct efficient workflows for instant issue identification.

Implementing a returns management solution like Pragma's RMS empowers you to monitor customers' return behaviour, pinpoint problematic patterns, establish conditional workflows for approving or denying returns, and institute inspection processes before refund authorization if necessary. This streamlines operations without burdening your customer support team.

By adopting this approach, your brand can prioritise crafting a delightful customer experience. This ensures that the valuable customers you wish to retain will not only return but become loyal patrons, fostering a sustained and positive relationship.

Strategy:

• Communication and Education:

  • Clearly communicate the reasons behind return policies.

  • Educate customers on the impact of return abuse.

• Incentives for Non-Abusers:

  • Offer loyalty programs or discounts to customers with low return rates.

  • Recognize and reward loyal customers.

• Continuous Improvement:

  • Regularly review and update return policies based on customer feedback and market trends.

  • Seek input from customers on improving the return process.

Example:

That’s the end of our talk on “Lowering return abuse rates before 2024”...

☕ See you on the next coffee date!

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