What Does Your Returns Process Look Like?
It’s still too early to tell how smoothly supply chain operations and throughput will run this peak holiday shopping season, but now is the time to consider an often-overlooked component of any robust supply chain strategy: Returns management processing. When it comes to bolstering your warehouse or distribution center for the inevitable onslaught of post-holiday season returns, the benefits extend beyond the point of inception. Adding new efficiencies to improve your business’s returns processing will pay dividends well into the future no matter when they’re introduced.
Given the tight labor market, high worker turnover rates, supply shortages, and climbing e-commerce order volumes, planning ahead has never been more fundamental. Global e-commerce is on pace to hit $4.2 trillion by the end of 2021, according to data from the latest Adobe Digital Economy Index, and DHL eCommerce Solutions is expecting peak season volumes to grow 35% year over year. Unfortunately, recent National Association for Business Economics (NABE) research reflects low expectations for the labor shortage to recover. The near-term outlook is especially grim for owners of smaller businesses, as NABE’s August 2021 Jobs Report found a staggering 50% reported job openings they could not fill, more than double the 48-year historical average.
In other words, it’s no longer just a “help wanted” situation. More accurately, help is desperately needed. To bridge the gap, distributors must identify areas to improve the experience for both customers and employees. Returns are an integral part of the value proposition to customers, and like any warehouse function, it’s a process that can also impact employee retention. Here are some beneficial ways to enhance the returns process in your warehouse and make your organization a more attractive place to work for current and future employees.
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Establish a returns policy
Due to evolving customer demands and expectations, a simple, transparent and seamless returns experience is just as important as every other step in the customer journey – especially in e-commerce. But there is something to be said about the importance of establishing a clear and streamlined returns policy for your warehouse workers as well. Managing returns-related tasks and processes can quickly eat up considerable time and energy without a standard set of guidelines to follow – much less a proper system for handling them.
That’s not to say the policy needs to be overly strict; it can be generous, but you should have a policy that your workers understand so they know exactly what to do with returns when they arrive and how to navigate these requests. Whether assisting the customer with returns at the front counter or over the phone, or even processing that customer’s return or exchange within the warehouse, a clear returns policy will make the process run more smoothly for employees.
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Put a proper receiving process in place
While it can be tempting to ignore the reality of returns, putting a proper receiving process in place is the best way to thwart this impulse and prevent returns or exchanges from becoming a mounting, unaddressed problem. Make sure workers in your warehouse receive timely updates on returns so they can be prepared to deal with them as they arrive. For example, in the absence of a proper receiving process, returns can all too easily get mixed up and processed with inbound products by mistake – creating hours of additional labor for the salespeople and warehouse staff who are then responsible for tracking down those items.
Every return has a disposition. Is it broken? Is it damaged? Is it in the original box? Did the customer include a return merchandise authorization (RMA)? Has an exchange been requested? Tracking returns in a warehouse management system (WMS) – even before the disposition has been determined – can help avoid confusion around what to do with a given return and why it’s been sent back (and also reduce theft of returned goods). These simple steps make it easier to put a proper receiving process in place – just be sure to monitor and continue to optimize the process, as necessary, going forward. Otherwise, don’t be surprised if (or when) you start finding returns shoved into various corners of your warehouse, left for someone else to discover and deal with later.
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Equip your workers with adequate tools
Mistakes are inevitable in warehouse order fulfillment, yet many mistakes can be reduced or virtually eliminated with the right technology. Toss out any lingering paper-based processes – returns-related or otherwise – and equip your warehouse staff with adequate, digital tools (such as handheld scanners) that provide enhanced functionality to help them carry out their daily tasks with greater efficiency and less wasted time and effort. Deploying a WMS is another way to improve overall productivity and efficiency by keeping silly mistakes to a minimum (resulting in fewer returns and customer complaints) and encouraging employees to do their jobs even better.
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Understanding the reason for returns
Processing returns manually and dealing with each on a case-by-case basis can be expensive for your business operations and exhausting for your warehouse and customer service staff. In the event an item is damaged during inbound or outbound delivery, or if it was simply defective and somehow slipped through manufacturing quality assurance, an employee will be required to resolve the issue. While some operations try to designate at least one or two individuals for RMA duty on the warehouse floor, it’s not uncommon for that employee to be dealing with returns amidst (or on top of) their usual day-to-day work activities and responsibilities.
Fortunately, reason codes in a WMS can be used to help employees identify trends like frequently returned items or defective products. Reason codes can even help them monitor and mitigate fraudulent returns, helping them resolve such issues quickly, efficiently and without the burden of a time-consuming manual process to achieve the same result.
At the end of the day, what’s the value of a return anyway? Does it make sense to have a customer return a $4 item, especially if you’re paying for that customer to ship the item back? Do you plan to restock that item or simply throw it out? And even if you are going to restock it, is it worth the effort and expense to have employees take the time to process the return, review it, and place it back on the shelf again?
To reduce needless waste and keep these inefficiencies from contributing to potential employee frustration and burnout, do one better and tell the customer to keep or donate the item instead of burdening themselves (and your staff) with the hassle of returning it. Similarly, I know of one distributor that takes their returns and racks them and prices them super cheap for employees to buy directly from the company. It’s a better option than trashing items that come back, and it may be an option for items that can’t be resold at a profit or easily refurbished.
As we prepare for another challenging holiday season and the returns that follow, consider the impact returns have, not just on your customer experience, but also your employee experience. Taking these actions today will help ensure your warehouse workers have predictable, reliable returns processes in place ahead of the post-holiday surge.
This article first appeared in MultichannelMerchant on November 9, 2021. To read the article there, click here.