The way firms sell has changed as a result of eCommerce. Customers not only expect a smooth delivery experience but an efficient return and replace process too, in case the need arises. To understand this in detail, let us first decode what reverse logistics is, and how does it work?
Returns are an essential part of your fulfillment operations that affect your customer experience and your financial line. After all, return labels are expensive, and online customers expect simplicity at every step of the purchasing process.
- Introduction
- What is Reverse Logistics?
- Process of Reverse logistics
- 5 Steps to Ace Your Reverse Logistics
- Reverse Logistics vs. Traditional Logistics
- Challenges Faced during Reverse Logistics
- How to Implement a Reverse Logistics Process?
What is Reverse Logistics?
The supply chain process of guiding merchandise back to a retailer’s warehouse is reverse logistics, sometimes known as returns management.
Reverse logistics, for example, would transport the undesirable (by the customer) product back to your eCommerce site to be resold, reused, recycled, or refurbished.
However, a comprehensive reverse logistics procedure isn’t just for eCommerce returns. Any item returning to your warehouse must be tracked and handled correctly, which includes:
- Products rented
- Items that can’t be shipped to a consumer
- Inventory from third-party retailers, and distributors that haven’t sold (including products that have reached the end of their shelf life)
Process of Reverse Logistics
The reverse logistics process looks somewhat like this when a product returns to the warehouse:
- The customer chooses to return an item to the retailer.
- The customer either drops off the item at a pickup location or a local store or mails it back to the retailer’s warehouse using a return label.
- The retailer determines what to do with the merchandise once it arrives. Any sellable items are returned to the shelf after reviewing incoming returns. Defective or damaged things are set aside to be discarded or reconditioned.
- The customer receives a refund (if their order qualifies).
5 Steps to Ace your Reverse Logistics
1. Make a Returns Policy That is Easy to Understand
Make your return policy clear and easily accessible for an efficient customer experience with courier aggregator. Customers will have plenty of opportunities to check your return policy this way. Make sure to include your return policy on your website. You can include the policy in:
- Home page
- Product description page
- Shopping cart page
- Post-purchase emails
Making your policies clear reduces consumer dissatisfaction, resulting in more efficient operations for everyone. Make the steps in the returns flow as clear and straightforward as possible. Visibility and retention of policies pave the stage for a smooth return process.
2. Think About Your Bottom Line
A good returns policy encourages customers to buy and reduces the financial impact of returns on your business. But, of course, you’ll have to pay for the return label, restocking work, and any lost item value.
Return policies that are easy to understand are popular with customers, which means they are suitable for conversions. However, what is beneficial for revenue can lead to abuse from purchasers fixated on free shipping. Reverse logistics can quickly become unsustainable, especially if free returns are offered.
Strike a balance where refunds are simple for legitimate customers but not too simple to promote abuse. At the same time, you can experiment with policy specifics to suit customers and achieve your growth objectives.
3. Plan for Returns
You have limited control over the time or frequency of returns. Delays, inventory challenges, and frustration may result from this. Therefore, it’s critical to lay a solid basis for your reverse logistics, which starts with anticipating returns.
Here are a few things you can do to get ready for the returns:
Forms: Collect customer information to determine why an item is being returned and how to restock it quickly.
Custom labeling: You can tailor your return shipping labels to ensure they arrive at the most efficient sorting, separation, and processing locations. This becomes even more critical if you have a number of return orders, a specialized return location, or operate with a courier aggregator.
4. Provide a Smooth Return Process
The return experience is a crucial part of customer service. This is because maintaining customers requires a simple returns process. Try the following strategies for your reverse logistics to make it easier for customers to return items by mail:
Make it simple for customers to obtain a shipping label and return an item by communicating your return policy. Third-party drop-off locations should be promoted.
Add a return shipping label to your shipments. Including a return shipping label eliminates a few time-consuming stages in the return procedure. Paying twice for labels, on the other hand, might add up to the total cost.
5. Create a Procedure for Receiving Returns
It’s critical to have an effective strategy for dealing with returns as they arrive. This will necessitate designating a space for returns processing and allocating labor hours (maybe including your own) to returning inbound items to inventory or logging them as a loss. For the following reverse logistics procedures, you’ll need to construct steps:
- Identifying the objects
- Sorting
- Refurbishing and repackaging
- Disposal restocking if necessary
Challenges Faced During Reverse Logistics
While there are evident advantages to investing in a reverse logistics program, there are several hazards to be aware of when building your new process. Here are some of the most challenging obstacles to overcome while dealing with returns.
1. Expectations of Customers
Even if you have a vast warehouse staff, processing returns and dealing with customer support issues takes time.
Customers don’t care about how you manage your operations, to put it bluntly. However, they have high expectations for the returns process, and many will not return to your store if you don’t meet them.
2. Controlling the Quality
The products in your return supply chain were returned for a reason, whether because the customer ordered the wrong size or the item was defective. In addition, unsellable merchandise can return to the shelf due to a bad return logistics process.
Establish quality standards to avoid this from happening. Test all returned inventory, not only the items marked “wrong size” or “incorrect color” on the returns form. Are the tags still connected to it? Is there any noticeable wear and tear? Before restocking, any product should be in perfect condition.
If you’re dealing with third-party logistics companies to process returns, follow the same procedure. Share your quality standards with them, and conduct random spot checks to ensure that any defective merchandise is identified.
If inventory doesn’t meet your quality standards, it may appear that you’re throwing it away, but consider the long-term consequences. When you resell damaged inventory, you enhance the chances of getting the same goods back.
How to Implement a Reverse Logistics Process?
There’s no getting around it, no matter how many customers returns your company handles, the reverse logistics process must be joyful for everyone involved. There’s a lot on the line, including customer loyalty.
Here’s how to create a supply chain procedure that handles returns quickly and efficiently while still meeting customer expectations.
- Select a method of return.
- Decide on a return policy.
- Have a specific area for returns.
- Invest in technology for return processing.
- Decide what to do with unsaleable inventory.
Shipclues is a SaaS-based end-to-end logistics service that automates the shipping process from seller to buyer and vice-versa. It enables you to deliver your items across India efficiently as well as manage returns easily. We integrate all of your logistical operations on one platform, thanks to AI and machine learning technologies.
