Contributions to Profit Profit From Your Returns
Also, ensure your shipping personnel pack orders in an appealing way. Remember, you never get a second chance at a first impression. If your customer opens her box and the item's improperly or sloppily packed, it reflects badly on your company and can increase your return rate.
4. Don't accept returns when you can accept exchanges. Customers return many items needlessly. Having spent much time in the fashion industry where more than 30 percent return rates are the norm, I know fit and color are among the top return reasons.
Ensure your customer service reps (CSRs) are trained in the art of turning returns into exchanges. Often this can be accomplished by simply having the CSR offer an exchange. The communication can be as simple as, "Ms. Jones, would you like us to ship you the item in a different size, color, etc.?" A CSR also can use his cross-selling skills by saying, "By the way, Ms. Jones, many of our customers who ordered item X also ordered item Y. Would you like us to send you that one instead?"
Some companies will even pay for the inbound and outbound shipping on an exchange situation — another way to reduce risk and save the order.
Tip: Make sure your CSRs aren't too aggressive in offering upsell and cross-sell items on the original order. Monitor returns on both the aggregate and individual CSR level.
5. Employ your circulation planning and returns know-how. There's a housefile segment of customers who've purchased once and returned. On the books, they're "zero dollar, zero frequency" customers. I've mailed this segment for a number of mailers and been profitable. You might want to test this segment as well.
You likely will see a higher return rate, as some people chronically buy and return products. Through testing, you might see that despite higher return rates, enough product stays in customers' hands to meet profit expectations. Consider that this segment should be in line with your list-rental goals and the higher return rate is offset by the fact that there's no list-rental fee.