In this article, we will examine some of how retail returns can affect your business. This includes the cost of product returns, the rising volume of holiday returns and the need for a comprehensive IT system to track the transactional flow within your organization.
Holiday Returns Are Expected to Rise Higher
The US holiday season is traditionally one of the biggest consumer spending seasons of the year. But this year, the economy hasn’t been as robust as it once was, and many consumers are worried about inflation and food shortages. This has affected their shopping behavior. Consumers are looking to save money by trading down.
While this has helped drive strong consumer spending, it’s also put some companies in a difficult position. They must develop strategies to increase client loyalty. Additionally, retailers need to figure out how to simplify returns. Because of this, it’s essential to have a return policy clearly stated on the website.
One in five consumers plans to return at least one gift. However, about 6 percent of respondents plan to return more than ten gifts. Some retailers are concerned that this could mean higher costs for them.
Retailers can do a few things to ensure that the holiday season is a success. Retailers can start now by surfacing an easy return policy on their website. Additionally, they should keep the return policy in the fine print. By doing so, consumers can rest assured that they can expect to get their money back. Retailers can use kiosks for returns to consolidate returns to provide an excellent customer experience while not overtaxing staff.
Cost of Product Returns
Product returns are a significant issue for retailers. This is especially true in an omnichannel retail environment. Consumers value convenience, and they often return unwanted purchases. Retailers have an opportunity to minimize the impact of returns by using best-practice tools and forecasting technology.
Returns data can help you reduce costs and increase retention. It can also improve customer service. But you must understand how to use it and implement it properly.
Many retailers need more infrastructure to capture user feedback. For example, it cannot be easy to calculate the unit economics of returns. The cost of a returned item can include transportation and processing fees, product discounting expenses, and losses from liquidation.
The electronics industry spends about $14 billion per year on returns. These products are repackaged, reboxed, and even resold. Even worse, they often end up in landfills.
E-commerce retailers process millions of returns each year. Many ships return labels with every parcel. They also need to consider the costs of storing and processing returned products.
Moreover, customers returning a product may be motivated to purchase the next size up or want to buy another quality item. If the items are damaged, some retailers find them easier to dispose of.
IT Systems to Track Transactions From The Organization
IT systems to track your retail transactions from A to Z are essential to your small business’s future proof. The best POS software is a one-stop shop for storing, monitoring and analyzing your sales and inventory. As such, you must prioritize your POS software in your annual budgeting rite of passage. Fortunately, there are plenty of POS solutions in the cloud for a nominal monthly fee. You’ll also find the software to be quite flexible and user-friendly. The best part is you can get your POS software for a fraction of what it would cost to hire an external consultant.
Moreover, the software will automatically configure your data to your liking. Whether running a single store or a multi-location business, you can count on your new POS solution to increase customer satisfaction, streamline business processes and reduce costs. In the end, you’ll have the peace of mind of knowing that your store will never be the victim of a credit card dispute.
‘Buy Online, Return in Store’ Scenarios
As the retail industry evolves, new trends are cropping up. For instance, the buy online, return in store (BORIS) concept has gained traction. This tactic allows shoppers to complete their purchases while returning their items in one convenient trip. It’s a win-win for consumers and retailers alike. The National Retail Federation estimates that returns make up 16.6 percent of all sales. Despite this grim statistic, savvy retailers are testing their mettle. They may be apprehensive about adopting a BORIS program, but with a bit of strategic planning, it can be a lucrative source of revenue.
One of the most critical aspects of this strategy is deciding which of your retail associates will be in charge of processing returns. You’ll want to avoid a scenario where a customer returns an item for a refund and then spends the next hour in your store attempting to replace it. Similarly, you’ll need to establish which retail partner is responsible for putting items on your shelves first. Ultimately, a buy online, return in store (BORIS) policy will keep your customers happy while reducing expenses.