From the December 2007 issue of eBiz Insider magazine. Download the complete issue as a PDF by clicking here.
Every year it happens; one of your gifts is so wrong it has to go back immediately. Returns are a business owner’s least favorite season’s greetings. They mean taking calls about returns or exchanges, and making sure to process returns and issue prompt refunds. Handling returns is crucial to your business success!
In our lawn and garden supply division, Customer Service Reps (CSR’s) inquire to see if returns are necessary. Often we learn that customers needed help with assembly or simply didn’t know how to use an item. Also, our CSR’s are empowered to offer customers special discounts on items they may have wanted to return – amazingly this works quite well!
Rules for Happy Shoppers:
- Returns are an inconvenience for the customer NOT for the merchant.
- The return process should be easy for the customer.
- Customers can make returns if they are not satisfied.
- The customer should not be punished for making a return.
- If you own a business, returns are a fact of life!
The RMA (Return Merchandise Authorization) Return vs. the No-Hassle Return
RMA’s require authorization numbers before returning products. We use this method, because our CSR’s educate customers on products which they often keep. RMA’s are a bit more work, but they can often save the sale.
A Hassle-Free return means no questions asked; no RMA needed. This is easier on consumers, but for merchants it can mean many costly returns.
When we owned our pet division, we had a Hassle-Free policy that did not require an RMA. We even pre-printed a postage paid return label on the customer’s invoice. Our return rates averaged an unacceptable 3.5%. We then adopted the RMA policy requiring customers to pay for return shipping unless we sent them the incorrect item. Our return rate went down to 2% and our re-order rate remained unchanged.
Facts of Life
Will returns ever go away? No. Can you minimize them? Yes. Before you decide on a new policy, think of your customers. Treat them well; you’ll keep them. Treat them badly; they’ll tell others.
Some state laws require that your return policy be clearly posted on your website. Print it on your packing slips or customer invoices for easy reference. And make sure that your CSR’s are empowered to keep the customer happy, because isn’t that what it’s all about?