Businesses with poor reverse logistics are often left at a loss as to why customers return their product. Since the data they collect is questionable, they don’t know which aspect to improve.
Of course, it might be that your current program is the problem. Invest in a more efficient reverse logistics program so that you can better work on these common reasons for customer returns.
Damaged, faulty, or mislabeled products result in a staggering 65% percent of all product returns. Clothes that are the wrong size, appliances that don’t match their description, or incompatible electronic devices are just a few examples.
No manufacturer makes products at a perfect 100% success rate, so these cases should be solved by your reverse logistics’ warranties and transparent exchange policies.
It’s a classic problem: customers choosing another business over yours. It might just be unfortunate timing that the buyer discovered a better alternative while yours is in transit, but it doesn’t mean that reverse logistics can’t solve the problem.
During the return process, inquire if it’s the other business’ product or delivery terms that are better. This way, you’ll know what to improve.
Change of necessity
While waiting for the product, the buyer might have already solved the problem in another way, or their needs changed, as is the case with luxury or hobbyist items.
Again, your reverse logistics program has to draw the truth. If it took too long to arrive, then what’s stopping them from seeking an alternative?
The product might be stuck at the warehouse that’s already exceeded its capacity. It can also get stuck in the destination country’s customs office. Or your third-party logistics provider might have poor service. Thus, you need to meet with your logistics provider often to maintain efficiency in deliveries.
A record $41.6 billion worth of products were returned during the previous holiday season. This is just accounting for Christmas. Black Friday, Boxing Day, and even Valentine’s Day are all peak dates when returns are fulfilled at a tremendous rate.
The reasons are assorted – from impulsive buying to unwanted gifts – and can only be answered by a reverse logistics program enforcing excellent return policies.
Annual losses from return fraud shot up by 35% in 2019. Fraudulent returns comprised 8.8% of all profits, which was 76% higher than the previous year. These are all troubling statistics both for big and small online businesses alike.
Frauds do this either to launder money from stolen credit cards or by stealing receipts to trigger a falsified return.
Another form of return fraud is “wardrobing.” It’s when people buy high-end products, use them for a brief period with the labels still intact, and then return them for a full refund. Typical examples are when people buy clothes for a single-day event or a large television to watch a sporting event.
Sometimes, customers even deliberately damage the product to ensure a full refund. This is what triggers “no return, no exchange” policies that protect retail businesses from selling previously used items.
If you want to aid in customer satisfaction and the creation of repeat buyers, you have to have a clear response for each of these scenarios. Otherwise, you risk suffering from losses that you might not bounce back from.