In 2021, the average rate of retail returns reached just over 16%. That’s a lot of products that retailers have to process, receive, organize, and refund. As a result, automated returns are becoming increasingly popular with retailers and customers alike.
For retailers, automated returns can help reduce the costs associated with processing product returns, improve customer satisfaction, and increase customer loyalty.
Automated returns also provide valuable insight into customer behavior. This information can be used to improve the customer experience, target marketing campaigns, and make better business decisions.
Customers, too, benefit from automated e-commerce returns. Refunds or exchanges are issued faster using self-service returns.
Your customers can avoid the hassle of dealing with customer service. With automated returns, most people enjoy a more positive overall shopping experience.
Ultimately, automating your returns can improve your business metrics while providing a better customer experience. This guide will break down what automated returns are, how they work, and how to implement an automated returns system for your brand.
What are Automated Returns?
Automated returns use technology to streamline and facilitate the process of returning purchased products.
Instead of relying solely on manual methods, returns automation uses software to automatically complete tasks across the returns process, such as generating return labels, tracking return shipments, and processing refunds
Automated returns often begin with the customer initiating a return request via the retailer’s website, e-commerce platform, or dedicated return portal.
This may involve providing relevant order information, selecting the reason for the return, and specifying the desired resolution (refund, exchange, store credit, etc.).
Once the return request is submitted, the automated system generates a return label with the necessary shipping information, such as the customer’s address, the retailer’s return facility address, and a unique tracking number.
The return label can be accessed and printed by the customer or sent via email for convenience.
Automated returns often provide customers with real-time tracking and visibility into the status of their returns. Customers can monitor when the item has been shipped, received by the retailer, and processed using the unique tracking number provided on the return label.
Many automated returns systems offer prepaid return shipping labels so that customers don’t have to pay for return shipping costs out of their own pocket. Free returns are a big selling point for today’s customers, who expect the returns experience to be convenient and easy.
Manual vs. Automated Returns
Traditionally, retailers process returns manually – meaning a customer contacts customer service to initiate a return, and the representative must take action to process the return. This can be a time-consuming and labor-intensive process, and it can also be prone to errors.
Likewise, when a customer service team is responsible for accepting and routing returned goods, the process can be frustrating for customers who may have to wait on hold to speak to a customer service representative.
Automated returns allow customers to initiate a return quickly and easily through a self-service portal, and track the status of their return in real-time.
Retailers that only process a small number of e-commerce returns may be able to get away with a manual returns process, especially if you have a brick-and-mortar location to which customers can return items.
But, if you’re dealing with a large volume of returns, then automated returns may be a better option.
3 Benefits of Automated Returns for Retailers
Technology has made it possible for retailers of all sizes to automate elements of the returns process, making returns easier and more convenient for customers and merchants alike.
For merchants, automated returns free up time and resources to be allocated to other key business areas that drive sustainable growth. Automated returns provide a way to improve customer satisfaction and keep costs low – a win-win for e-commerce brands.
Reduced Costs and Improved Efficiency
Returns are costly to retailers: according to one estimate, it costs a company 66% of the price of a product to process a return. By switching to automated returns, retailers can reduce labor costs associated with manual return processing, inspection, and re-stocking — and bring that cost down.
Automated returns also allow for quicker processing and resolution. Instead of waiting for manual inspections and processing, automated systems can expedite the return validation and refund or exchange process.
This speed enhances customer satisfaction by reducing the time it takes to resolve return-related issues.
Increased Customer Satisfaction and Loyalty
Automated returns make the returns process easier and more convenient for customers – reducing their frustration and making it more likely they will patronize your store again.
Retailers can boost customer satisfaction simply by creating a clear returns policy. In one survey, more than 50% of respondents said they would avoid buying from a company with strict return policies.
Returns automation enables retailers to offer generous returns policies with longer return windows, free returns, and quick resolution. This encourages customers to continue coming back to your e-commerce store over and over.
Better Data and Analytics for Business Insights
Automated returns can track the reasons why customers are returning items. A returns platform on Shopify can ask a few simple questions to learn more about a customer’s return reasons.
Was the product defective? Was the sizing accurate? Was the product description misleading?
This information can be used to improve the quality of products and services or to create marketing campaigns for customers who are likely to return items. Retailers can also improve customer support by training team members to answer common questions about a product.
3 Benefits of Automated Returns for Consumers
We’ve all had to return a product at some point or another, as high return rates demonstrate. And consumers know what a poor returns process looks like when they have one.
That’s why 84% of shoppers say they won’t come back to a brand if they have a poor returns experience.
Automated returns allow customers to enjoy a hassle-free and convenient returns experience, minimizing the pain points that can break brand loyalty and generate bad word-of-mouth marketing for your brand. Here’s why customers love automated returns.
Faster and More Convenient Returns Process
Instead of having to visit physical stores or call customer service centers to initiate a return, customers can often initiate the process online from the comfort of their own homes. This eliminates the need for travel or waiting on hold, saving time and effort.
Likewise, automated returns streamline the return process, leading to faster resolutions. Customers can follow standardized procedures, ensuring consistency and accuracy in return handling.
The automated system can expedite the return validation and refund or exchange process, reducing the time needed to resolve return-related issues.
More Flexible and Personalized Return Options
An automated returns platform through Shopify, for instance, gives shoppers more power over their e-commerce returns.
Customers can track their returns using unique tracking numbers, enabling them to know when the item has been shipped, received by the retailer, and processed for resolution. This transparency gives customers peace of mind and keeps them informed throughout the process.
Likewise, customers have the flexibility to initiate the process at their own convenience. A customer can initiate returns, generate return labels, and track the status of their returns independently, without relying on customer service representatives.
Self-service options empower consumers to manage their returns at their convenience, 24/7.
Increased Confidence and Trust in Retailers
Inevitably, an e-commerce business that offers automated returns can build trust with its customers.
By offering convenient self-service options, streamlined processes, and real-time tracking, retailers demonstrate their commitment to customer satisfaction — a commitment that helps build customer loyalty and trust.
3 Challenges and Considerations for Automated Returns
While automated returns can bring numerous benefits, retailers should be aware of numerous challenges and considerations when implementing automated returns for their eCommerce business.
Keep these potential obstacles in mind as you plan to add automation to your returns operation.
Technical and Logistical Challenges
Returns automation software isn’t always a turn-on-and-go piece of technology. Retailers need to ensure that their automated returns system seamlessly integrates with their existing eCommerce platform, order management system, and inventory management system.
Compatibility and data synchronization between these systems are crucial for accurate return processing and inventory updates.
Likewise, automated returns can be complex to implement, especially for larger businesses with a high volume of returns. Businesses need an organized, mature reverse logistics process with an established, streamlined process for receiving, inspecting, and routing returned items.
This includes functionality like managing return shipping, inventory reconciliation, and coordinating with suppliers or third-party logistics providers, if applicable.
Security and Fraud Prevention
Unfortunately, self-service returns can be vulnerable to fraudulent activities. Sometimes, customers return counterfeit or used items instead of the original product.
Retailers should implement measures to mitigate fraud risks, such as verifying return labels, conducting random inspections, or requiring proof of purchase.
Additionally, automated returns involve the processing of sensitive data, such as credit card numbers and customer addresses.
Retailers must prioritize data privacy and implement robust security measures to protect customer information from breaches or unauthorized access. Compliance with data protection regulations, such as GDPR or CCPA, is crucial.
Ethical Considerations and Potential Consequences
As customer expectations evolve, retailers must continuously evaluate their automated returns processes. This involves monitoring customer feedback, analyzing return data, and making necessary adjustments to improve efficiency, accuracy, and customer satisfaction.
It’s up to the retailer to ensure their return portal is easy to use, the return window is fair, and your returns management software is working properly.
Return requests should be treated proactively and fairly, with transparent communication along the way. If something goes wrong, automation is not a stand-in for a human, personalized touch.
Fortunately, these challenges can be overcome with careful planning and implementation of your automated returns software.
3 Best Practices for Implementing Automated Returns
Successfully implementing automated returns takes the right technology, compliance with all applicable laws and regulations, such as the Fair Credit Billing Act and the Truth in Lending Act, and a great communication strategy.
Choosing the Right Technology and Software
There is a range of different automated returns solutions available, many of which handle discrete parts of the returns process.
Look for a solution that meets your specific needs and requirements. Consider factors such as the size and complexity of your business, the volume of returns that you receive, and your budget.
Also, consider easily each tool integrates with your order management system and your inventory management system.
Ensuring Compliance with Regulations and Policies
There are also a variety of regulations and policies to keep in mind as you set up your automated returns system. First, there are consumer protections your automated returns system should strive to meet.
The Fair Credit Billing Act and the Truth in Lending Act give consumers a way to dispute unauthorized charges on their accounts and those for undelivered goods or services. Privacy protections such as the GDPR and CCPA also apply if you’re processing credit card information and other PII.
Providing Clear and Transparent Communication to Customers
First and foremost, make sure that your system is easy to use and that it meets the needs of your customers. It is essential to provide adequate customer support and communication channels.
Customers may have questions or concerns or require assistance throughout the returns process. Retailers should offer accessible support channels, such as live chat, email, or phone support, to address customer inquiries promptly.
Why Choose Rich Returns For Shopify Returns Management Automation?
Rich Returns is a leading returns management automation platform designed specifically for Shopify merchants. With a tool like Rich Returns, e-commerce retailers can improve their bottom line, reduce human error in the returns process, ad boost customer retention.
Rich Returns makes the entire item return journey easy, intuitive, and hassle-free. Retailers can use policies and advanced rules to automate returns workflows — and give customers the option to exchange items instead of asking for refunds.
Built exclusively for Shopify and Shopify Plus, Rich Returns is easy to integrate into your existing system. Ready to get started with returns management software? Try Rich Returns FREE for 14 days and see how it can improve your returns management.