The Biggest Benefits of Automating the Returns Process

With proper management, returns can become a significant source of revenue for your 3PL business. But if you’re stuck handling returns with manual processes, it can instead turn into a huge time and money waster.

Automating your returns process cuts down on employee time (and frustration), improves visibility, and can salvage your retail partner’s customer relationship during an often tricky part of ecommerce. By making the end consumer happier, you make your retailer happier and build stronger partnerships.

Here are five of the biggest benefits of automating your returns process – and how to choose the right returns automation solution.

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1. Automation Saves Time

A manual returns process has a lot of moving parts that require employee attention to choreograph effectively, including:

  • Fielding a customer’s return request
  • Generating a return authorization and shipping label
  • Receive, inspect, and log the returned item
  • Issue a refund or replacement
  • And more.

Some of these steps will most likely fall on your retail partner, but your team still has to get the return information from the retailer and handle the receipt and inspection process on your end. If you’re dealing with more than a small handful of returns, this process can eat up a major portion of your team’s day – and this problem is only compounded as you build a bigger client roster.

Manually processing returns can also result in human error, which takes even more time to resolve. By automating your returns process, employees can quickly scan in returned products, software can walk them through the inspection criteria for each item, and refunds make their way back to the customer faster. All of this frees up employee time for other tasks.

2. Automated Returns Save (and Can Even Make) Money

No retailer likes returns. They can be a major source of frustration and lost profits, especially if you’re handling them using slower, manual processes. Inefficient returns handling also cuts into your profits – the more time you have to spend processing returns, the less manpower you have to take on new clients without having to hire more and more team members.

But more importantly, offering automated returns makes your 3PL much more attractive to new clients. Retailers know that the returns process is an important consideration for end customers when they’re thinking about a purchase. Being able to offer automated returns and faster exchanges or refunds to their customers can be one of the deciding factors for a retailer choosing your 3PL over a competitor.

3. An Automated Returns Solution Improves Communication

If you’re working with spreadsheets, phone, and/or email, processing each return can be downright painful. Multiple departments have to work in sync to approve, receive, handle and refund or replace a returned product. Doing all of this manually requires a lot of back and forth communication.

With an automated returns solution, a lot of human interaction can be cut, as mentioned earlier. And any communication the return does require is much easier and faster when everyone can access the same returns information dashboard.

4. Returns Management Software Improves Scalability

While your 3PL is still small, you may only have a few returns to process each day or week. But as you grow, the volume can quickly overwhelm your team and your available space. The average return rate for ecommerce is 20-30%, according to Shopify. When you’re working with large online retailers, 20% of total sales means a huge volume of products coming back – and that volume is all but impossible to manage effectively with spreadsheets and other manual processes.

That means delays and unhappy customers. Not a great look for your growing 3PL. Using a returns management platform allows you to scale much more easily to meet the needs of more and growing retail partners.

5. Automating Returns Generates Valuable Data

Visibility is a crucial part of managing any part of your 3PL operation. Manual data entry makes it more difficult to track each retailer’s rate of returns, which products have the highest number of returns, reasons customers returned each item, and more. With this information, you can offer your retail partners data-driven recommendations for product selection and improvement to keep items in customers’ hands instead of coming back to your warehouse.

But data has another important benefit: more opportunities for monetization. Automated returns management software generates data about the items being returned, but it also gives you valuable information on the returns process itself so you can ensure you’re billing your clients properly.

For example, if your 3PL charges for each touchpoint for an item, a more in-depth dispositioning flow gives you a more accurate number of steps to charge for. This data is also important to your retail partners: does one color of a shirt get returned unopened at a higher rate than other colors of the same product? This could indicate that the shade of blue doesn’t match the image or description on the product page. Does that shirt often get returned for damage? This may indicate a quality issue. Either way, helping your retailers resolve the problem will make you a much more valuable partner to them.
Returns automation offers a lot of benefits to consumers, retailers, and your 3PL. If you want to start enjoying those benefits – and offering them to your retail partners – get in touch today to learn what Octolan can do for your business.

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