How to Reduce the Cost of Customer Returns

Posted by Kristen Melendez on Thu, Dec 19, 2013 @ 09:46 AM

How to Reduce the Cost of Customer Returns

Customer returns aren’t something that anyone in the business of logistics wants to think about, but they’re a necessity. You probably hate the idea that a customer got something and doesn’t like it enough to keep it or, even worse, received the incorrect item to begin with. On top of that, returns are tricky. They require exact reverse logistics as well as excellent customer service to ensure that the customer ends up happy and will shop with you again. Round it out with the fact that returns are expensive, and you’ll understand why returns are easy to want to ignore. Fortunately, there are a number of great ways that many retailers and their e-commerce fulfillment partners are reducing the cost of customer returns.


  • Returns to stores: Simply because someone ordered online doesn’t mean they don’t have a store nearby. Many retailers are making it an option for customers who ordered an item online to return it to a local store. Even if the store doesn’t have the item in inventory, they can put it on a clearance rack and still sell it for profit.
  • Refurbishing and repurposing: When the items hit the warehouse from the supplier, they might be flawed in some way—an odd stitch here or a screen protector missing there. While the supplier should be notified, the fulfillment partner may have means to refurbish or fix the items in house. This prevents flawed items from ever reaching the customers, and means they don’t have to be shipped back to the supplier.
  • Management Team: Because returns are inevitable, it’s important to have a strong and dedicated returns team who is able to handle the volume. This team is usually responsible for processing the return, putting it back into stock or returning it to the supplier, issuing the refund or store credit, or getting the correct item shipped off quickly and accurately.
  • Speed and Accuracy: The sooner a customer gets the item he or she ordered, the less likely that person is to change their mind about wanting it. At the same time, making certain that the person gets the correct item the first time is the most important step in lowering customer returns.
  • Parcel Shipping Opportunities: Many retailers offer free returns as a means for good customer service, and it’s a great idea. Unfortunately, free returns are expensive. Fortunately, many parcel shipping services like FedEx or UPS offer a wide variety of shipping services, and some of these may work better than others. Find the service(s) that work best for your business and your budget. 
The Costs of E-Commerce White Paper          Benefits of Outsourcing E-commerce Fulfillment and Returns Case Study

Topics: Returns, Reverse Logistics