Warehouse Returns and Exchanges

Are you struggling with managing the returns or cancellations at your ecommerce store? Have you planned the returns policy for your ecommerce shop? Well, it is a fact that ecommerce stores experience high returns and cancellations and they need a proper system to handle such requests. 

Sometimes a customer chooses to return an item because he/she has changed their mind and may no longer be interested in keeping the item. Other times, the customer may receive the wrong merchandise and may not want to keep it. In case of size or fit issues, the customer may want to exchange or return the item. 

Some other reasons of returns and exchanges can be as follows:

• The product arrived too late 
• The product did not match the description or images placed online
• The customer may receive a damaged product 
• The customer found a better price elsewhere 
• The purchase can be fraudulent – The user makes a purchase from a stolen card and requests a refund on another card. Wardrobing is another example of a fraudulent transaction wherein a customer purchases the products, uses them temporarily, and returns them. 

Returns can be a headache to the sales department and it may be a costly affair for any ecommerce business. It is important for ecommerce businesses to identify the major causes for returns and look for the best ways to prevent or reduce the returns.  

Why do you need a Warehouse Management System for reverse logistics? 

• Essential for ecommerce businesses that have to manage higher returns volumes 
• Identify re-usable returned products and place them at right places in shelves or bins
• Discard damaged goods and manage disposal of such items
• Issue credits or replacements quickly
• Relisting of the returned goods if they are in good condition

Reverse Logistics Process

Reverse logistics, also called returns management, is a process that guides inventory back to the warehouse. 

When a customer returns a product, the reverse logistic process involves the following steps:

1. The customer decides to ship back the product to the warehouse. The customer may use the return label and send it back to the seller’s warehouse.  Every store has different policies for the returns. The return policy mentioned on your ecommerce store should include the return window, what qualifies for a refund or exchange, who pays for the return shipping and more.  
2. In some cases, the sellers arrange a free pickup from the customers’ location. When the customer raises a request for return, the courier company picks the item from the customer’s location. The person who picks up the product checks the item and runs a QC check and if it passes the check, the item is shipped back to the seller.  
3. Once the item reaches the warehouse, the receiver company updates the inventory. The auditor checks the product and once it passes the QC, sellable items are placed back on the specific shelf for reselling or reused. Damaged or faulty items are not placed on shelves, and may be sent for recycling or refurbishment. 
4. Some ecommerce stores may provide exchange or refunds for the product returns while a few others may offer credits that can be used by the customers on their next purchase. 
5. In case of exchanges, the seller checks the availability of stock in the warehouse management system, and arranges packaging and shipping of the products. 
6. If the order qualifies for the refund, the seller refunds the amount in the original mode of payment or as credits to be used for future orders. 

By investing in the right warehouse management system, you will be able to monitor and control daily warehouse operations. In case of reverse logistics, you can check the availability of the exchanged products and ship them to the customers. The admin can be notified when restocking is required. Admin and supervisors can place orders for more stock to avoid stockout. 

Analyze why you are getting returns

It is important to identify the major reasons for returned products. Calculate the number and percentage of defective goods, products that didn’t match the description on the website, size issues, product not needed, and other factors so that you can take proper measures to overcome the controllable issues. Some reasons may not be in your control. Hence, you don’t need to bother about those reasons when analyzing the reasons for returns and cancellations of the orders. 

Such detailed analysis will help you focus on improving the quality of products and customer service. We can help you get the best WMS matching your exact business requirements and objectives. Our team takes time to understand your business processes, and comes up with suitable WMS solution. Using the right warehouse management software and keeping the information up-to-date, you can handle returns and reverse logistics effectively, and greater customer satisfaction. 

Return Merchandise Authorization (RMA) includes:

• Return process
• Cancel order process
• Exchange process
• Refund process
• Wallet system 

If a customer chooses to return a product, you can create a Return Materials Advice (RMA) or Credit. When the items are returned back, you can update the stock in the warehouse management system. The workflow process then moves to the issuing of exchange, repair, refund or credit. 

If the replacement of the returned goods is not available at the location where they got delivered back, you can check the warehouse management system and find out where the same product is available. If you have multiple warehouses, we can help you sync the data across all the locations and it can be traced using one single warehouse management system. 

eSellerHub can help you get a custom inventory management system with an integrated RMA module to manage all aspects of the Return merchandise authorization process. It would keep a track of the returns right from initial request to booking replacement goods. We simplify all your warehouse operations like maintaining inventory, providing location-allocation to returned goods, dispatch and invoicing of exchanged products, tracking stock updates, enhanced purchase management, and more.