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There are a number of things you can do to improve your return rate, including better photos, better product descriptions, and maybe changing the sizing specifics of your products. Hopefully, you, too, took similar steps, and everything went smoothly, and you were able to obtain some sort of decrease. However, there are a number of reasons why an item is returned: like improper fit, imperfections, or just a customer changing his mind. Yes, there is always opportunity to improve, change, or better describe, but returns will be made and will not disappear. So what should we do? Let's be more precise and go through each problem one at a time.

First: One of the best ways to get started is by focusing on the customer and their interactions with the store. It is a well-known fact that the majority of clients research the return policy before making a purchase (especially the free return). When a consumer initiates a return, they want to know all of their options, including mail, in-store, home pickup, and so forth. Transparency is essential for the rest of the process. A clear overview of the status, as well as proactive warning if something is delayed, builds confidence and enhances the possibility that the customer will come back to the company. To wrap things up, a reimbursement procedure needs to be very clear in order to avoid any confusion.

Second: Returns have a negative influence on profit margins, which is an important consideration to keep in mind. They are costly for online retailers for a variety of reasons. The removal of normally available goods from circulation necessitates the acquisition of extra inventory in order to replace them. Returns diminish gross and net profit margins indirectly since they influence net sales. One approach to cut expenses is to encourage customers to return to a drop off location or a nearby store. This might be especially beneficial if the following size up is already available at the store. Automated proposals for price reductions might eliminate the need for any returns at all. Additional optimization possibilities can be discovered by utilizing artificial intelligence in the analysis of feedback and communication. As a result, dealing with returns concerns as fast as feasible is crucial. Remember that when e-commerce growth slows, negative return margin contributions become more apparent.

Third: Ethical considerations are now significant, but they will become even more so in the future. Many businesses have not fully realized all possibilities of reprocessing returned products in the past. Frequently, products were just destroyed. Images of things thrown away or burnt have sparked outrage on social media. Many businesses have begun to reevaluate and are now attempting to address this issue in a more sustainable manner. When it comes to reverse logistics, companies must pay greater attention to inspecting the commodities, classifying them based on their condition and the work necessary to resale them. Following the classification of the items, the following actions might be taken:
Is it acceptable to sell the things through the ecommerce store?
Do the refurbished products need to be clearly marked as such?
Do the shoes show indications of wear and should be sold in the shop since they are more likely to be accepted there?
Is it better to sell the items to a reseller?

Even though the returns process might take a long time, there are ways to speed things up. After an effective return procedure is put in place, the possibility for completely new business models increases significantly. Renting things, providing a platform of secondhand goods, and even providing a repair service are all viable options. Returns management takes time and patience, but I promise that an end-to-end strategy results in new business ideas!

SAP Intelligent Returns Management