How Inventory Control Can Ease the Pain of Product Returns

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Poorly managed inventory and product returns can wreck havoc on your inventory control and consume your margins. eCommerce has grown rapidly and the volume of returned goods has kept pace; more consumers return products purchased online than at brick-and-mortar shops. That means your business needs to be prepared to handle increasing numbers of product returns.

Ensuring customer peace of mind

An increasing number of customers seek the security of a returns policy. If your returns policy is flexible and easy to navigate, your business could actually encourage customers to shop with you. You will also save money by retaining existing customers, should they need to return an item, which is even more advantageous given that acquiring new customers is expensive. The returns channel is a key portion of the overall customer experience, yet often neglected. No retailer likes to consider that goods they provide will be unsatisfactory. Some returns are within your businesses control and some are not.

Retail behemoths, like Amazon and Costco, generally have customer-friendly return policies. As a smaller retailer, you may have an advantage of having better control and visibility of manufacturers. For example, you can easily influence the customer’s experience of receiving dead-on-arrival or damaged goods by having a good relationship or connections with the manufacturer to allow a quick and ready swap.

You are also more able to influence the customer’s experience, rather than using anything overly rigid or templated. A helpful check is to ask yourself whether you, as a customer at your own store, would find your experience and returns policy to be fair and reasonable.

Keep tabs on returns with inventory control

Sensible planning can help you minimise costs in receiving, repacking, restocking, and reselling returned goods. You will want to ensure that managing returns on the whole costs you less than the revenue generated from the product – that’s your profit! Be careful not to be too generous in your policy – allowing returns does generally improve sales, but it might challenge your profitability if you are too generous.

Behind it all, returns can create an inventory control issue. Implementing an intelligent inventory control system will assist you to analyse stock movement and returns, allowing you to assess the length of time products spend on your shelves or in transit to and from the customer.

Software solutions or online platforms can let you do this in-house. That option allows you to follow real-time data on stock, orders, sales forecasts, and bottlenecks as they emerge.

That type of strategy lets you use RFID tags to track products more readily. Each RFID can store customer and product specific information, accessible as soon as it is scanned. The benefit of RFID is that it allows you to track inventory with as much granularity as you need. In turn, you can boost the time it takes for items to be returned, repacked, and resold.

You might also choose to let a third party provide logistics support over key segments of your operations. Investing in inventory control and clear returns processes can help keep stock moving and revenue being generated.

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Melanie - Unleashed Software
Melanie

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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