Talk to an Expert
Talk to an Expert

Return to Vendor

2 min read

A recent report from payit shows items Brits are most likely to return. Interestingly kitchen appliances top the list followed by jeans and then shoes.

Whatever the product, the problem faced by retailers is a balance of ensuring the return can be restocked, and resold – while at the same time ensuring the customer is refunded as quickly as possible.

D2C (direct to customer) items present additional problems as returns need to get back to the vendor / supplier. Customers may also prefer to return the item to a store, so store colleagues need training to know what to do with non-stocked items. Inevitably the retailer loses out when customers are refunded before the supplier issues credit notes for received returns – or worse, the returned item gets “lost” along the way.

At Virtualstock we call this discrepancy the return recovery rate (RRR) which many retailers may have no visibility of. It matters though. A RRR of 80% means 20% of returns are refunded without the retailer recovering funds from the supplier. This could add up to a significant percentage of the product’s cost price – once you add in the cost of customer service, shipping, re-stocking, etc. How many good sales margins are wiped out by just one bad return?

To counter this, the retailer must have real time visibility of the entire returns process. Where is the item? What’s the status? What decisions have been made about it – and when? This allows for quicker customer refunds and therefore enhanced customer satisfaction, while improving the retailer’s RRR. These should be measurable KPIs, and implementing a platform or business processes to manage returns effectively should have a business case informed by them. Other intelligence gained from a returns platform will include the identification of products attracting higher than anticipated levels of returns (i.e. those pesky kitchen appliances), and which suppliers are late accepting returns or issuing credit notes.

So, while I hope your peak trading revenues were above expectations, I especially hope you have full visibility of your returns picture. And that this doesn’t come as a surprise in year end profit reporting. Or is it appropriate for me to say “many happy returns?!”


Ready to sell more products online without the risk?