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Four Steps to Managing Returns

Just a few simple steps can make returns easy, quick, and – just maybe – rare. By Jimmy Guterman

Not every sale stays a sale. Most Internet retailers permit returns under some conditions. The biggest ones (Amazon, Best Buy) even have entire sections of their websites devoted to returns and refunds. It’s good business to allow returns; it shows that your business stands behind its products. Chances are your competitors permit returns, and that makes it even more important that you do as well. Perhaps one way your business can differentiate itself is by having a particularly customer-friendly returns policy.

The first way to manage returns is to make sure customers know upfront what your return policies are. The policies should be clearly available on your website (or on your listing if you sell through another site). Straightforward policies lead to happier customers.

Second, make it easy for customers to return. It may seem counterintuitive to make it easy to send items back, but painless, orderly returns give customers confidence in your business and they make it more likely that customers will do business with you in the future. They make it easier for you, too -- fast return management means you can spend less time on the problem and get back to selling as soon as possible. Support email addresses and phone numbers should be displayed prominently on your website and on the print invoice that arrives with the product. And if you are one of the minority of Internet retailers who don’t permit returns, make that clear. “No policy” doesn’t mean “no returns”; it means you’ll have to spend plenty of time explaining your policies to customers one by one because you didn’t provide them to your customer on the front end.

Third, prepare for returns. According to Lavi Industries, nearly 20 percent of Americans return at least one holiday gift. As Internet retailers know well, the weeks after Christmas are high time for returns. Have people ready to manage the expected influx, either in house or from an outside fulfillment agent.

Finally, one of the best ways to manage returns is to make returns less likely. You can’t control completely whether people like what they get, but you can exert plenty of control over what condition the items are in when received by the customer and how easy it is for the customer to use the item. Both are factors in whether a customer returns an item.  More careful packing reduces the frequency of damaged goods. You can also increase the likelihood that a customer will keep a product by making it easier to master the product itself. According to a 2011 report from Forrester, “Emerging Technologies Help Post-Purchase Support Strategies,” in the six months before that report was issued, 32% of American online consumers “purchased a product with which they experienced difficulty assembling or using.” By using online forums, co-browsing, and video tutorials, Internet retailers can help people unhappy with their purchases get happy with their purchases and prevent returns. And, as Forrester’s Diane Clarkson notes, “customers expect to get post-purchase support online, especially Generation Y.” Make it easy to return purchases, but make it even easier for customers to want to keep their purchases.

Every Internet retailer has to deal with returns. Please let us know your best tips for managing them and we’ll pass them along.

About the author

Jimmy Guterman president of The Vineyard Group; previously he was senior editor of Harvard Business Review.

Jimmy Guterman

The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of FedEx.