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How a 3PL Handles eCommerce Returns for B2B & B2C Retail Brands

Psst! We know everyone likes having options, which is why we’ve recorded this blog post, so you can listen to it rather than read it if that’s what you’re into. Click the play button below to listen.

Today we’re talking about a process that probably deserves more attention than it gets: returns.

A return can take on many forms. It’s a sale that has become an “un-sale.” It’s a process that has to be followed to get the items put back to stock or disposed. It’s also an interaction with a consumer. And that’s why a return isn’t simply a lost sale. The return process is a touch point. It’s an opportunity to clearly communicate with the customer, and an opportunity to shape a good perception of the brand.

Think of it like every action having a reaction. A good experience with returns might not lead to a good online review, but it probably won’t lead to a bad product review. That’s what a smooth return should avoid. And you know, word of mouth and online reviews are so important these days. So many perceptions about a brand are formed outside of a curated website, online ads, and other marketing. So if a product is going to come back, then let the return be an easy, transparent, informative/informed/well-documented process.

Fast & Free

A brand’s returns process has to be clearly defined and conveyed to the customer – both online and in any packing materials. Just like the consumer expectation of wanting their shipping to be fast and free, they also want fast and free returns. This is all part of the balancing act a brand has to perform. A lot depends on the cost of the item and if there’s enough margin built into the product. Most of the returns we see are paid for by the end customers. Recent survey data indicates that almost 70% of consumers are “deterred from buying online by having to pay for return shipping.”

Dotcom Distribution’s own eCommerce study (coming soon, stay tuned) found that 90% of respondents “highly valued” free returns and that just over 60% of respondents “would buy again” from a brand that offers free returns and exchanges. 

Return Guides

We also develop return guides with our partner brands.  These return guides look very similar to the pack out guide used for outbound shipments. A brand’s return guide is an instruction manual to quickly and reliably handle the return. The faster a return is processed. The faster the customer gets a refund. The happier they are.

And that’s why thinking about returns is so important. Taking it a step further, the Dotcom Distribution returns department follows defined business rules for each sales channel (how to handle eCommerce returns, B2B returns, etc.). There are work rules that deal with returns at a high level. Within those rules are SOPs for each brand. Those are the specifics for how each brand’s returns will be handled.

How Returns Are Handled

Each return gets looked up by the order number or some other identifiable customer information. Like part of the address. Or the customer’s name. If the package shipped from our facility we’ll find it and process it. Each return has some level of inspection. Each return has some level of disposition (figuring out what do with the item after the item is inspected). Does it go back to stock, sent to scrap, reserved for liquidation, or will it be refurbished – either by us or by a third-party.

For some programs, we even do refurbishment in house. A number of apparel brands rely on us to refurbish their items. So, after inspection we might lightly clean an item. Re-tag it. Re bag it. This is more likely for individual B2C returns than the larger B2B returns from a store. The actions are based on the guidelines that the brands give to us. We follow what they tell us to do.

For health and beauty brands, you also have these two categories of returns, B2C and B2B. B2B returns get inspected for packaging, expiration dates, lots, things like that, and then a determination is made about whether they’re going back to stock. For B2C returns, we will perform an inspection and only return to stock unopened items. Opened items usually go to scrap.

And the secret of B2C returns is that many brands often don’t even bother to have a customer return the unused portion of a cream or a lipstick or a nail polish, right? There’s an expense involved, whether from the handling or if the brand pays the shipping charge. The brand just gives them a refund. The secret beyond that is that brands often keep a list of those people who have made returns to watch for an abuse of this practice.

Not Utilizing the 3PL for Returns

Not all brands use Dotcom’s returns service. For one, there is the expense that we’ve just described. The other aspect is that there’s a kind of business intelligence gained from the brand handling their returns in-house. Of course, there’s a limit before a brand says they’re going to outsource the function. But the point is that brands can get good insight into undeliverable packages, why a product might be delivered. How the goods are packed. There’s a lot to be learned. If we handle a return, or a different third-party returns company handles a return, the brand is one step away from that process. There are always trade-offs

Pre-Printed Return Labels and  RMAs:

In general, we see that the higher the average order value, the more likely that customers expect to have a return label included with the order. In the case of Dotcom Distribution, our Edison, NJ address is on the packing slip. It’s also on the brand’s website where returns guidelines, returns instructions are listed. And that kind of return is often blind to the brand until it shows up in the returns reporting, so they depend on us to look up orders in a variety of ways if customers just send product back to our facility.

As for an RMA, that information will be fed to our systems and the return is essentially matched to an inbound PO (purchase order),  like we’ve talked about when we discussed the receiving function.

If you’ve got a question about returns and how to manage them, click here to contact us.