January 4, 2006, 12:00 AM

Completing the Circle

(Page 2 of 2)

Jennifer Melzer, customer care manager for Road Runner Sports, says she relies on a SmartLabel Returns Center returns system from Newgistics Inc. to cut by more than half the time it takes to inform customers of the status of their return and their credit. In addition, the return status reports-which Road Runner receives from Newgistics within 48 hours of when a customer sends back a product, instead of the former time of 5 to 7 days-enables the retailer to better plan its warehouse staff for processing incoming returns.

“The real benefits are that our customers get an automatically triggered e-mail that informs them of their return, and our knowing what’s coming back,” she says. “If we know that X amount of returns are coming next week, we can plan to have enough people on hand to process them. This has really helped us meet our deadlines so that it takes about a week and a half for customers to get a credit.”

For many retailers, the returns process is still a backwater that gets overlooked as an important tool of customer service, Freeman Evans says. “Few retailers actually have a good return policy, and few use it to improve the comfort of customers,” she says. “And the returns policy itself is hard to find on many retailers’ web sites.”

But that may change as more retailers recognize the ability of the returns process to help improve multiple operations, and to bring customer relationships full circle. Most retailers, Freeman Evans notes, work hard to create a trusting relationship with customers on the front end through marketing and merchandising. “That trust continues throughout the customer relationship if the retailer does returns well too,” she says. l

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How streamlining returns can cut costs

Efficient returns processes may improve the relationship with the customer, but it also can streamline a retailer’s operations. Take Overstock.com, which implemented the ReturnCart system from Newgistics late last year. The pure-play discount retailer has reduced by more than half the number of customers who contact its customer service agents to ask about processing a return, says vice president of operations Tad Martin.

“Before we changed to this system, every customer either e-mailed or called us to initiate a return,” Martin says. “But now more than half are initiating and processing the return themselves.” That has freed up Overstock’s customer service reps to handle other calls and to focus on marketing and cross-selling.

Overstock customers can use the ReturnCart system to return an entire order or parts of one by filling out a form in the My Account/Returns section of Overstock.com. Overstock worked with Newgistics to input its own business rules to automatically accept or deny a return request entered online, and the ReturnCart feature automatically determines the optimal shipping option and calculates any return fees before the customer prints out a SmartLabel return slip. “This eliminated the need for an Overstock customer service rep to handle any portion of the return request,” says Jonathan Dampier, vice president of marketing and corporate strategy for Newgistics.

By integrating with carriers, the ReturnCart system alerts Overstock about the status of returns, including the weight of packages. That enables Overstock to send a confirmation and notice of a credit while the return is still in transit, instead of waiting until the return has been received at a warehouse, Martin says.

“If we verify that the return is the same weight of the package we originally sent, we may immediately send an e-mail to the customer, saying ‘The returned package is on the way, here’s your credit,’” he says. “If we can get a credit to them a few days earlier than expected, it creates a good feeling for customers.”

At outdoor sports gear retailer Moosejaw Mountaineering and Backcountry Travel Inc., deployment of the ReturnCart system has virtually eliminated e-mails to its contact center from customers seeking information on ordered or returned merchandise, Moosejaw CFO Jeffrey Wolfe says. “This will allow us to double our business this Christmas season without a huge increase in staff,” he said before the start of the 2005 holiday shopping season.

Newgistics provides SmartLabel return slips that Moosejaw places in each order with the customer’s order number; if a customer wants to return an item, she fills out the label, attaches it to the package and drops it in the mail. Newgistics picks up the package from the Postal Service and scans the SmartLabel’s bar code to forward confirmation of receipt to Moosejaw, triggering an automated e-mail to the Moosejaw customer about the status of the return, Wolfe says.

The same status information is automatically routed to Moosejaw’s contact center, enabling customer service reps to provide return status to customers. Newgistics charges retailers $5 to $6 per SmartLabel used for a returned item.

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