January 12, 2012, 11:26 AM

Another e-retailer brings its call center back to the United States

EBags reduces its customer service costs 34% with the move.

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Web-only handbag and luggage retailer eBags Inc. says it reduced customer service expenses in the fourth quarter by 34% compared with 2010 by moving its call center from the Philippines to the United States. 

The retailer spends around 1.25% of its total sales in a year on customer care, eBags says, which, according to Internet Retailer estimates, would shake out to around $2.5 million in 2011.

Part of the customer care savings came from I.T. improvements and fulfillment upgrades that reduced the need for customer service calls, says Rob Cassidy, vice president of operations. Plus, eBags dropped its 24-hour customer service hours to 7 a.m. to 10 p.m. Mountain time. “The volume of calls did not merit having a full-time night staff.”

American customer service reps were also able to better handle customer issues on the first call and reduce total call time. During the holiday shopping season, eBags’ 38 customer call center representatives in the United States were able to increase the retailer’s first call resolution rate to 80%, compared with 69% for the overseas operation. Also, call center contacts per order dropped by nearly 30%, eBags says, another sign the e-retailer is answering customers’ questions more efficiently.

The move also contributed to a 26% increase in sales for the fourth quarter compared with the same period in 2010, and an 11% increase in average order values. "We made the decision to insource our call center because we felt it was the best customer experience and more in line with the eBags brand,” Cassidy says. “We were pleasantly surprised to realize positive financial benefits as well.”

Another online retailer, Hayneedle Inc., last year also moved its call center operations back to the United States in an effort to improve customer service.

EBags is No. 114 in Internet Retailer’s Top 500 Guide. Hayneedle is No. 77.

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