Target and Toys R Us posted overall sales declines during the holidays.
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Britta Seuren, operations manager for e-commerce at apparel and outdoor gear e-retailer The North Face, a division of VF Corp.'s VF Outdoor Inc., also credits online pre-purchase content, such as multiple clear and detailed product images and sizing charts, for helping the TheNorthFace.com minimize product returns, although she declined to reveal the return rate. The e-retailer regularly reviews the return codes consumers check on return forms to indicate why they are making a return and creates or refines on-site features that help answer the problem, such as enlarged photos that show product details, improved sizing charts and customer reviews. "The goal we have in mind is, let's not even give them a reason to have a return," Seuren says.
When an online purchase doesn't work out, TheNorthFace.com directs consumers, via information printed on their packing slips, to visit the e-retailer's online returns web page, where they can log in or create an account and provide return details, such as their order number. They also have the option of printing out a pre-addressed and pre-paid FedEx shipping label, for which TheNorthFace.com deducts $7 from the reimbursement due the customer. Consumers can also do the legwork and ship and pay for another delivery form or return items to a The North Face retail store.
Seuren says its in-store online return rate calculation gets murky because it is up to the retail store to code the return as an online purchase, and stores aren't required to send these returns to Innotrac, TheNorthFace.com's fulfillment and returns processing provider. Seuren says stores often will resell items bought online and returned in store. 85% of large e-retailers that have a retail store presence allow in-store returns of online merchandise, according to the E-tailing Group.
No matter the return route, the e-retailer's goal with returns, Seuren says, is to handle them quickly and cheaply. TheNorthFace.com saves money on returns if the consumer uses the online process to initiate the return rather than call customer service, and items typically come back faster when a customer prints out the shipping label online rather than trying to figure out herself how to ship it back. Faster returns mean TheNorthFace.com can get the item back into inventory faster and resell it to another shopper.
For consumers, the benefit is that the process is quick and easy, and they get their refund faster, usually within 48 hours of Innotrac's receipt of the package, Seuren says. Innotrac sends TheNorthFace.com a daily report on the merchandise that's been returned and approved for resale so the e-retailer can sync the e-commerce site with available inventory and process the refund.
Speed is essential in this process, Seuren says, especially when it comes to the busy holiday season. TheNorthFace.com's return rate ticks up two to three percentage points during the peak sales season and Innotrac hires extra staff to stay on top of the added volume. Over the last three years, TheNorthFace.com and Innotrac decreased the return processing window from about 72 hours to 48 hours at the outside. Most are processed and back in inventory within 24 hours, Seuren says.
TheNorthFace.com has a 365-day return window, but Seuren says most returns come back within three to four weeks of purchase, and it's rare for a return to come in any later than two months. Shoebacca's Barling also says an extremely late return is rare.
E-retailers with shorter return windows are also trying to make the returns process easy for consumers and cost-effective for themselves. BackJoy.com, which sells a device designed to properly align a person's posture when seated, charges from $9.95 to $11.95 to ship its product to a consumer, and that shipping price factors in the cost BackJoy absorbs for return shipping during its 30-day return window. The company, which sells online and through televised infomercials, uses a2b Fulfillment for shipping and returns processing.
When a customer wants to return a product, BackJoy owner Bing Howenstein says it's often because the buyer doesn't understand how to use it. BackJoy customer service agents are trained to explain how to use the product and then, if the customer still doesn't want it, to suggest giving it to another family member or friend who may suffer from back pain. If the customer's answer is no, agents initiate the return process. "We're a word-of-mouth business and the worst thing we could do is make someone mad or upset. That'll hurt us down the road," Howenstein says.
The customer service rep sends a prepaid U.S. Postal Service shipping label via e-mail or mail, depending on the customer's preference, Howenstein says. Products are returned to a2b's fulfillment center outside Atlanta—customers get a series of e-mails about the product's shipping and processing status—where they are inspected and either returned to inventory in 24 to 48 hours or donated to charity. Customers are refunded the product price, less the original shipping and handling fee.
Howenstein says customers seem pleased with the returns policy and process, and that those policies help him invest his resources more profitably. He says calls to customer service to check on where a return is in the shipping and refund process are down, and that frees up representatives to take new orders or help existing customers understand the product.
"Not having a customer service operator spending time tracking a package and having that operator spend time saving a sale is a much more efficient use of my call center dollars," he says. The company's returns process, he says, helps his business run more efficiently, making investments in customer service that lead to more sales possible.
To view the Internet Retailer Guide to Fulfillment Products & Services click here.