How to Choose the Best Returns Management Software for Your E-commerce Business

Managing e-commerce returns is one of the biggest challenges for online businesses. 

A study by Invesp shows that almost 30% of all products purchased online are returned and the number is only increasing by the day. 

Now there are several reasons why returns are so common in e-commerce; some of the most common ones reported being: 

source

But managing product return requests is easier said than done. 

From taking in the request, ensuring the product returns to your warehouse timely, updating the inventory for product availability post quality analysis, issuing a refund or an exchange to the customer, and keeping the customer in the loop during the process, there’s a lot that needs to be tackled. 

That’s where choosing the right returns management software comes into play and in this post, we tell you how. 

What is a return management software? 

Returns management software is a system that helps e-commerce businesses set up a workflow for processing returns with the help of automation. It offers a centralized platform for the business to receive, view, approve, and process return requests. The software’s objective is to simplify the logistics, communication, and data management involved in returns, ensuring a smoother experience for both the retailer and the customer. 

Why is a returns management software important? 

Here are some reasons why e-commerce businesses need returns management software in addition to their order management and inventory tracking solutions: 

• Improves customer experience - The software helps simplify returns with a self-service portal, real-time tracking, and flexible options like exchanges or store credits. 
• Brings efficiency into returns - It standardizes the returns process to minimize errors and automates tasks like approvals, inventory updates, issuing refunds, or triggering exchanges. 
• Reduces reverse logistics costs - A good returns system optimizes logistics with cost-effective labels, speeds up inventory restocking, and prevents return fraud. 
• Provides actionable insights - The software gives you the ability to analyze return trends, customer behavior, and preferences, creating opportunities for improving business strategies. 
• Supports revenue retention - A returns system can help set up a workflow that encourages exchanges, offers store credits or incentives, and helps retain customers. 
• Competitive advantage - With a seamless return experience, brands can offer a positive customer experience, which helps improve brand reputation in competitive markets. 

How to choose the right returns management software? 

Today, there are several softwares available to help e-commerce businesses manage returns. Here’s what we recommend looking for: 

1. Self-service returns portal 

The software should enable you to set up a self-service returns portal for your customers. This allows customers to initiate returns and exchanges independently based on specifications defined by your returns policy. It removes the need for customers to reach out to customer support teams to submit product return requests.  

2. Automated workflows 

A good returns system should help your business automate the majority of the returns process. This includes categorizing requests based on return reasons, approvals/ rejections, shipping label generation, inventory updates, issuing refunds, or triggering exchanges. 

3. Seamless integrations 

The returns management software needs to share customer and product data in real time to bring efficiency into the process. This is why it is important that it integrates seamlessly with e-commerce platforms, third-party logistics (3PL) service providers like ClickPost and AfterShip, CRM, and other solutions. 

4. Customizable returns policies 

The returns system should enable you to set up custom return policies. This includes setting up return and exchange windows, return restrictions with variables like product tags, discount codes, and sale periods, and managing non-delivered and out-of-stock orders. The customization helps offer a consistent returns experience across all products and orders. 

5. Revenue retention capabilities 

A good returns management software also gives you the ability to retain customers who have requested returns. This includes offering targeted incentives to guide customers towards exchanges, a fixed amount or a percentage discount of the cart value, issuing store credits, and upselling complementary products based on their preferences. 

6. Analytics and reporting 

The software should also be able to give you visibility into return trends, reasons, and operational efficiency to help reduce future requests. It should make it easy to derive actionables that can help improve your products and services. 

7. Fraud prevention 

With an increase in online purchases, fraud is becoming common too. A good returns system helps identify patterns in frequent or fraudulent return requests and sets limits where necessary. This helps reduce the risk of losing revenue to fraud returns. 

8. Easy scalability 

If your business plan includes scaling the business to new regions or markets, it’s wise to choose one that can handle increased return volumes. 

9. Pricing 

Look for a returns management software that offers pricing plans based on your business needs. This could include the number of sales or return requests you receive per month. We recommend checking for upfront, setup, ongoing, and transaction fees. 

10. Support and success 

Seek a solution that offers proactive customer support as you set up a returns process. They should equip you with resources like how-to guides, tutorials, demos, and more to set up and continually optimize the returns process. We also recommend probing their success efforts to see if you can get assistance to optimize the process as you go. 

Conclusion 

Managing returns is one of the necessary evils of running an online business. 

While we do agree that your focus may be on marketing tools to reach and engage your audience more proactively, it’s important to also secure your current sales. 

According to Forbes, the rate of online returns is now officially growing faster than the rate of e-commerce sales overall. As per the National Retail Federation, the total cost of online returns today represents more than $212 billion. 

So whether you’re starting an online business or scaling one, having the right returns management software can protect your revenue. 

Want to know more about the returns system trusted by leading brands on Shopify? Book a demo of Return Prime today.