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Business Services Industry

Many Happy Returns

Entrepreneur, Jan, 2001 by Melissa Campanelli

You were thrilled by holiday sales--don't be chilled by post-holiday returns.

As surely as a busy holiday season brings an increase in Web sales, it also brings more returned merchandise. Unfortunately, returned merchandise is a major byproduct of increased Internet growth, especially as consumers become much more comfortable purchasing items over the Net.

"There will be more consumers returning goods purchased over the Internet during this Christmas season than ever before," explains Julie Breen, an e-commerce research analyst at The Boston Consulting Group. "That's simply because there are more goods than ever before being purchased over the Internet."

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Web shoppers return merchandise for a variety of reasons. Twenty-five percent of customers who have returned items purchased online say the product wasn't what they expected, according to e-BuyersGuide.com's 1999 "Return to Sender" Shoppers' Expressions survey. Seventeen percent of those who returned items purchased online said the items didn't fit correctly, and another 17 percent said the items were damaged. Sixteen percent of respondents said the wrong items were delivered, 15 percent said they simply didn't want the items, and 10 percent said items were of poor quality.

Not being able to see or touch a product in real life has often been cited as one of the Web's main shortcomings. However, that kind of problem may become less prominent in time, says Irwin Barkan, founder of e-BuyersGuide.com, an independent data services organization in Burlington, Massachusetts. "There's incredible technology at work in making touch, feel, color, look, size and fit issues more user-friendly," he says. "Some of the issues regarding these changes are [related to] the current bandwidth and speed available on consumers' computers. It may be a few years before the lines cross between this technology and consumers at home."

The good news: While returns are a problem for e-tailers, they're not a headache for customers. In the e-BuyersGuide.com survey, 78 percent of the consumers who returned items purchased online during 1999's holiday season described their experience with an e-tailer as "satisfactory" or "very satisfactory." The bad news: Of the 6 percent of shoppers who had "unsatisfactory" experiences, 62 percent said they wouldn't return to the e-tail sites responsible as a result. The biggest consumer complaint regarding online returns? Having to pay return postage.

Overall, 86 percent of the survey's respondents said they considered e-tailers' returns policies of significant importance. What features do users like in a returns policy? Receiving a refund as soon as the item is returned; being able to return the item to the e-tailer's brick-and-mortar store; receiving postal pickup at their homes; low or no restocking fees; and being able to exchange the item for something more suitable.

SIMPLE SOLUTIONS

How well you handle online returns will likely determine your future success--or failure--in the dotcom world.

There are a number of ways to handle returns, but one particularly popular way is to provide customers with return labels that can be placed on packages to be sent back to the fulfillment center or business. The U.S. Postal Service (USPS) was the first to offer a system to allow customers to print return labels straight from their own PCs. Called Returns@ease, it works like this: After customers alert you that they want to return items, you can provide them with merchandise return labels via the Web so they can return the packages by mail.

To use Returns@ease, you must obtain a merchandise return permit from the USPS and set up an account at a local post office. The registration application, programming codes and applicable guidelines for using the service can be found online at USPSPriorityMail.com. The service is free to customers and doesn't require additional hardware or software. Keep in mind, though, that there is a minimum charge to merchants of 30 cents per return, plus postage and any fees for special services such as shipping insurance and delivery confirmation.

UPS also has an e-returns service that provides consumers with a label they can print from their PCs. But the UPS system has additional functions. For example, "[If your customer returns a CD because] he changed his mind, the system can ship it back to the merchant for restocking," says Steve Holmes of UPS. "But if the CD was returned because it was defective, the system knows immediately to put the name and address of the manufacturer on the return label so it can be returned under warranty."

Once packages are shipped, you and your customers can keep track of the status of those packages directly from your Web site or via the UPS Web site (www.ups.com). Customers can hand return packages to any of UPS' 70,000 drivers, or--depending on your returns policy--UPS drivers can pick up the packages at consumers' homes.

Business Services Industry

Many Happy Returns

Entrepreneur, Jan, 2001 by Melissa Campanelli

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