Reverse Logistics: How to Turn Returns into Profit

a man explaining the logistical process

It is common practice to focus on getting customers to buy more when businesses want to increase their sales. However, one of the most overlooked sales tactics that many companies forget are returns or reverse logistics.

While this is typically an afterthought for some businesses, it is very crucial for all customers. Consider the following guidelines to turn your reverse logistics into sales.

Make Sure you have a Return Merchandise Authorization Process

Industry specialist ReverseLogix notes that your RMA process should allow your customers easy and fuss-free returns. Consider investing in returns management software that will provide you various capabilities to make the entire process easier for your team and your clients.

Make your Return Policies as Clear as Possible

Having a clear and easily understandable return policy is crucial so that your customers know what to expect if they decide to return an item. In general, include the following:

  • Specific items that they cannot and can return
  • The specific time frame allowed for accepting returns
  • Return shipping fees, if any
  • How you can send refunds and in what forms – credit, cash, etc.
  • Specific steps for the return process
  • If you offer your products to international customers, make sure that you have clear policies regarding international returns.

Monitor All Returned Items

A vital part of effective reverse logistics includes regular tracking of commonly returned items and the reason for the return. You should likewise monitor the rate of returns for as a percentage of overall sales for every item.

A Word on Free Returns and Free Shipping Promo

Take note that some customers will only buy products to satisfy the minimum requirement for free shipping and then benefit from it to send back items they do not need or want since they already availed of free shipping.

Consider offering this option for pricier products to deter unscrupulous customers from taking advantage of this incentive.

Put simply, based on the rate of returns, how you manage your reverse logistics could help determine your business’ profitability or lack thereof. Check out your returns management process right now and see if you could incorporate the guidelines as mentioned earlier to help increase your margins and sales.