So much e-commerce effort goes into holiday sales prep, from the website and marketing through warehouse and fulfillment, that it can be easy to think the work is done once your orders are out the door. However, the surge in e-commerce during 2020 is likely to mean an associated increase in returns that can strain operations, teams and revenue. 

So, to help e-commerce brands prepare for this deluge of returns, and maybe minimize some of the hit to revenue, let’s look at five areas with a long holiday tail that are essential to growth.

Explain your process as simply as possible. Customer happiness can disappear quickly when a return or refund is hard to achieve. That occurs when things take too long, people can’t figure out your policies, or the process doesn’t happen as they expect. Any lack of clarity can cost you.

So, for the holiday (and regular) returns management, e-commerce companies should start with a clear, concise policy that is easy to find on your website. List out requirements in bullets and highlight elements such as deadlines for your customers. A smart practice is to pay for free return shipping to help keep customers happy.

Illustrate the returns process on your site to show the different steps someone needs to take, reducing their frustration and the burden on your customer service teams. Returns are a place for your crew to shine, so allow them to make it easy for customers.

You’ll want to do the same internally, too. A variety of factors impact the overall return rate. Sometimes, a product fails to meet a customer’s expectations due to design, size or color. Delays or damage during shipping lead to other returns. Mis-picks and improper fulfillment are yet another reason. Sometimes, during the holidays, friends or family just get it wrong and send a gift someone doesn’t like.

Ask customers why they’re returning goods and give your team a straightforward process to track these details both in customer service interactions and your warehouse. Keeping it simple will help product teams to know how to respond and avoid concerns in the future.

Set aside space for returns. One of the best things you can do to support returns management and avoid large spikes in labor, delays in processing and slowdowns to your replacements is to set aside physical space for the returns you’ll receive.

Treat it like an area you create for cross-docking or other advanced warehouse techniques. Create clear boundaries and policies, provide all the equipment that the team needs in a nearby location and perform safety checks to ensure there’s enough space for traffic. Depending on the size of your warehouse, consider creating lanes for these teams to put processed goods back on shelves quickly while avoiding traditional pickers.

It’s smart to train every fulfillment team member on these processes so you can scale based on the dynamics of orders and returns. If you’re working with a 3PL to survive the holiday, ask about their ability to scale and quickly process returns so you can utilize that inventory for your next round of orders.

Prep replacements and processes. E-commerce companies should understand which goods are commonly returned or replaced and get some of these units ready to ship when the January returns start arriving. Beyond clearing that space for returns, e-commerce companies can move around inventory to put these likely replacements closer to packing stations to keep order management smooth during the Q1 transition.

Once the holiday order rush is out the door and people have had a decent break, run through your processes for replacements and returns. Remind teams how to scan this inventory, check it and shelve it. If your order management and inventory software can account for goods as soon as they’re received and processed, help pickers and packers determine when inventory should be pulled off shelves versus your returns staging area.

Management should review audit processes and your best KPIs for understanding overall returns, inventory loss due to damage or inability to reuse items, and relevant revenue metrics. Watch for spikes in returns discussions on customer service channels or significant increases in traffic to the web page that explains your policy. Look for times when you might need to scale warehouse labor up to meet demand, as well as when you can start reducing shifts to control that cost. E-commerce remains a very dynamic experience throughout the start of the New Year, all based on holiday sales performance.

Give teams ways to shift the conversation. Your sales and support teams should learn the returns process to help explain it to customers. This is more than just a simple discussion on how things work because an understanding also helps them pivot to alternatives such as replacements, store credit or getting people to keep an item they received as a gift.

Explain the estimated time it takes for a replacement and how the process works — such as needing to verify a product’s condition before accepting the refund or shipping out a replacement — and provide alternatives for the customer. If your returns will take a few weeks because of a backlog, be upfront about this delay. Also, discuss what might be easier for them. Offer store credit immediately versus a payment return after returns processing might help them shift spending instead of killing your revenue.

Prioritize a positive experience for the customer to ensure that they stay a long-term shopper, even if a current holiday gift wasn’t their taste.

Review your partnerships. Santa keeps a naughty and nice list, and e-commerce companies might want to do the same for their holiday experiences. Review your partnerships, carrier choices, vendors and sales numbers, including what gets returned. These metrics will help you improve product and service offerings for 2021 to help you continue to ride the wave of e-commerce we expect.

Reward the teams and people who helped you best. Great customer support agents, fulfillment centers that come through at a critical time and people who help you avoid problems deserve our thanks. Take a second look at any partner that makes you think, “I hope that never happens again.”

Do the same for your processes and determine if there are functions you want to bring in-house or where your current team struggled. The holiday season can highlight bottlenecks and pain points within any organization or supply chain. At the end of Q1, you can start to consider operational changes designed to improve your capabilities year-round.

However, don’t forget to say “thanks” to the people and partners who made your holiday a successful one.

Jake Rheude is director of marketing for Red Stag Fulfillment.