The Impressive ROI of a Returns Management System

Out of every 100 eCommerce products sold, around 20-30 get returned, on average. Managing those returns efficiently – receiving, storing, inspecting, re-stocking or disposing – is a complex process. Especially if you have a large product line or deal with commonly-returned items like clothing and accessories.

A good returns management system can reduce that complexity – but as with any technology, it requires an investment. That investment requires buy-in from your organization’s leadership, but quantifying the benefits of the software presents its own challenge. After all, an RMS doesn’t directly generate revenue; its benefits lean more toward time savings and customer experience.

But there are important metrics you can use to get leadership on board. Here are a few things to consider:

Productivity and Employee Time Spent on Returns

Statista reported the cost of retail returns in the U.S. for 2022 hit an eye-watering $817 billion. One of the biggest contributors to that number: bracketing, the practice of buying several products with the intention to return some of them. For example, a customer buying apparel online can’t try it on before purchase, so they order multiple sizes and return the ones that don’t fit.

Online retailers who want to remain competitive have adopted generous return policies to keep up with these consumer expectations, at the expense of employee time spent processing all of those returned items. Depending on the product line, returns don’t simply go back into inventory – they need to be inspected, scored based on condition (both of the product and its packaging) and restocked, donated or disposed of. 

If you’re a 3PL with many customers contracting with you to process their fulfillment and returns, things get even more complicated. Each retailer has their own rules for handling and inspecting items, and managing those different rules without the right tech backbone feels all but impossible.

That’s why one of the biggest benefits of an RMS is automating the returns process. Using tools like 2D scanners, you can direct returns to the right place for processing, inspection and disposal, with a minimum of employee touchpoints. The RMS also offers fully guided workflows to cut down on confusion over what to do with each individual product. This dramatically reduces the time your team spends handling returns, increasing efficiency and freeing up employees to focus on other tasks.

Customer Experience and Brand Loyalty

According to Statista, 87% of consumers in 2022 said free returns were important when making their online shopping decision. Among the frustrations that turned customers off during the returns process were inconvenient return processes, lack of return tracking and long refund wait times. 

With the online retail space getting more competitive all the time, every negative customer experience represents a risk to a retailer’s business. If you’re using an inefficient returns management system, the likelihood of frustrating customers goes way up.

This is where the convenience of an RMS really shines. By cutting down the time you have to spend on each return, you can report quickly to your retail customers, who can process speedy refunds or exchanges for their end consumers. All of this adds up to happier consumers, improved brand loyalty for your retail partners, and ultimately a less stressful relationship between your 3PL and your customers.

The impressive roi of a returns management system

Employee Time + Customer Loyalty = Strong ROI

All of that’s great, your leadership may tell you, but what’s the actual bottom line?

The answer is multi-faceted. First, by improving productivity and reducing the amount of time employees spend on repetitive, manual returns tasks, you cut down on wasted hours – which translate to wages paid for “empty” hours. Improving the return process also eases stress on workers, who can focus on getting their other tasks done. This can improve employee satisfaction and reduce expensive turnover.

Second, your cost of gaining new customers drops every time an existing customer makes a repeat purchase. When every part of the shopping experience (including returns) is positive, that customer is far more likely to give you their business again. Automating returns using an RMS, you can give your retail customers and their end consumers access to tracking information and reduce the time between a return request and refund processing. 

By delighting customers this way, you not only encourage them back for repeat sales. You also encourage them to leave positive reviews and spread the word about your retail partner – making the returns process an important part of the retailer’s sales strategy.

Ready to see all the ways an RMS delivers a robust ROI for your 3PL? Get in touch today.

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