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Retailer reviewing their customer returns and RMA process

The Customer Returns and RMA Process Defined

Having a clear return merchandise authorization (RMA) process isn’t just beneficial from an operational standpoint. It can also be a key business differentiator that makes customers feel more confident shopping with you—and more likely to come back for repeat purchases, even if they’ve had to return items.

For instance, consider that Narvar’s 2021 State of Returns: Finding What Fits report found that, “77% of first-time customers who had an ‘easy’ or ‘very easy’ returns experience said they would shop with that retailer again.” An integrated return solution can play a pivotal role in the development of an RMA process that maximizes your ability to resell items, recapture revenue, lower return costs, and provide a great customer experience. 

Here’s what a strong RMA process looks like in practice to help ensure you have each critical stage covered.

What does a strong RMA process look like?

Every company’s RMA process will look a little different. That said, a strong process includes defined workflows and policies for each of the following steps:

Step 1: The customer initiates the return

The first step in any RMA process is your customer making the decision to return a single item or multiple items. Return requests happen for many reasons: the items received may be defective, they may not be the right size, or they may not meet the customer’s expectations, among others. In fact, issues with fit, size, or color remain the #1 reason for returns amongst shoppers surveyed by Narvar

In any case, your RMA process should begin with a mechanism by which your customers can request a return. Common options include:

  • Emailing or calling customer support (though this risks overloading your company’s support staff)
  • Requiring users to submit a return request through an online returns portal (typically via an order or account lookup feature)
  • Mailing back returns using a pre-enclosed return slip (though, keep in mind that if you opt to include return labels in all outgoing shipments, it will be harder to track returns or capture information about the reasons for the return)

You’ll also need to think through the steps that will be taken internally to approve the return. For instance, you may require that returns be approved before customers send their item back, or you may opt to evaluate returns against a set of approval criteria once they’re received (or both). An integrated return solution can help your company establish advanced return rules for different products or customer segments. Not only can this limit improper return requests (e.g. for final sale items), it can provide important checks and standards that minimize fraudulent returns. 

Step 2: The customer prepares the return

Next, consider how your RMA process will support customers in preparing their returns to be delivered back to you. 

If your customers will be returning items in-store, preparation requirements may be minimal. If, however, your customers will need to provide packaging, return slips, or receipts to process their returns, make sure your return policy states this in clear language.  

Alternatively, if customers will be mailing items back to you, will they need to download return labels, print the labels, and/or package their items on their own? While this degree of manual effort was common just a few years ago, more modern return solutions enable time-saving printerless and boxless returns.

Step 3: The customer drops off the return

Again, the return methods you support will affect your customers’ next steps. Common options here include:

  • Dropping off returns in-store
  • Utilizing carrier drop-off or pick-up services via UPS, FedEx, USPS, and more
  • Allowing drop-offs through return location networks (Narvar’s Concierge network, for example, includes more than 200,000 carrier and retail locations)

Consider both speed and cost-effectiveness when determining which options to offer within your RMA process. Carrier drop-off and pick-up options may be convenient, but using a return location network can be cost effective for the carrier (and, ultimately, for your company).

Step 4: The return is routed to the appropriate location

Finally, once returned items have entered the return stream, where should they go? More specifically:

  • If a return is processed in-store, should the item be returned to the shelves or sent to another location?
  • Should a mailed return go to your nearest distribution center (DC) for processing?
  • Should it go to a warehouse before being recirculated back into inventory?
  • Should it be sent to a reseller or vendor?
  • Should it be sent for disposal or reclamation if the reason for return suggests the item is defective?

The capabilities of your return solution plays a role in answering these questions. With Narvar’s disposition engine, for example, you can use dynamic label generation to automatically route packages to the correct destination based on a customer’s stated reason for return. You can also set business rules that determine the end destination for returned inventory, based on the outcome of post-return quality inspections.

The impact of a strong RMA process in practice

As you build or refine your RMA process, keep in mind that well-defined RMA processes aren’t set in stone; they also allow companies to respond in a flexible manner to extraordinary circumstances. 

Take the example of Levi’s. At the start of the COVID-19 pandemic, Narvar worked with Levi’s to:

  • Seamlessly adapt Levi’s automated returns processes to support the company’s relaxation of return policies
  • Quickly re-route all returns to a single DC, adjusting load and volume to accommodate staffing and operations challenges brought on by the pandemic
  • Add printerless returns for consumer convenience—especially as many lost access to office or school printers (overall, Levi’s saw a 20% adoption of this return method)
  • Add online exchanges as a return option to help consumers get the right size, even as stores were closed

Not only did Levi’s see a 20% adoption of printerless returns—proving customer support for the method—the addition of online exchanges contributed to 30% of potential returns turning into exchanges. This allowed Levi’s to minimize potential revenue loss during the precarious early-pandemic period.

It’s important to get the RMA process right in order to offer the best experience for customers in a cost-effective manner. Considering the steps above will help ensure that your RMA process works hard for you. 

You may also be interested in learning more about, “What is an RMA: Meaning, Use Cases, and Best Practices.”



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