An interesting discussion on E-commerce Product Returns ..

E-commerce product returns is a big pain for all e-commerce players. We know it has a negative impact on product margins. If not handled properly it can result in heavy bleeding for the companies. While assuring that products shipped to customers are of good quality, packed and delivered on time, due to reasons beyond the control of the organisation, products get returned by customers. Why do companies give liberal product return policies ? We know it is to attract more customers. But more often than not product returns are a big drain. 

To analyse this returns process, we had an interesting discussion in the classroom and found that more often than not, returns are not such frightening figures made out in the media. It is the poor ethics of the customers which we found surfaced many a time in the classroom. 

Click here for a caselet on the product returns process.

We did an Ishikawa analysis (cause and effect analysis) to find why customers generally return items. (click here)

Delay in delivery, poor fit, poor packaging and hence product damage were the most pressing reasons for product returns. 

While the e-commerce world in general had returns rate of about 30%, it was found from literature that Amazon had product returns of between 5 and 15 %. The returns rate for brick and mortar products were about 9% globally.

Unless the e-commerce players offered easy and fast item returns policy, customers were not ready to return to the website for more purchases. It lowered the customer risk of being bogged down with a wrong and useless product. 

Th discussions were of good quality and enabled the students get a good idea, understand the loopholes used by frequent defaulters to circumvent returns policies and how to increase customer satisfaction and customer returns to the website.

An organisation that can ensure free and fast product returns while at the same time ensuring low rates of forgery and cheating by customers through innovative ways can become a market leader in the long run.

The role played by the reviews and feedback section in prompting the customers for purchase was also discussed.