Improving Your Ecommerce Returns Automation Process Using AI
18 Oct 2023
4.5 min read
More online sales will inevitably lead to higher return rates as people try out products or send back unwanted Christmas gifts. If your business isn’t prepared, you could end up running into serious trouble around your returns processes.
This blog looks at the benefits of automating your entire returns process as well as a few examples of brands doing it right and some best practices.
Introduction to Returns Automation
Returns automation is a game-changer for ecommerce businesses, revolutionizing the way they handle returns and exchanges. By automating the returns process, businesses can reduce costs, increase efficiency, and improve customer satisfaction. In this guide, we will explore the benefits of returns automation, key features of returns automation systems, and how to implement returns automation for your ecommerce business.
What returns automation looks like
Even for fully ecommerce stores, a majority of customers (56%) believe it is the store’s responsibility to pay and arrange for return shipping. On top of that, more than half will check returns policies before placing an order.
So when a customer contacts your business to ask for a free return, what does that look like? It usually involves chatting to a customer service agent to arrange the shipping for returned items and issuing a refund. This can take hours, or even longer.
When you automate your ecommerce returns using a customer automation platform, you can create a workflow that makes processing returns easier.
For example, a customer gets in touch to return an item. In real-time, AI bots pick up the customer’s intent, check if their products are eligible for a return, update your CRM, CMS, courier and send the customer a prepaid return label. All this happens in a matter of minutes, without the need for human intervention (or human error).
Additionally, managing return requests through a dedicated Returns Automation dashboard ensures that these requests are received and processed efficiently.
Benefits of returns automation
The benefits of automating returns aren’t limited to “one less task to handle manually”. Several benefits ultimately help to boost your bottom line. An efficient returns process can enhance customer loyalty and satisfaction, leading to a higher customer lifetime value.
Better customer experience
Customer expectations are high, they expect to get a response from customer services within 10 minutes of contact. If they're waiting longer, customer satisfaction begins to fall.
Automating product returns within the appropriate return window helps to address their concerns immediately. When businesses make returns easy it creates a better customer experience, which means happier customers.
Better supply chain and inventory management
When it comes to managing reverse logistics, automation technologies help to streamline the process. It does this by being able to pull and input information from multiple sources and tools you use at instant speed and scale. A streamlined returns management process enhances customer satisfaction by providing transparency and timely updates.
DigitalGenius‘ own research found that customer service agents will use between 5 and 8 different systems or apps to resolve inbound queries, such as returns. Using so many systems can complicate supply chain and inventory management. Automation can handle it with ease — freeing up your agents to work on more complex tasks.
Easier to scale
Many small businesses start processing returns by hand. However, if you want your business to grow, manual handling of returns isn’t scalable or sustainable. Selecting a returns management system that aligns with your operational requirements and budget is crucial for scalability.
Returns automation helps to take the pressure off of you (and your employees), leaving everyone able to work on selling more products and otherwise building up your business.
Creates a competitive advantage
As we touched on earlier, your returns policy can be a conversion tool. This then creates a competitive advantage.
If your competitors are falling short on expectations, your business can use return automation to get ahead with a hassle-free return experience.
Key Features of Returns Automation Systems
Returns automation systems offer a range of features that can help streamline the returns process and improve customer satisfaction. Some key features to look for include:
Automatic Label Generation: This feature allows customers to receive a pre-paid return label instantly when they initiate a return request online. It simplifies the returns process and enhances customer satisfaction by providing a hassle-free experience.
Seamless Integrations: Returns automation systems should integrate with existing business software and service providers, such as warehouse management systems, helpdesk software, shipping carriers, and third-party logistics providers. These integrations ensure a smooth and efficient returns process.
Customizable Return Portal: A customizable return portal provides a self-service platform for customers to initiate a return request and track the status of their return. This feature empowers customers and reduces the workload on your customer service team.
Real-Time Tracking Updates: Returns automation systems should provide real-time tracking updates to keep customers informed of the status of their return. This transparency enhances customer satisfaction and builds trust.
Return Automation Rules: Return automation rules enable businesses to automate actions within the returns process based on criteria they define. This feature helps improve efficiency and reduces the risk of human error.
Examples of brands doing it right
Now you’re aware of what automating the returns process can be like and how it can benefit you, let’s take a look at brands that are successfully using automation. The return process involves various stages and challenges, and automating this process helps to enhance efficiency, minimize errors, and improve customer experience by providing timely updates and support throughout the return journey.
G-Star
Dutch clothing and accessories brand G-Star has worldwide popularity. G-Star also faced spikes in support ticket volumes, so they wanted to solve customer problems without hiring even more staff. In comes automation.
DigitalGenius helped G-Star identify cases related to order status, return status and return labels — all of which helped them achieve the following:
Automating the returns process and follow-up updates have allowed G-Star support staff freedom to work on driving more sales and revenue.
ASOS
ASOS, an online clothing store that is famous for its unlimited delivery model — which includes free returns. To return an item the customer needs to head to their website, decide the method of return, and fill in a returns form. The form includes product details and a return reason option.
From there the ASOS system will generate a QR code which the customer can either print off or show to the courier for them to scan.
This model of returns has allowed ASOS to be an industry leader and consistently achieve year-on-year profit.
SNIPES
Our final example is from SNIPES, one of the largest sneaker and streetwear retailers in Europe and the US. When SNIPES approaches DigitalGenius, it had the issue of not being able to respond to spikes in volume.
SNIPES also wanted to move away from repetitive issues (such as returns) so that its staff could focus on more complex cases. After taking on automation solutions, they saw the following results:
While it is impressive that the AI learned to automate 36% of German enquiries, what is even more useful for SNIPES is the 99% automation accuracy. This means that SNIPES can trust the automation to work without human intervention.
Returns automation best practices
Consider offering free returns. As standard, if you offer free returns, you’re likely to find customers are more comfortable shopping with you if they know returning is free.
Make your returns policy easily accessible. Along similar lines, your returns policy should be easy for customers to access and read. Your automation workflows can include a copy of the returns policy when a customer completes an order (saving them asking about it later).
Don’t make customers refer to third-party companies. Customers should be able to arrange their product returns with your business. Automating this conversation (and providing a return shipping label) is the easiest way for customers to make returns.
Offer convenient return methods. Customers like being able to choose their method of return — 44% prefer parcel drop-off, while 30% prefer home or work pickup. You can add a message in your automation flow to provide these options.
Following these best practices for returns ensures your business has the best chance of overcoming spikes in support ticket volume and post-holiday returns.
Measuring Success and Optimization
Measuring the success of returns automation is crucial to optimizing the process and improving customer satisfaction. Some key metrics to track include:
Return Rates: Track the number of returns as a percentage of total sales. This metric helps identify trends and areas for improvement in the returns process.
Return Reasons: Analyze the reasons for returns to identify areas for improvement. Understanding why customers return products can help you make necessary adjustments to reduce return rates.
Return Costs: Track the costs associated with returns, including shipping, handling, and restocking. Monitoring these costs can help you identify opportunities to reduce expenses and improve profitability.
Return Times: Measure the time it takes to process returns and issue refunds. Faster return processing times enhance customer satisfaction and build customer loyalty.
Customer Satisfaction: Track customer satisfaction with the returns process through surveys and feedback. This metric provides valuable insights into how well your returns process is meeting customer expectations.
Get ready for the peak returns season
As the holiday season gathers pace, ecommerce businesses need to be ready for when those shoppers decide to return items. If your brand is manually processing every return through a support agent, it will be easy to become overwhelmed and start seeing issues.
With the help of AI automation by DigitalGenius, you can build workflows that help deal with returns automatically. If the customer has a more complex issue, the AI also detects the need to route the query to an agent.
The Future of Returns Automation
The future of returns automation is exciting, with emerging technologies such as artificial intelligence and machine learning set to revolutionize the returns process. Some potential future developments include:
Predictive Analytics: Returns automation systems may use predictive analytics to identify potential returns and proactively offer solutions to customers. This can help reduce return rates and improve customer satisfaction.
Personalized Returns: Returns automation systems may use customer data to offer personalized returns options and improve the customer experience. Tailoring the returns process to individual customer preferences can enhance customer loyalty.
Automated Exchange Process: Returns automation systems may automate the exchange process, allowing customers to exchange items quickly and easily. This feature can improve efficiency and enhance the overall customer experience.
A Complete Guide to Returns Automation
Returns automation is a powerful tool for ecommerce businesses, offering a range of benefits including reduced costs, increased efficiency, and improved customer satisfaction. By understanding the key features of returns automation systems, measuring success and optimization, and looking to the future of returns automation, businesses can unlock the full potential of returns automation and improve their bottom line.
