How To Handle Ecommerce Holiday Returns

You sell a bunch during the holidays. Then a bunch gets sent back.

It stings, doesn’t it? You don’t even have time to take down the lights before returns start showing up.

What do you do with all the returned merch? What about the overstock?

It’s a common supply chain problem for eCommerce, and it’s not talked about nearly enough. That’s why in this video, we’re going to talk about how you can handle eCommerce holiday returns. We’re going to talk about why it’s tough in the first place, then we’ll get into strategies you can use right now to alleviate the pressure. After that, we’ll talk about what you can do with any overstock you might have and how you can set yourself up for success for the next round of holidays.

My name is Brandon, here on behalf of Fulfillrite. If you need help shipping your orders, go to fulfillrite.com and request a quote. We’ve shipped for thousands of clients and we’re happy to help you ship your orders too. The quote doesn’t cost a thing, so if nothing else, you get some good information about pricing. Link in the description.

But enough self-promotion. Let’s talk about how you can handle post-holiday returns for your eCommerce store.

Let’s start with…

Why Post-Holiday Returns Hurt So Much

That stretch of time between Black Friday and Christmas is, consistently, the busiest time of year for most eCommerce store owners. Order volume is way up, as is traffic, and revenue.

But eCommerce items get returned all the time. I’ve seen figures as high as 30% in response to the question of “how many eCommerce orders get returned?” But don’t get too hung up on that figure – that’s actually a very hard question to answer.

What’s undeniable is that as soon as December 26 comes around, people start returning items for a bunch of reasons.

Some people don’t like their gifts. Or they’d simply prefer money. A lot of clothes, shoes, and accessories end up not fitting, and that also results in a return.

Then, of course, there’s impulse shopping. Holidays come with deals, discounts, and lots of last-minute shopping. But it also comes with buyer’s remorse for many too.

None of this reflects badly on you or your business. It’s just a quirk of the way our society shops and something you have to plan around.

So if you’re running your eCommerce shop, odds are, you just got done seeing a few days of negative revenue. Maybe you’ve had days where more orders came in than went out. That feels terrible, of course. Because there are shipping costs that you end up paying for returns. And you’re lucky if you can sell the product when it comes back in, because the packaging might be open or the product itself is damaged.

HUGE waste of resources, right? Then there’s the labor. It takes time to manage, sort, restock, and even dispose of returned merch. That means keeping extra staff around or having workers pulled away from their regular duties, neither of which are great.

So before we get into anything else, let’s talk about what you can do about the extra returns right now.

Strategies to Manage Returns

Efficiency is crucial when handling returns. Right now, no matter what your software stack or organizational structure looks like right now, you can do one thing for sure. Get in touch with customers and make the returns process clear.

Tell customers how they can return items and make it possible for them to print their own labels to ship items back. That way, you don’t have customer service staff dealing with issues that customers would prefer to handle on their own anyway. Plus, the good experience can help retain customers you might otherwise lose.

If you don’t have a dedicated team or person for returns right now, dedicate someone to it. That can help take pressure off you and allow someone to make day-to-day decisions that help keep the customer experience positive.

You may want to consider keeping your return policy flexible too. This can help enhance customer trust. Think about it: a customer is more likely to make a purchase if they know they have the safety net of a hassle-free return. Plus, a smooth return experience can, again, help retain customers. Be as accommodating as you can be without inviting abuse.

Now as for the merchandise itself, let’s talk about how you can…

Use Returned Merchandise

The influx of returned merchandise post-holidays can be a real hassle to deal with. But if you play your cards right, some of your returns might still be sellable. Here are four basic things you can do.

Reselling: Before relegating a returned item to the back of the warehouse, take a moment to assess its condition. If the product is in pristine shape, it’s prime for restocking. For items showing slight wear or minor issues, consider refurbishing. A small investment in fixing an item can make it sale-ready again, recouping potential losses.

Discounts & Sales: Everyone loves a good deal. If certain returned items aren’t suitable for regular restocking, but are still in a sellable condition, consider introducing them at a discounted price. This not only clears out your stock but also appeals to budget-conscious shoppers looking for quality products at a reduced rate.

Bundle Offers: Get creative with your marketing approach. Pair returned items with complementary products to create enticing bundle deals. For example, a returned handbag could be paired with a matching wallet. Offering both at a special bundle rate can increase the perceived value, making it an irresistible purchase for many.

Donations: Sometimes, despite your best efforts, there will be items that simply can’t find their way back into the sales cycle. Instead of considering them as complete losses, think about donating. It’s a nice thing to do, and that’s reason enough to do it on its own. But if you are looking for financial reprieve, the tax deductions sure don’t hurt. Remember to document donations accurately and consult with a tax professional to maximize benefits.

Now with returned merchandise coming back into stock, you might also be looking at your inventory in general. And those levels might be higher than you like. So here are some…

Tips on Dealing with Overstock

Too much stock sitting around isn’t good for business. Storage costs are high and you want to get it off your hands. So here are three things you can do to try to get rid of some of it:

Flash Sales: A reactive yet effective strategy for immediate stock reduction is to hold flash sales. These limited-time offers can create urgency among shoppers, prompting them to snap up deals quickly. By offering attractive discounts on overstocked items for a short period, you not only free up storage space but also give your revenue a quick boost.

Subscription Boxes or Mystery Boxes: Embrace the element of surprise! Bundling overstock items into subscription or mystery boxes can be an enticing proposition for shoppers. This approach allows you to move multiple products in one go, and the allure of getting a ‘deal’ often attracts customers. Ensure the bundled items offer value, and this method can help you reduce surplus inventory while delighting your customers.

Partner with Deal Sites: Collaborating with discount or deal websites can amplify your reach. These platforms have dedicated user bases looking for the best deals, making them a prime audience for your overstocked items. And who knows – you might even reach a whole new customer base because of your increased flexibility. 

Remember: overstock is an opportunity. You just have to remember to see it that way sometimes!

Now with that in mind, once you get through the initial pressure of dealing with returns and overstock, it would be smart to plan for your next holiday season, even if the next holiday on the calendar is Valentine’s!

Here’s what you can do to…

Prepare for the Next Holiday Season

You want to do this while this last holiday season is fresh on your mind. By the time Starbucks is selling pumpkin spice lattes again, you will have likely forgotten all the things that annoyed you this time around.

Here are six tips.

Collect Data: Start with the hard facts. Look at this season’s returns and figure out what caused them. Were there particular products that were frequently returned? Were sizing issues a common thread? Find the trends and you might be able to short circuit them before the next holidays.

Talk To Your Shoppers: Your customers are your best critics. Encourage them to share feedback on product quality, accuracy of descriptions, and sizing. Maybe the images weren’t clear enough, or the size chart was a bit off. They’ll help you see what you’re missing, and asking in the first place will build up your credibility with them.

Update Your Return Policy: While it’s fresh on your mind, revisit your return policy. Maybe it’s too restrictive and people find it annoying. Maybe it’s just not clear. Maybe it’s actually too lenient. No matter what, you need to aim for a balanced policy that is fair to both your business and your customers. Ensure it’s clearly communicated, leaving no room for ambiguity.

Train Your Team: A well-informed team is the backbone of smooth operations, especially during the frenzied holiday season. Ensure they are up-to-date with the return procedures and policies. Regular training sessions can equip them to address customer queries promptly and efficiently, fostering trust and enhancing the overall customer experience.

Try Return Management Software: These platforms help track, manage, and analyze returns, making the process smoother for both you and the customer. Having a dedicated team or person for returns can also make a difference. This ensures that returns are processed promptly and customers’ queries are addressed swiftly.

It’s like they say in every B-school ever: “what gets measured gets done.” Use software to help you with the measuring part.

Reduce Need For Returns: Ensure that product listings are accurate and comprehensive. High-quality images from multiple angles, detailed descriptions, and even customer reviews can provide a more complete picture of the product. This helps customers make informed decisions and sets realistic expectations, minimizing the chances of dissatisfaction and subsequent returns.

And there you have it! Even if you see a huge rush of returns after the holidays, there are plenty of strategies you can use to handle them. And even inventory that’s been sitting in the warehouse too long can provide an opportunity for you to make some revenue. We hope you can take these tips, ease off your post-holiday pressures, and prep confidently for the next holiday season!

My name is Brandon, here on behalf of Fulfillrite. If you need help shipping your orders, go to fulfillrite.com and request a quote. We’ve shipped for thousands of clients and we’re happy to help you ship your orders too. The quote doesn’t cost a thing, so if nothing else, you get some good information about pricing. Link in the description.

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