Magazine Article | November 15, 2007

Manage Your Customer's Returns

Source: Innovative Retail Technologies

A direct marketer increases customer convenience and manages staffing concerns by implementing a returns management solution.

Integrated Solutions For Retailers, December 2007

For whatever reason, your customer wants to return a product. As a retailer, you're at a critical juncture. This is your opportunity to 'make good' with the customer. It's obvious that some form of customer dissatisfaction has occurred; otherwise, they wouldn't return the product. Oftentimes, providing your customers with a streamlined returns management system makes it a bittersweet experience.

Cabela's, Inc. is a direct marketer and specialty retailer of hunting, fishing, camping, and related outdoor merchandise. The company conducted a market survey to find out what consumers believe to be key factors when deciding which catalog or online store to purchase outdoor merchandise from. The results pointed clearly to a better way of managing returns.

Cabela's returns process left just about everything up to the customer. "We simply provided a pre-addressed shipping label on our packing slip to ensure that the package was routed to the correct returns facility," says Tim McAreavey, director of logistics at Cabela's. The customer was responsible for selecting the carrier, getting the package to the carrier, and paying the carrier.

Tracking a returned package was also a hassle, and any tracking capability at all was dependent on which carrier the customer selected. In any event, Cabela's had no visibility at all into the progress of a returned item. The company could only provide a 'status update' if the package had already been received at its facility. This lack of visibility caused two distinct problems for the direct marketer. First, customers were frustrated. Second, Cabela's could not accurately assess the volume of inbound return shipments and properly plan its labor needs.

Offer A Prepaid Returns Solution
The company's first goal in selecting a returns solution was to improve service for catalog and Internet customers by providing them with a simple, economical way to ship their return packages. Next, it wanted to improve the visibility of those return shipments. Lastly, it needed a solution that could accommodate the company's wide range of products (from small fishing lures to ATV accessories) to prevent having to manage several different return methods. The company had been using UPS to handle the majority of its deliveries, so it turned to UPS for returns as well.

The UPS solution simplified the returns process for Cabela's customers. Now when Cabela's sends out a package, a prepaid UPS returns label goes with it. If the customer needs to return the package, they simply stick the UPS label on the box and drop it off at a UPS facility or drop box.

The ability to track a UPS package was a major factor in choosing the solution, but it works a little differently from what you might be accustomed to. "We wanted to maintain interaction with our customers, so  the UPS tracking information comes directly to us," says McAreavey. Cabela's elected to have the tracking information sent to the company, rather than the customer, so it could communicate update information to its customers and enforce a more positive service experience. "We provide updates, such as when a package arrives at Cabela's, how long it will take to process, and when the customer should expect their refund."

The UPS returns management program offers more than convenience for Cabela's customers. "Based on analysis using average zone distribution and average packing weight, we estimate that our customers are saving an average of $2 to $3 on each return by using the prepaid, flat rate return label," says McAreavey.

Cabela's benefits from using the UPS solution as a tool for forecasting and planning labor needs. "As a greater percentage of returns are coming back to Cabela's via UPS, we have gained much better visibility into the workload at our facilities each day," says McAreavey. "The solution enables us to be better staffed by more effectively planning our workloads and shifts."

According to Cabela's, the solution paid for itself in less than one year, and the qualitative customer service impact was immediate. "The solution provides a competitive,  ease-of-shopping advantage to Cabela's in the catalog and Internet channels," says McAreavey. "Our customers experience greater convenience, are offered more information about the status of their returns, and receive shipping cost savings versus our old returns process."

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