Customer returns can often be time and cost-intensive, since you’ll have to process a refund and restock the product once you’ve received it. Further, getting the product back isn’t always so simple, requiring numerous contacts by phone or e-mail. This is a part of the business of selling on line that needs to function extremely well to insure customer satisfaction. On average, about ten percent of all products sold on line are returned for myriad reasons.

Planning for this piece of the business to run smoothly should be a very important piece of your business plan. Make sure a key element of your company’s website is a clear Return Policy so customers are aware of your willingness to handle their return in a business like manner. This will reduce the number of phone calls on your end, decrease customer anxiety, and help your customers feel more confident about making that all important first purchase.

There are a number of proactive options for handling returns today. One popular way for small businesses is to provide customers with return labels in the merchandise package that can be used to ship the package back. Another is to allow customers to print their own labels. Most major shipping companies such as the U.S. Postal Service, FedEx, Roadway and UPS offer these services to their business customer base, providing technology and services for the online e-tailer to make the process of handling returns nearly painless. Your customers can easily print return labels straight from their own PCs and have the product scheduled for pick up.

The U.S. Postal Service introduced the first service of this kind when they launched Returns@ease in November of 1999, which is still in use today. The USPS system allows customers who want to return an item to print return labels via the web so they could return the packages by mail. There’s a minimum charge to merchants of about 30 cents per return, plus postage and any fees for special services such as shipping insurance and delivery confirmation.

The USPS service is free to your customers and doesn’t require them to own a PC or additional hardware or software, which makes it particularly attractive to businesses with volumes of deliveries going to segments of the market that may not yet be web enabled. To use Returns@ease, you must first obtain a Merchandise Return Permit from the USPS and set up an account at your local post office. The registration application, programming codes and applicable guidelines for using the service can be found online at USPSPriorityMail.com.

United Parcel Service also has an e-Returns Service that provides consumers with a label they can print from their PCs. But the UPS system has additional functions. For example, if your customer returns a product because it doesn’t meet expectations, the UPS system can ship it back to you for restocking. However, if the product is returned because your customer indicates it was damaged, the system knows immediately to route the package to the manufacturer, rather than to you. This eliminates the need for you to make an additional shipment to return it under warranty..

One of the ways the UPS system has gone that extra step to please the customer is to provide the ability to track packages during shipment. In fact, you and your customers can keep track of the status of those packages directly from your web site or via the UPS website, depending on which option you select for your business. Depending on how you establish your return policy, you’ll be charged a transaction fee and various transportation charges, which are billed either to you, or your customer, after you receive the returned package.

FEDEX also has an automated web solution called FedEx Return Manager, an automated system that enables you to transmit a return shipping label to your customers via e-mail, or electronically dispatch a driver for shipment pickup at your customer’s location on the same or next business day. FedEx will even provide a return label and a receipt for your customers at the time of pickup. It’s very simple for you and your customers, and allows you to check the status of the shipment as it’s being returned to you.

Returns Management Solutions Companies

Many e-tail entrepreneurs elect not to handle the return process themselves, but rather, use the services of Returns Management Solutions (RMS) companies. RMS organizations, like Roadway, handle all aspects of returns management for you, including shipping labels and return authorizations that contain vital information about why customers are returning the products. Some of the companies in this growing field also handle the physical handling and disposition of those returns. They may even have returns facilities, where employees scan, open, verify and assess the condition of the returned products.

Many of these returns management solutions companies can integrate their systems with yours, so your order management, credit processing, shipping, returns authorization generation and customer service systems are all interconnected. This greatly reduces the time demands on you, and allows you to track the status and condition of returned products. Further, each returned item can easily be routed to the locations you designate.

Some of the more full-featured companies also allow your customers to return products to USPS offices or other carriers’ offices, where they’re shipped back to you. These systems can also give your customers instant credit for returns. But, all this comes at a price. RMS companies usually charge system integration and installation fee starting at around $10,000. Then there’s an on-going transaction fee for each returned package ranging from 50 cents to four dollars, depending on the level of service offered and type products you sell.

The rapidly growing e-tail industry has created another need for multi-channel RMS companies such as Escalate. This returns solution manages the entire returns process for items bought through an on line business, even if the item is returned to a store. The Returns solution centralizes order and returns information so it can be accessed from any location. The solution speeds returned items to inventory, reduces fraud rates and improves customer service. While the cost of implementing an RMS system may seem pricey when starting and operating your small business, consider the benefits that may accrue to your e-tail operation. There may be dramatic offsetting savings for you from not having to employ labor and warehousing to handle this process yourself. These systems also reduce or eliminate unauthorized product returns, all of which cost you money. You also become much more responsive to your customers since the better companies provide customized web enabled information tracking tools that give you a real time view of your returns operation.

Regardless how you decide to handle the Customer Returns Processing piece of your business, don’t forget that satisfied customers are the only ones who will return to your website to shop in the future. And, you rely on the satisfaction of your customers for your livelihood. Whether you decide to process returns yourself, or hand the responsibility over to an outside firm, always be mindful of the importance of planning and monitoring the performance of this key element of your business.

Mention of the carriers and providers above should not be construed as my personal endorsement or recommendation of these providers as opposed to others. The examples given here are to help you begin to understand your options, and to inspire you to begin the due diligence process to determine the best provider and system to get you to your best solution.