5 Challenges And Solutions To Combat Returns In Return To Origin

Return to origin (RTO) refers to a phenomenon where shoppers cancel or reject orders at the doorstep which they placed as cash-on-delivery (COD). These cancelled or rejected orders are then sent back to the source origin causing the seller to,

Managing returns can be a complex and expensive process, especially in the case of high return to origin rates.

In this blog, we plan to discuss the challenges faced by Indian eCommerce businesses while managing high return to origin rates and the solutions that can help address these challenges.

Return to origin involves both forward logistics and reverse logistics costs. Where the former means the initial cost borne by a seller to ship an order to the customer, the latter means the cost incurred to return the same shipment to the seller. This results in additional shipping costs.

Solution – Efficient Logistics Strategies

The best way to reduce the add-on expense of reverse logistics is to implement efficient logistics strategies.

Consolidate return shipments to minimise costs and negotiate favourable shipping rates with logistics partners.

Managing returns resulting from RTO is an expensive process. It involves multiple stages, including shipping, quality checks, inventory management, and restocking. The costs associated with these processes can quickly add up, especially when the rate of returns is higher than usual. For smaller retailers, these costs can be exorbitant, making it difficult for them to manage high return rates and keep their profits intact.

Solution – Adopt Technology

Technology can significantly help solve this massive return to origin challenges. It can help automate and streamline the RTO process and even place interventions to minimise the risk of returns from the roots themselves.

For instance, online retailers can use GoKwik’s RTO Protection Suite to identify which shoppers are most likely to cause a return to origin. They can also study a shopper’s buying pattern and history, and place necessary interventions. These could include,

By leveraging RTO Protection Suite by GoKwik, online retailers can reduce the time and costs associated with RTO management and even improve overall customer experience.[youtube id="AZ8-QM_nRxs"]

Another challenge faced by the online retailers is the issue of fraudulent returns. Many times, shoppers make dishonest or deceptive returns to gain unauthorised benefits. For instance,

These cause financial loss to the eCommerce business.

Solution – Eliminate Fraudulent Returns With Effective Measures

To address the issue of fraudulent returns, eCommerce brands can take necessary measures to prevent and detect fraudulent activity. This includes using fraud detection software and implementing stricter guidelines for returns.

Online retailers can use GoKwik’s intelligence-backed RTO solution to identify fraudulent orders, block them from the source, and ensure no revenue loss.

To give you an example, in September 2022, Lenskart was witnessing a high conversion rate and an even higher RTO rate. This was unusual and the eyewear brand was certain of some mischievous activity. It then used GoKwik powered RTO Protection Suite to analyse the root cause and found that nearly 2000 per day were fraud orders. Using the AI-ML-backed RTO solution, it blocked these users causing RTOs and witnessing a growth in its overall profit margin.

By addressing fraudulent returns, online retailers can significantly reduce losses and improve the overall customer experience.

Items received under returns to origins can effectively create discrepancies in inventory levels. This further makes it challenging for online businesses to accurately track and manage their stock, and display items for sale on their storefronts.

Solution: Implement A Robust Inventory Management System

To manage this challenge, eCommerce brands must have effective and robust inventory management tools in their arsenal. However, it’s equally important to ensure that the tool provides,

Such automation can further help expedite the processing of returned items and ensure prompt inspection. This helps quickly separate damaged items from those in good condition and convert returned inventory into saleable products.

In the case of damaged products with minimal defects, online retailers can consider liquidation channels or partnerships with resellers to sell off the blocked/dead inventory and increase working capital.

The lack of standardised processes for return to origin management is also a major challenge for most eCommerce brands.

In India, there are no standardised guidelines for returns management. That’s primarily because of offering customers the ease of returns and keeping their trust intact. However, amidst the process, this is making it difficult for e-retailers to manage the return process efficiently and bear losses.

Solutions – Implement Standardised Processes

To manage returns efficiently, eCommerce companies need to implement a standardised process. This could include,