How to Handle Holiday Returns Season + Essential Checklist

After the holiday shopping season comes the holiday returns season. If your business sold any holiday gifts over the past few months, then you should probably expect some people trying to return those gifts in the coming weeks.

It’s not necessarily a fun time for most business owners and their team members. But there are some things you can do to make it a bit easier. Here are some things to consider while you prepare for the barrage of post-holiday gift returners.

How Many Returns Should You Expect?

The amount of returns you’ll likely encounter depends entirely on the size of your business and the types of products you sell.

Generally, retailers can expect a 5 to 10 percent return rate on in-store purchases, with a higher return rate of 15 percent for online purchases. Things like clothing tend to be returned even more due to sizing issues.

How Should You Prepare for Returns Season?

The best thing that you can do to prepare for returns is to expect them. Knowing that you’ll get at least some returns, consider having some extra staff members scheduled after the holidays so that the rest of your store doesn’t get short-staffed.

You’ll also need to have a set process in place for returns, and make sure that all of your team members know how to handle them. If they’re always coming to you for help or waiting for another team member to complete the process, customers are likely to get frustrated. Try to make the whole thing as seamless and quick as possible.

Preparation Tips for the Holiday Returns Season:

• Expect Returns: Always be ready for a percentage of items to be returned post-holidays.
• Schedule Extra Staff: To manage increased footfall, ensure you have additional team members post-holidays.
• Streamline the Process: Implement a set return process that is both efficient and customer-friendly.
• Train Your Team: Make sure every team member is well-versed in handling returns.
• Stay Proactive: Reduce wait times by addressing concerns immediately, avoiding long queues and customer frustration.
• Emphasize Speed: The faster the return process, the more satisfied the customer.
• Communication is Key: Ensure your return policy is clearly communicated to avoid customer confusion.

The Impact on Cash Flow

With the onslaught of the holiday returns season, business owners should brace for the effect on their cash flow. When products fly off the shelves during the holiday sales season, it’s easy to forget that a percentage will come back as returns.

This reverse flow of goods and funds can cause disruptions in your financial forecasts. It’s advisable to set aside a reserve or have a flexible budget to accommodate these adjustments.

As always, regularly reviewing your financial status can help you remain agile and adaptive to the ebb and flow of the season.

What Should You Include in Your Returns Policy?

Having a set policy for returns is one way to make the whole process a lot easier. Make sure customers know if they need to bring a receipt or any other proof of purchase. Consider the quality of the item being returned and how soon after the purchase customers need to make the return (ideally leaving some room for those who just received gifts that were bought months ago).

For online retailers, you need to make the returns process even more clear. Tell shoppers how and where they should send their items and whether or not you’ll cover the return shipping and under what circumstances. You also need to consider if you’ll offer full refunds, store credit or exchanges.

How Should You Respond to Returns?

There are so many different circumstances under which people make returns. But regardless of the reason, you need to acknowledge their feelings and try to offer a satisfactory solution. Sometimes, especially when it comes to gifts, people just don’t like the item because it isn’t their taste. So don’t take returns personally.

Ask if there was anything wrong with the item or if they had another reason for making the return. Then try to rectify the situation or offer a refund or exchange, depending on your policy. If there was a mistake with the product or buying process, you may even benefit from offering an extra discount or gift to make up for the misstep.

What Are the Most Commonly Returned Items?

Clothing or accessories tend to be returned at a much higher rate than other types of products. If your business sells such items, you may see a return rate of 20 to 30 percent after the holidays.

How Can You Make the Most of Returns Season?

Returns season doesn’t have to mean doom and gloom for your business. Even though you may end up taking a financial hit on some of the returns or exchanges, you can do your best to make the most of this time.

The number one thing you should do is be friendly and try to handle returns in a way that makes your customers happy. If they are satisfied with the situation and your returns process, they may be more likely to shop with you again in the future.

You can also try to make the most of the increase in traffic by offering some specials or discounts to customers coming through the door or visiting your site. Not everyone who’s there to return something is necessarily going to take advantage, but you might benefit from a few impulse purchases.

Here are some more ways you can make the most of returns season:

• Personalized Customer Service: Train your staff to provide empathetic and personalized service during returns. A positive interaction can transform a return experience into a loyalty-building opportunity. Customers who feel heard and valued are more likely to have a favorable view of your business, increasing the chances of them returning for future purchases.
• Upselling and Cross-Selling: Use the returns process as an opportunity to introduce customers to other products that might suit their needs better. Train your staff to recognize opportunities for upselling or cross-selling by suggesting alternatives or complementary products, thereby potentially offsetting the impact of the return.
• Loyalty Programs and Incentives: Offer incentives for future purchases to customers making returns. This could be in the form of loyalty points, discount coupons for their next purchase, or access to exclusive deals. It’s an effective way to encourage customers to continue shopping with you even after a return.
• Gathering Feedback for Improvement: Use the returns process as a chance to gather feedback. Understanding why a product was returned can provide valuable insights into product performance, customer preferences, and potential areas for improvement. This feedback can be instrumental in reducing future return rates and enhancing product offerings.
• Streamlined and Efficient Return Process: Ensure that your returns process is as efficient and hassle-free as possible. A quick and easy return process improves customer satisfaction and leaves a positive impression. Consider implementing technology solutions like QR codes for faster processing or self-service return options for online purchases.

Technological Solutions for Efficient Returns

In today’s digital age, leveraging technology can streamline the returns process. Implementing modern Point of Sale (POS) systems or inventory management software not only accelerates returns but also provides invaluable data.

Digital tracking, especially for online returns, offers insights into customer behavior and potential areas of improvement in your product offerings. Investing in such systems can result in smoother operations and potentially reduced return rates in the long run.

Creating a Hassle-Free Returns Experience

A customer-friendly environment, both online and offline, can shape the narrative of the returns season. By designating specific counters or lanes for returns, you reduce wait times and enhance the customer experience.

For online businesses, a clear and quick portal for e-returns ensures customers aren’t deterred from future purchases due to a cumbersome return process.

Promotions to Counteract Returns Season

Transform the returns tide by rolling out post-holiday promotions. Consider offering exclusive deals or memberships to customers making returns, enticing them to redirect their refund or credit immediately.

It’s about creating an environment where, even if they didn’t find the perfect product the first time, they’re eager to explore other offerings, bridging the return with another potential sale.

Holiday Returns Season Checklist

Man with Boxes Photo via Shutterstock, Other Images: Tomohiro Ohtake, Muszkieterowie, Solomon203, Cumulus Clouds on Wikimedia

This article, "How to Handle Holiday Returns Season + Essential Checklist" was first published on Small Business Trends