Restocking fees – can they be good? Webinar explores ways to handle reverse logistics

HIGH POINT – With the growth of online shopping and heightened customer expectations, costs of reverse logistics – a term used to describe the return process – are soaring.

A recent webinar from the Home Furnishings Assn. delved into some of the issues being faced by furniture retailers and offered a few tips on how these issues can be better handled.

Here are four takeaways:

  1. Consider restocking fees
    When retailers are coming up with a return policy, they should try to limit returns due to buyer’s remorse. Arindam Basu, management consultant at Thousand Mile Partners and former director of logistics for Jerome’s Furniture, said restocking fees are an option to mitigate, though admitted they can be risky as they can be a tipping point in the decision to buy.
    “Some European retailers have started charging nominal fees for returns,” he said. “They’re not trying to recoup their money because what they’re charging is insignificant when looking at the total reverse logistics process. It’s an attempt to change consumer behavior.”
    Arindam said he is in favor of stocking fees, at least until the customer is ready to walk away. Make it waivable if it’s a point of contention, he said.
    Bryan Lysaght, CEO of Service Technologies, is in favor of restocking fees. “Maybe make the fee tiered,” he said. “If it’s within five days, make the fee less. The faster you get something back, the faster you can resell it. Maybe start with a 10% restocking fee and use your best judgment on whether to waive it.”
  2. Train delivery drivers in handling unhappy customers
    “If there is a damage or stain on the furniture item, and the customer says they don’t want it, how can we train the driver to keep the item in the customer’s home?” said Lasaght. “How can we improve the skillset in communication with the customer? Can we get it repaired or fixed in the home? I’ve seen things come back because it didn’t have a pull handle attached by accident when it was assembled.
    “Number one: you have to have people skills. You have to be able to de-escalate. Give them the power and the training. They don’t have to repair something on the spot. If the damage is minor, for example, the driver can assess that. If a driver simply puts a customer at ease, say things like ‘I don’t think we have more of these in stock’, if the driver knows that, or if it’s true, say ‘you’d have to wait for a new one’, anything to keep it in home. We’re not trying to trick the customer, but if it’s a simple fix, try to keep it in the home. Stock the driver with simple, common parts that may be needed. If they have right technology, all of this can be done standing right there in the customer’s home.”
  3. Communicate with the customer from the get-go
    Retailers should make sure a delivery can be executed before that customer makes a purchase. Can the item fit in the door of where the customer lives? Can it fit up the stairs? This conversation should happen between the sales rep and the buyer, Basu said.
    “We were working with one supplier,” he said. “They had a marble tabletop that could not be delivered to this customer because it was too heavy. So they had to go back to the design phase, and go underneath the table top and take a chunk of marble out in the manufacturing process. The look and feel of the table was the same but the weight was much more manageable.
    “These factors should be considered in every area of the organization.”
  4. Recoup any cost you can
    It’s important to have reselling procedures in place before the item is sold. Clearance centers and stores dedicated to returns are good, if possible. Have dedicated return teams.
    “Was a return due to customer preference or a manufacturing issue?” said Basu. “Can we get a vendor credit? Incentivize the return team to categorize the return.”
    “If it was damaged by a third-party delivery team, can we recoup that cost?” said Lasaght.

See the full webinar here.

See also:

Credit to Source link

Leave a Comment