After a long, hard holiday season, things finally start getting back to normal, right? Not exactly. There is still one major hurdle that some retailers neglect and it ends up costing them billions—how to process product returns.
According to a recent study by the National Retail Federation, holiday returns account for nearly $260.5 billion of all holiday sales last year.1 This accounts for nearly 8% of total sales, meaning major losses for retailers.2 Many of these loses are a result of retailers being unprepared for the massive wave of product returns a few days after the holidays.
Luckily, not all is lost. Many of these hurdles are related to customer services. If retailers focus take the time to coordinate their resources to better serve customers, then leaks in sales lost to product returns will slow to a manageable trickle.
Reinforce Communicate Policies
The key to effective management of returns during the holiday season is staff who are confident in their ability to enforce return policies. Some stores take a slim down approach in their policies during their holidays to simplify and smoothen the exchange with customers. This slimming of policies can range from stores allowing customers to make returns without receipts or original containers to extending the return dates by a few weeks.
While these policies were well intentioned, they’ve led to higher rates of fraudulent returns. The National Retail Federation found that 3.5% of holiday returns were fraudulent, with either stolen goods or items from other retailers.3
To avoid fraudulent returns, retailers should emphasize a thorough understanding and enforcement of return policies that enable stores to identify rightful returns. It’s common for retailers to change their policies to better service customers during the holidays. This makes it essential for district managers to work with store managers in ensuring that the most recent policies are being followed and enforced, giving staff members confidence in their servicing of customers.
Train Seasonal Staff for Post-Holiday Season Needs
Retail stores hire on a massive wave of seasonal staff to prepare for the hurdles of the holiday season. In fact, numbers by staffing firm Challenger, Gray & Christmas, Inc. show retailers hiring on an additional 738,800 staff members from October through December.4
Seasonal staff are an invaluable resource in retail, because they can be trained to perform essential roles. Before the holidays, retailers focus on training for offensive roles like cashiering, stocking, and manning the floor. After the holidays, stores should refocus their seasonal staff to play more defensive roles like pursuing sales and processing returns.
1. Train Staff in Sales Roles
Seeing a wave of returns after working diligently through the holiday season can be frustrating for store managers and their staff, but this is the wrong approach to what should be perceived as an opportunity. A customer returns a product to the store because they are unsatisfied with it. If a customer is returning a piece of clothing, it may be that the size is too small. If it’s an electronic device or a toy, it may be that the brand isn’t their favorite.
Julie Boston, Senior Manager of Customer Relations at Pier 1 Imports, has found many sales opportunities are lost when staff fail to apply targeted customer service at the start of a return.5 At Pier 1 Imports, Boston asks staff to engage customers in conversations to learn what it is they didn’t like about the product to see if there’s anything else that they can show them. This gives the store a chance to keep the sale while at the same time helping the customer find a product that they will enjoy.
2. Boost Staff in the Returns Process
Processing returns after the holiday season is an “all hands on deck” operation. Returned items will need to be inspected, counted, tagged, and priced before they can return to the shelves or warehouse. This become even more complex with the addition of products that are exclusively bought online, as retail stores need to create shelf space.
Some retailers have shipping and receiving staff that would normally handle this process. However, much of this staff is already tacked down to their day-to-day tasks. In the middle of the holiday season, the load of these day-to-day tasks only grows heavier. Relying on an already thinned-out shipping and receiving staff to process these returns may lead to a poorer job quality.
Instead of relying on shipping and receiving staff to handle returned items, stores can dedicate staff to alleviating some of these responsibilities, leaving only shipping and handling. Processing these returns in-store with seasonal staff will also help smoothen out the return process for warehousing teams, allowing them to save storage space and roll-out returns faster to their destinations.
The Holiday Finish Line
To finish the holiday season strong, retailers should focus on how to optimize their customer service for the hurdles of tomorrow. The role and priorities of seasonal staff should change to meet the massive wave of servicing and processing returns. From enforcing customer service policies on the front-end to handling returns in the back-end, retailers can maximize their revenue by changing to a defensive strategy.
Behind great customer service is a team of thousands who believe in a company vision. How do retail corporations keep their stores aligned with the company vision? By engaging in real-time conversations and strategic corporate initiatives with CoEFFICIENT® by Square Root. With CoEFFICIENT, communication between store and district managers is open to maximize store performance through collaboration. Learn more about how CoEFFICIENT can help your store this holiday season by visiting our Store Relationship Management page.
1. Kathy A. “Retailers Estimate Holiday Return Fraud Will Cost $2.2 Billion in 2015”. National Retail Federation. https://nrf.com/media/press-releases/retailers-estimate-holiday-return-fraud-will-cost-22-billion-2015 ↩
2. Ibid. ↩
3. Ibid. ↩
4. James P & Colleen B. “Challenger’s Seasonal Hiring Outlook 2016”. Challenger, Gray & Christmas, Inc. https://www.challengergray.com/press/press-releases/challengers-seasonal-hiring-outlook-2016-shift-front-office-behind-scenes ↩
5. Malcolm F. “How Retail Managers Can Overcome Post-Holiday Headaches”. Monster. http://www.monster.com/career-advice/article/post-holiday-retail-management ↩