How to Choose the Right Returns Software for Your eCommerce Business

Updated: April 10, 2024

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Published: April 10, 2024

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8 mins read

Your tech stack is integral to every aspect of your business, from marketing to post-purchase and everything in between. Choosing the right solutions has a tremendous impact on your operations and customer experience, which are vital to your eCommerce store’s success. And one area where it's important to choose wisely is your returns management platform.

Returns are a headache from a revenue, management, and logistics perspective, costing eCommerce companies lost hours, strained customer service teams, and nearly 18% of total sales. The right returns management software can help alleviate those challenges, but with so many options available—there are more than 90 different options in the Shopify App Store alone—how do you choose the best solution?

The guide will highlight the top factors for finding the best return management software, so you can choose a comprehensive solution that will lead to a positive impact on your business. 

Where should you start when evaluating eCommerce returns software?

Start with your business goals. Do you want to reduce your rate of returns? Transform more returns into exchanges? Or reduce manual time spent on returns? Before you dive into features and functionality, think about your—and your customers’—biggest pain points around returns, and what you need to solve them.

Consider your budget and scale of product returns

One of the biggest factors when evaluating software is obviously your budget. No matter your business size, you should look for a solution with flexible, transparent pricing that is easy to scale as needed.

When considering your budget, weigh the monthly or yearly costs against the potential return on investment (ROI). How much will you save on operational costs? How many customer service hours will you be able to reallocate? How much revenue will you be able to recapture? These are all important considerations when evaluating whether or not a solution fits within your budget. 

Take comfort shoe brand Aetrex, for example. Plagued with manual returns processes, they faced delays and communication issues, leaving customers dissatisfied. With each credit memo or return request, their eCommerce platform could not issue refunds automatically, requiring manual cross-checking of relevant inventory, item discount, and pricing information before restocking an item.

Aetrex leveraged AfterShip Returns to automate much of the returns process and boost customer satisfaction. This led to an 86% reduction in returns processing time and a savings of over 50% in operational costs. Plus, the customer experience team was able to spend less time processing returns, and more time training and enhancing service quality.

Try AfterShip’s Returns ROI Calculator to see the projected ROI for your business.  

AfterShip Returns ROI Calculator
AfterShip Returns ROI Calculator

Find a returns solution that integrates with the rest of your tech stack

The best tech stacks are ones where all the solutions work well together. From a business perspective, integrated solutions provide a better view into your customer data, and make it easier to build seamless customer journeys. For your customers, it allows you to get to know their preferences and behavior, so you can provide them with timely, relevant content at every touchpoint. 

For customer returns, it’s important to find software that works with your 3PL provider, your customer support tools, and your communication channels, so you can provide accurate status updates at every stage in the returns process. 

Think ahead to the future of your business as well. If you anticipate switching to a new eCommerce platform or other major solutions down the road, you want to use technology that integrates with several options or is platform-agnostic. And look for solutions with open APIs to make integrations and migrations less cumbersome. 

It’s also beneficial to consider providers that offer more than just a single solution. Often, you can get a better deal when you bundle multiple solutions from a single provider—like returns and order tracking—and the ease of integration and shared data is a huge bonus. 

Explore flexible returns options

Source: AfterShip eCommerce Returns Report
Source: AfterShip eCommerce Returns Report

Recent returns data from AfterShip shows that merchants who offer three or more return resolution options see more than 30% retained revenue. Look for a solution that allows you to offer the following:

  • Refunds to original payment
  • Exchanges for both the same item and different items 
  • Store credit
  • In-store returns, if applicable
  • Incentivized exchanges: Offering discounts or other perks for choosing an exchange over a return
  • Green returns: Refunding low-cost items or those that can’t be resold without requiring a return
  • Partial returns for bundles, if applicable

Flexible exchanges are one of the most important factors in retaining revenue from returns, as well as capturing additional revenue. In fact, we found that offering exchanges for anything in the store leads to an average of 12% in upsell revenue.

Before offering exchanges for other items, 75% of shoe brand Marc Nolan’s returns turned into refunds, with only 25% turning into an exchange. After, roughly 50% of their returns have become exchanges. Flexible exchanges and a self-service return portal helped the brand double their recaptured revenue.

Marc Nolan returns center

Save time and resources with returns automation

Manually processing returns is a drain on time, resources, and profits. A solution that automates tasks based on conditions like returns approval, marking returns as received, and issuing refunds can help reduce returns processing times by 31-100%

AfterShip auto-refund feature
AfterShip Returns auto-refund feature

This was certainly the case with deodorant brand Lume. By automating their returns process, the brand was able to get about six hours back every week, get refunds to customers seven days earlier, and boost their net promotor score (NPS) by 21%.

Capture the right returns data to gain actionable insights

Returns data is a treasure trove of information about how returns are impacting your business. Robust analytics can help you reduce your return rate, refine your returns strategy, improve product development, and promote a positive customer experience.

AfterShip Returns analytics dashboard
AfterShip Returns analytics dashboard

Here are some insights to look for that can help you improve your returns experience:

  • SKU level returns analytics: Identify key return reasons, including color, quality, and size.
  • Saved revenue: Learn how much revenue you are recapturing through your returns process.
  • New revenue: Gain valuable insights into how your product exchanges are leading to additional revenue.
  • Average resolution time: See how quickly your online store returns are being processed and what can be done to make the process much quicker.

Ideally, you want a mix of high-level analytics, like your overall return rate and refunds, as well as more granular metrics that will help you improve return workflows and inventory planning, measure your performance, and identify product issues and key gaps in your return process—all together in one comprehensive analytics dashboard.

Look for a returns solution with streamlined and integrated reverse logistics

There’s a lot more that goes into returns than a customer sending back an item. How do you determine whether an item can be resold? What do you do with it if it can’t? How do you manage restocking and excess inventory? 

AfterShip Returns routing rules
AfterShip Returns routing rules

Reverse logistics is an important part of supply chain and returns management, and your returns platform should make the entire process easier to manage. Your solution should be able to connect to warehouses for item grading and inventory management. You should also look for built-in routing rules to save on shipping costs and label-less or boxless returns for a better customer experience. And consider in-app reverse logistics to streamline your tech stack and reduce 3PL dependency. 

Recapture more revenue with the right returns software

With a comprehensive returns management solution, you can turn customer returns into new opportunities. When evaluating the best returns management software, consider a wide range of features and capabilities, but also ensure that you’ll be able to build an on-brand, frictionless returns experience. And work with a provider that will support you at every step—from migration to launch. 

Finally, make sure to ask what’s ahead on the product roadmap. A solution might be best-in-class now, but are they continuing to innovate? Will they be ahead of the curve in two years, or lagging behind their competitors? You’re dedicated to pushing your business forward—make sure your returns provider is, too.

AfterShip Returns helps merchants deliver positive returns and exchange experiences to improve customer loyalty and retention, optimize return costs, and retain more revenue. Book a demo today to learn more.

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