Unknown Speaker 0:00 Oh Darin Newbold 0:06 how many companies even have someone that's dedicated to return? Joshua Warren 0:10 Yeah, that's definitely rare. There's so many companies that it's just an afterthought of, well, we have to do this. So someone needs to take care of it. So sometimes lots of times it gets lumped in to the warehouse team, they're told, Hey, customers are gonna be sending this stuff back, figure out what we need to do with it. And that's not the best way to go about providing a positive customer experience. Darin Newbold 0:37 Good day, and welcome to Commerce today. My name is Darren Newbold, and I am joined, as always, by my wonderful sidekick, and co host here, Josh, to have a little conversation about what's going on in the world of commerce. But Josh, as I looked at this, our topic for today, the return wars, it got me thinking about a time a few years ago, well, okay, maybe it was, a lot of years ago, I'm a little bit day or two older than you are. But anyway, that aside, I was thinking about a story of realizing that when it comes to returns, I used to many, many years ago, I'd go to my closet, and I would find that I'd have, I have all these clothes that I never wore. And it was one of those where I didn't like shopping and shopping for clothes. And what I really realized is is it wasn't really the clothes, it was that I would get something home, and maybe it looked great, maybe even it fit right in the store. But by the time I got home, it didn't go right or didn't, didn't work out. And I didn't want to return it. And, you know, you're probably wanting to ask me, Well, dude, why'd you just return the thing? And I didn't want to? Well, why? Well, it was embarrassing. I felt, I don't know, I felt a little foolish. And usually they asked all these questions that I didn't want to answer. And I felt Half the time I might not necessarily be truthful about Oh, would you ever wear this? I don't, you know, I didn't anyway, and so I just didn't return it. And then out of all of this, today comes along Amazon. And I have no problem. Because Amazon has made it almost frictionless. I can practically take a package and throw it at a postal service person, and it'll get returned to Amazon. So with that all being said, the return wars. Talk to us. Yeah, man, that's, Joshua Warren 2:27 it's funny, as you're saying that I'm envisioning the old kind of dealers might have been Foley's, but the old that dates me already. The old POS systems they had that were like the ones connected to the mainframe, where it's like, very slowly, they're clicking you feel like you're almost in the DMV, and they're like reason for your return. Type in 02 did not fit and, and then even fast forward a little bit. You know, before Amazon made it so easy before consumers really started to expect to be able to return things I remember there for a while there was a pretty big business and industry around services that were trying to prevent returns that were I remember retailers in the mall, which again, kind of dates things where they would want always want to scan your driver's license before return. And it was almost like the old systems man were like commerce 100 years ago, ecommerce where the the old systems where if you wrote a check, and they would run your driver's license to see if it was okay to accept a check from you. There are services like that, that basically if their little system or algorithm decided that you weren't an okay person to return that product today, you just didn't get to return it. And so there's almost a fear of you're going to the retailer saying, you know, please, sir, please accept my return. And you're right now the expectations have definitely changed. And it's crazy. Darin Newbold 3:52 Will heaven forbid, you show up and you don't have a receipt? I mean, you might as well be a leper at that point. Joshua Warren 3:56 I mean, there's just nothing happened. And you're you're doomed, you know. And so now it's it's so different. There's actually some reports that came out a retail dive back in November 2022, about how 91% of ecommerce retailers are reporting that returns are growing faster than revenue. And then on average, 30% of online orders are now being returned. So, kind of these return wars are the frontline has shifted. And now whether they like it or not retailers are having to accept returns. That's just kind of the consumer expectation now, and they're having to figure out okay, how do we do this and, and at least stay in business, but ideally, continue to thrive? Darin Newbold 4:38 Will is there a way? Is there a way for these retailers to look at it even strategically in turn something that is potentially a negative? And obviously the first piece is turning it into a positive for a customer experience, but also how can it be? Is there a way to turn it into a positive for the business itself? Joshua Warren 4:56 Yeah, definitely. And that's really your right at Star With the customer experience of making sure like if someone's returning something, something went wrong in the sale, and whether it was something about your product, your business, or even just the consumers expectations not being quite in line with where they ought to have been, something went wrong, and you have an opportunity to make it right. And to really convert that customer into a customer for life, if you handle that return well. So I do think you're right, the very first step is just to make it not just a seamless experience, but make it a rewarding experience where they really enjoy the process as much as they can have returns. In our household, it's almost become a game with our kids of taking things back to the UPS store, and who's gonna go help that day. Because you're right, so many, several retailers. Now you don't have to print a label or anything, you just show a barcode on your phone at the UPS store. And that product is going back to the retailer. Darin Newbold 5:54 Yeah, making it seamless like that. And I'm sure there's AI places or places where AI can make that even better. What do you see is? Or are there some tools that merchants can use that that might make this easier or helpful for them? Joshua Warren 6:10 There are some tools out there that can help you as far as managing logistics, because that's all it really is, is you need to know, when are these products coming back? Why are they coming back? What's covered back that type of thing? And there's, there's definitely some solid service providers out there for that. I think the challenge, though, is deciding then once those products come back, what do you do with them. And I've noticed that Amazon and I know we, we keep using them as the example but they are kind of the the big name and big presence in E commerce, but they've got nowhere they don't even wait till they get the product back. I see a refund. The second that I've dropped it off the UPS stores and UPS is possession, I'm getting a refund. So they don't know if I even returned the right product. They're kind of just going on trust there. And that's a decision that each retailer has to make of when do you provide the refund? And how extensive Do you want to get in handling those return products. And I think it will vary from industry to industry product type to product type. But I think used to kind of going back to that adversarial approach I mentioned before that mall retailers should have there was almost this, you know, assume the customer is out to get you assume the customers, you know messing you over, we have to check, recheck, we're going to take everything apart, put it back together again, before we even think about accepting this return. I think a lot of retailers have realized now that that's a lot of cost, that's a lot of overhead to have your people doing that. And so kind of setting a a realistic and reasonable level of how much handling you even do on those returns can be really helpful. Darin Newbold 7:46 Well, it's interesting, thinking about kind of the quote unquote Omni commerce approach of brick and mortar as well as online and all the different ways to, to buy products and to get them. I had an experience this is recent of a I won't mention no company names, but it is a company that that makes a very high end and typically very, very good vacuum cleaner is one of the products that they that they make. And what I found interesting is is that while the product that I got there is nothing wrong with it. And it is fantastic. As I was looking at it, I was wondering, could I just return it and pay for an upgrade of an upgraded version, I got a great deal on the maybe the last year's model and I was like, Okay, well, maybe I do want to pay the extra money and get just the upgrade. What I found out is is that unless it was broken, they would not take it as a exchange whatsoever. And the fact that I bought it online, I could only return it online, I could not return it to a store. And if you bought it at a store, you can't return it online, it only has to go. I mean, it was just some really weird things. And I thought for they're very customer centric, and very focused. But there's a lot of rules around trying to get something as a return. And when you have a product that has multiple models, and you know, if you think of like Apple, Apple wants you, they want you to be in the latest and greatest. So they're gonna find they're going to create excuses, you haven't even thought of to buy the latest and greatest model. Whereas here I want to I want to spend more money with this company. Joshua Warren 9:22 And I can't. Yeah, and how many people are Have you told that story to? And how many people are you going to ever recommend that brand tonight? Well, Darin Newbold 9:29 the hundreds and hundreds and 1000s that are listening to this podcast, you're gonna hear all about it. But yeah, that's that's one of those cases. But back to our back to our return wars and stuff. Alright, what are the pitfalls? What are the challenges with this? Kind of looking at the strategic side with the companies and you know, what did they do with the returns? And do they ever get the returns back? Joshua Warren 9:50 We talked about that. Yeah, we're chatting about that earlier. And this is another case where owning the customer relationship and owning the The entire sale can make such a big difference. So if you're selling through Amazon and you're selling through Fulfillment by Amazon, you can end up in a situation where Amazon's going to accept that return no matter what, and so your products gonna be returned, Amazon's gonna deduct it out of your revenue, you have no choice. And so not only do you not have any control there, but then in a lot of cases, Amazon's actually going to charge you to ship the product back to you if you want to receive the returns back. So I know there's a lot a lot of brands selling on Amazon that just opt to not even receive those items back and that you know, up to 30% of online orders that are being returned of theirs. That's 100% Just a cost for them. And there's no opportunity to recover or resell that. And so that's where even going back to the other example you gave about the vacuum cleaner, like owning owning the sale, and owning the systems so that you can provide that seamless omni channel experience so that whether you bought it in store, bought it in law online, you can return it either way, that type of thing. That's just the new normal, that's just what people expect now. And that's what turns that, you know, potential 30% cost into an opportunity to recover the sale an opportunity to sell an upgraded model, and opportunity to at least get the product back and you know, sell it as a refurbished model or as a used model. Darin Newbold 11:21 Exactly. I mean, that's being able to recover some of that expense. That's, that's got to be key to all of this. Because one of the things that as we were, as we were looking at this topic and stuff, how many companies even have someone that's dedicated to returns that's focused on that that's their job is to work on and manage that? Do you find that as an issue? Yeah, that's Joshua Warren 11:43 definitely rare. Darin Newbold 11:44 There's so many companies that it's just an afterthought of, well, we have to do this, so someone needs to take care of it. And so sometimes, lots of times, they'll get just lumped in to the warehouse team, and they're told, Hey, customers are gonna be sending this stuff back, figure out what we need to do with it. And that's not the best way to go about providing a positive customer experience well, and then you end up, you end up with a situation where the CFO has to go down to the warehouse and is upset, because why are we taking all these returns? Why are we losing so much money and all of this stuff that's sitting in inventory, that we can't do anything with those kinds of things. So it does end up disconnected. So it's things that merchants need to be aware of, and be thinking about as they're exploring, especially as they're growing, and getting more and more products out there that returns are a real thing. And it's an expectation that we as consumers have now so you can, you can thank or you can hate Amazon and the other big companies that have really set the standard with this, but it is what is here to stay. Joshua Warren 12:46 That's the truth. And yeah, and it's so true that we've used Amazon as an example a lot today. But I think Apple is another solid example. And a good example of how you can build a reputation with your customers of accepting returns and of making it a positive experience. And you can use it to increase your sales. I know I, I've heard people talking about how, you know, they'll go out and they'll buy two of the latest Apple laptops, maybe two different colors, or more often two different levels of performance. And they'll try both for a week and figure out which one they really like better return the other. I think a lot of those people, if Apple didn't make it so easy to return what is a very costly in technical purchase, they probably just buy the less expensive model and try to make do with that. But they're able to convert some of those, those individuals into the more expensive model. And then they resell those models out there refurb their refurb store. So they're not really losing any money, because now they have a lower price point that a consumer that otherwise maybe couldn't afford or wouldn't buy an Apple laptop, they're buying that refurb. And they're maintaining the price point of the newer laptops. Darin Newbold 13:57 Yeah, it's a it's quite a quite an experience. And then one other little thing as you brought up apple and just realizing having some direct line experience with them, is using returns as that opportunity to surprise and delight. And that's that moment of a customer likely, in a return situation. Not always but but many times they're in a situation where they're not the happiest. They may not be in the best of places. And that's the opportunity to really make that difference. So well as we look at this and as we kind of wrap this package this all up and return it to our audience. Josh, anything else you'd like to add on the return wars Joshua Warren 14:42 and now I think with that awesome pond either there's no way I can top that Darin Newbold 14:46 so well as always, we thank you for tuning into commerce today. Thanks for brunch and we look forward to connecting with you next time. Transcribed by https://otter.ai