Online returns can be both expensive and complicated for merchants and consumers. Innovations can help increase consumer confidence and also help grow the market.
By DHL eCommerce executives Peter Schulz-Rittich, Vice President, Domestic Delivery, DHL eCommerce and Carsten Lützenkirchen, Senior Vice President, Cross Border, DHL eCommerce.
It’s easy to feel safe when you hit the ‘buy’ button for local purchases. Most countries provide consumer protection laws that regulate domestic returns and refunds. In fact, the European Union makes it mandatory to refund a purchase sent back within 14 days. But international orders, in countries outside the EU, are often much more complex and expensive to manage.
When we launched our domestic delivery service in Chile at the beginning of the year, we offered a basic returns service right from the start. In Chile, 76% of online shoppers are demanding reverse logistics which is currently not offered in the market.
Because our returns service offers competitive rates, and the same quality service as our forward delivery, the response has been excellent.
Introducing a rigorous returns solution proved to be a strong selling point too, and it has given us a competitive advantage. Demand from merchants is so high, we’re already in the process of further improving and automating it.
Customers understand they need to offer consumers a number of different options to increase their online sales.
It’s a great example of how effective returns really can make online sales grow. Offering a high-quality service has also helped build customers’ trust in online sales, particularly in emerging markets.
Take Vietnam for example. E-commerce’s share of the retail market there is still less than 1%. So, customers understand they need to offer consumers a number of different options to increase their online sales.
Cross-border goes local
Accepting returns locally, even for international orders, is the secret ingredient in the recipe for a better experience. Domestic shipping reduces transaction costs, and it also gives consumers a sense of familiarity.
We consolidate returned items in a local warehouse before moving them back to the country of origin using a cost-effective solution. This makes it cheaper to send back returns than individual international shipping.
Further costs can be saved in the “first mile” of returns, such as integrating pickups into couriers’ rounds with optimized delivery routes. In Thailand, Malaysia and Vietnam, we’re building networks of DHL ServicePoints which will accept returns in the near future. Many consumers prefer to have someone pick up their shipment, but others want the choice of dropping it off at an outlet.
For people who don’t like printing out return labels, or spending the day at home waiting for someone to pick up their package, there are other solutions available too, such as specific pick-up time windows and label-free returns.
These labels can be created by couriers or employees at service points, or a code can be generated electronically, pushed to customers’ phones and scanned by a courier, just like mobile boarding passes for air travel. These are all solutions DHL eCommerce is already working on.
The higher the value of the shipment itself, the more important it is for the merchant to have access to attractive return delivery times.
It’s also important to consider that many sellers want to have their high-value products returned quickly for fast resale. This calls for expedited shipping. The higher the value of the shipment itself, the more important it is for the merchant to have access to attractive return delivery times. Time has an impact on cash flow after all.
Getting duty and taxes back for a cross-border shipment is another issue to consider. It’s hard to do, and the cost of applying for it is high. But that’s something else we’re focusing on creating an affordable solution for.
Returns are an unavoidable part of e-commerce. We’ve learned to use the process to our advantage, and ensure any return, is a happy one for our customers.
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