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Remedying the Issues with Online Returns

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Remedying the Issues with Online Returns

Many of us shop online with the express expectation that the items we purchase will be easily returned if we’re not satisfied with them… But how many of us have considered what happens to those products after we ship them back to the retailer?

Brandon Dupsky is the co-founder and CEO of Back-Track, a company dedicated to helping online retailers recover the profits lost to surplus inventory and customer returns. He joins us today to talk about what he likes to call his “billion-dollar mission to save e-commerce” and how the company is working toward achieving that goal.

In episode 4, season 2 of The Deal Closers, Izach and Brandon discuss some common mistakes that sellers are making, the multiple steps Back-Track takes to ensure their clients can recover their losses, and what their cash flow process looks like. Listen and learn how Back-Track helps clients diagnose the flaws in their products that spur returns and why sellers need to spend way more time researching how to be competitive.

The Current State of Online Returns

Dupsky, in his more than two decades of experience in online retail, revealed that even now, there is a problem with online returns. It’s a staggering forty-billion-dollar problem for third-party sellers on Amazon, and it’s about a $400B problem for the supply chain and the entire ecommerce industry in the USA. Of products from third-party sellers, 60% shipped from overseas, including China, Australia, the UK, EU countries, and Canada.

The problem with online returns for third-party sellers is that they don’t have a place for the returns to go because all are sent to a US address. They are left with very few choices: 

  • Destroy it.
  • Send it back to a third-party logistics provider who doesn’t want to do the returns.
     

Dupsky’s company, Back-Track, solves these ecommerce returns for third-party sellers. Their solution is to provide a new approach and give them the option to sell the item so they can get their money back and improve their returns data.

Key Issues With Online Returns

The number one biggest mistake that Dupsky observed from his customers is overbuying.

  • Sellers made the wrong choice of stocking a product with too much competition and can’t sell it profitably.
     
  • They never bothered with quality checks, and they ended up with shady items.
     
  • The quality of the product is so poor that the return rate of their seller account increased to 30%. It needs to be reworked, relabeled, or sold on another ecommerce site because it’s hurting their account.
     
  • New sellers don’t invest enough time to learn about packaging. The packaging is so tight that the customer ends up with a damaged item. Most people don’t think about shipping costs. But according to Dupsky, if an item exceeds one pound, even by just a couple of ounces, the shipping rate paid by the seller could double. In other words, sellers could be wasting money if they don’t package their products efficiently.

Problems With Online Returns: How Back-Track Helps Solve Them

Back-Track has a tech team that specializes in understanding the product to detect online returns problems. Dupsky then presents the reasons why a seller is getting a high rate of return. Those issues are reported to the seller via the Back-Track platform.

Leveraging Technology to Streamline Returns

Through the power of the internet, Dupsky is able to show overseas sellers the defects of their products in real time through the Back-Track dashboard.

A good example is his client, who sells electronic alarm clocks. The problem is that these clocks like to go off randomly and on their own. Dupsky realized that it was a quality control problem and suspected that the sellers hadn’t noticed it until he pointed it out.

Ecommerce Return Problems: Back-Track’s Solutions

Dupsky, with profit recovery as the goal, introduces solutions for sellers to get their money back. In other words, he wants sellers to monetize their returns.

The procedure depends on the online returns problem. Among the things that his company does to solve various issues are the following:

  • Send the brand-new product back to Amazon if the package has never been opened.
     
  • Rebuild two packages and make them one.
     
  • Resell it on other platforms, including Back-Track’s own retail store.
     
  • Sell the parts. Take out the replacement parts. Back-Track has partnered with businesses that need spare parts (such as a bike manufacturer).

Sustainable Practices in Online Returns

One of the biggest issues caused by e-commerce is its negative environmental impact. With the high volume of returned goods, many sellers choose to simply dispose of them. This has become a growing problem, filling up landfills not only in the US but also overseas.

Fortunately, Dupsky’s business model doesn’t just benefit sellers; it’s also beneficial for sustainability. He looks for ways to extend the life of an unwanted item. It is part of what his business brings to the environment.

Reducing Return Rates Through Better Product Information

Sellers can reduce return rates by offering buyers clear insights into what they’re purchasing through detailed product descriptions. 

Make all the necessary details like size (to prevent wrong size returns), material, and color easily available so customers know exactly what to expect. By being upfront about the product’s specifications and features, the likelihood of dissatisfaction and returns significantly decreases as customers feel more confident in their choices. 

It pays to be honest, especially when there is minor damage to the item, as the right customer may still be willing to pay for those small dents and imperfections.

Balancing Customer Satisfaction and Business Profitability

Sellers can positively influence a seller’s purchase decisions through a convenient return policy. With a hassle-free returns policy, you can create a better customer experience, which can eventually drive loyalty to your Amazon store. 

On the other hand, the high cost of returns can hurt profits. Businesses should focus on reducing return rates by improving product descriptions and quality while incorporating clear return terms to manage costs without deterring potential buyers.

Strategies for Retailers to Improve the Return Process

  • Automate and streamline the entire return process with a returns management system (RMS), which gives you real-time status updates, automated return merchandise authorization (RMA), and customizable return procedures.
     
  • Analyze return patterns to understand customer behaviors, improve product descriptions and quality, and predict trends to optimize inventory management.
     
  • Connect RMS with inventory and logistics systems for end-to-end visibility and smoother returns management within the supply chain.
     
  • Enhance customer experience with AI. Use the power of machine learning to offer personalized return options based on customer purchase history.

The Future of Online Returns

As the use of online shopping platforms continues to increase, so will the cases of item returns. As a seller, you should not dread it each time it happens.

Instead, see it as an opportunity to solidify customer relationships and increase profits.

A hassle-free returns process, combined with incentives like discounts or extended return windows, encourages repeat purchases and strengthens brand reputation, turning returns into a growth driver. 

Combining it with the solution offered by Back-Track can mitigate the risks associated with returns.

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