If you're a small- to medium-sized business, you could be forgiven for thinking that returns are a drag. Not only do they eat into your profits, but they're also a hassle to process.

Focused as you are on sales, sales, sales, the prospect of processing a return is never a cheery one. You've got to inspect the returned item and either place it back on the shelf for resale or put it aside for recycling. Now repeat that for every return you ever receive… not fun.

Yes – no matter how stellar your brand, returns are a dead cert. 2021 research by the National Retail Federation paints a bleak picture where $400 billion was lost by US retailers through returns, and there was an overall return rate of 10.6%.

If one in 10 of your sales is returned, you need robust reverse logistics – or returns management, as it's also known. This is the process whereby returns are handled – from the initial customer request for a refund to reincorporating the returned product into your inventory.

To put it simply – if you run an online store and someone isn't happy with the item they received, reverse logistics brings it back to your store.

The process looks something like this:

1. Your customer is dissatisfied and decides to return a product.

2. The customer drops off the item at a pickup point or local store, or posts it back to you using the returns label.

3. The item is reviewed at your warehouse. If it's in good enough nick to be resold, it's placed back in stock. If it's faulty, it's put aside for recycling or refurbing.

4. The customer is issued a refund.

No one wants to deal with returns – but given their inevitability, it's essential to have a watertight procedure in place to handle them. You want to manage returns in such a way that you don't alienate customers and ensure they're happy to shop with you again.

If your business is small- to medium-sized, this might seem like a big ask. In this article, we hope to show you that it's worth it.

How easy returns can help your brand

1. They boost customer trust

So much of running a business is about attractively presenting stock and making the customer journey satisfactory. It's easy to neglect returns as part of that journey. But it's just as important as the initial sale as a way of fostering trust between you and your customers.

What do customers want from returns? They want to know when they'll get their money back and if and when they'll be getting a replacement. If they're left in the dark about this, they may go off your store and shop elsewhere.

But if you update them and deal with their return ASAP, they're way more likely to come back for seconds. A return doesn't have to mean a lost customer.

2. They meet expectations

Retail giants like Amazon and fast fashion brands have raised the bar in terms of customer expectations. People are now accustomed to seamless shipping and returns when shopping online.

If you fail to meet these expectations, you're decreasing your chances of getting repeat custom. By contrast, giving your customers an easy, stress-free returns experience means they're more inclined to shop with you again.

3. They increase sustainability

A returns policy shows that you're committed to sustainability. You're making it known that you'll either resell the item or recycle it.

This is increasingly important as bigger brands embrace sustainability. Research has shown that 34% of consumers choose brands that have environmentally sustainable practices or values.

A transparent and user-friendly returns policy shows that your small- or medium-sized business has a major league commitment to sustainability.

4. They reduce return rates

This one might seem counterintuitive. But if part of your policy is to give people time to return their items, you increase the chance of them reconsidering. Rushing people into a return could have the opposite effect.

5. They help you gather consumer data

Issuing returns is a way to gather consumer data, which is essential to helping you grow as a business. You can do this by including a simple form asking why the item has been returned.

You can then collate and analyse this data, asking questions like "what are the most frequently returned items?" and "what are the reasons people give most often?"

This data can then help you to tweak and optimise your inventory and product descriptions.

Should I outsource my returns policy?

As we hope is clear by now, reverse logistics is essential and can help your brand – but it's complex and time-consuming.

Handling returns in-house isn't your only option. Third-party logistics (3PL) partners like Stowsafe will handle the whole process for you. We store your inventory in a 24,500-square-foot warehouse which is equipped to store a wide range of products – from perishables to clothing to luxury goods.

When a customer returns an item that we shipped on your behalf, it arrives back at our warehouse. We inspect it and process the refund. We then put the returned item back on the shelf ready to be picked, packed and dispatched again.

If the following apply to you, you may be ready to outsource your returns policy:

1. You're unable to manage the volume of returns you're getting.

2. You're struggling to restock, recycle and dispose of returns.

3. You don't have the budget to hire a dedicated team and install dedicated software.

At Stowsafe, we offer 100% bespoke fulfilment services for eCommerce brands. This includes handling returns in accordance with your brand's policy.

Returns are unavoidable, so having a robust returns policy in place is not only common sense, it's good for business.

We aim to take these routine tasks out of your hands so you can focus on growing your business. Check out our online fulfilment services and let us help you take your business to the next level.