20 Apr, 2022

How NetSuite helps with Product Returns?

A great number of businesses assume returns as a terrible process. But considering it as a key factor in customer experience can have better results.   

NetSuite provides comprehensive solutions for managing product returns, transforming difficulties into opportunities for increased profitability and customer satisfaction.  

Understanding the Importance of Product Returns   

The worth of returned merchandise rises every yea. The surge in eCommerce sales intensifies the problem. The mean rate of return is about 10%, but it can increase to 40% for online shopping.  

In several industries, it is even greater as 62% of customers ‘bracket’ their purchases. This means that they shop numerous items planning to return the ones they do not require. DigitalCommerce360 reveals this finding.  

Returns are an inherent element of customer experience. As per UPS, 73% of buyers think the return experience directly impacts the probability of making another purchase.   

Challenges Faced in Handling Product Returns   

When fraud is involved, managing returned products poses a challenge. As per the National Retail Federation there were approximately $7.7 billion fraudulent eCommerce returns in 2020.  

Most business firms prefer to forget their losses and discard returns. This is because their return handling systems are improper. There is a faulty assumption that the time and struggle taken to restock them outweighs the item’s loss.  

According to logistics firm Optoro, this notion significantly reduces business margins. It also leads to the wastage of 5 billion pounds of brand-new products each year.   

The usual challenges a business confronts while handling returned products are:   

Unable to trace and handle returns

Unable to recognize and avoid fraud 

Too many returns affect profits

Solutions Offered by NetSuite   

Implementing a robust return handling system will help businesses make reverse logistics easier and improve profits. But it demands a substantial base of technology and processes. NetSuite provides a solid foundation of technology and processes to address these challenges effectively.   

Inventory visibility  

Inventory control and visibility are key to reducing the expense of returns. Once an item is returned, one has to ensure that it is added to the inventory over every selling channel. This maximizes the chances of reselling it at the greatest possible rate. This is particularly the case for products that are seasonal or have a short expiry.  

Flexible fulfilment   

Retailers must provide modern customers with the flexibility to return items, regardless of where they originally purchased them. However, without proper procedures in place, this can impose a significant strain on the store personnel and raise the cost of goods sold (COGS).  

NetSuite enables businesses to receive returns at the store level. It also helps to utilize them for future orders. This reduces the cost and strain associated with returning products to warehouses or fulfillment centers.   

Returns Policy      

Having a well–defined return policy ensures customers with a greater purchasing experience through a buy anywhere, fulfil anywhere, return anywhere purchasing experience. Both buyers and sales associates must identify which products they can return because of the return policy. 

NetSuite simplifies the process of validating returns. It also prevents fraud by storing customer purchases in a centralized system accessible to sales associates.   

Returned merchandise authorization (RMA) Process   

An organized RMA process ensures that we will thoroughly examine and process a customer return after we accept it. A well-organized process helps employees understand how to examine a returned product. One can also choose whether to resell it or not.   

Products instantly move to inventory when returned thanks to NetSuite. This improves the overall profitability. It also facilitates the possibility of reselling products at the highest price possible. Using NetSuite, businesses can receive returns from all channels 

Complete exchanges  

Efficiently manage returned items  

Lay rules for return processes  

Standard Return Process Flow in NetSuite:   

The processes involved in Customer Return includes:  

Return Request Initiation:   

The customer initiates a return request by contacting customer service or submitting one through the company's website.  

Customer service representatives log into NetSuite and issue a Return Merchandise Authorization (RMA) for the return request.  

RMA Creation and Approval:   

The RMA contains customer information, reason for return, and items to be returned. It also has desired resolution (refund, exchange, etc.) and return shipping instructions.   

The RMA undergoes approval processes as per company policies and authorization levels.  

Return Shipment and Receipt:   

Upon approval, the customer receives instructions for shipping the returned items back to the company.   

Warehouse staff receives the returned items and logs them into NetSuite, updating inventory levels accordingly.  

Inspection and Resolution:   

The returned items undergo inspection to assess their condition and determine whether they are eligible for resale.  

NetSuite records the inspection results and it details any discrepancies or damage.  

Based on inspection results and customer preference, the resolution is determined (refund, exchange, repair, etc.).   

NetSuite updates inventory levels, processes refunds or replacements, restocking returned items, and generates corresponding financial transactions.   

Refund Processing:   

NetSuite generates refund transactions, reflecting the refund amount and method (e.g., credit card refund, store credit).   

Accounting staff reconcile refund transactions and process refunds to the customer's original payment method.  

The processes involved in Vendor Return includes:  

Return Authorization from Vendor:   

Purchasing staff initiates a return authorization request with the vendor if they receive defective items from vendors.   

The vendor provides a Return Merchandise Authorization (RMA) specifying return instructions and shipping details.  

Goods Return and Receipt:   

Warehouse staff packages the returned items according to vendor instructions and ships them back to the vendor.   

Upon receipt, the vendor inspects the returned items and acknowledges receipt in NetSuite.   

Credit Memo and Vendor Refund:   

NetSuite generates a credit memo for the returned items, reflecting the amount owed to the company by the vendor.   

Accounting staff reconcile vendor credits and process refunds, replacements or credits as per vendor agreements.  

NetSuite eliminates the possibility of point failures in multiple systems. It also ensures efficient management of the returned items. Without any lag, saleable products moved into available-to-promise (ATP). NetSuite aids in ensuring a greater customer experience through a buy anywhere, fulfil anywhere, and return anywhere purchasing experience.   

Troubled with managing product returns? Implement NetSuite to resolve the challenges. Meet the experts from Jobin & Jismi for the best assistance.