Return to origin (RTO), damage in transit, undelivered, etc., is the biggest challenge in any online business delivering products as it directly affects the revenue and profits.
Shipping is the most crucial part of any business. After all your efforts, from product listing to marketing, if the order is not delivered to your customer as expected, all your time and efforts are wasted.
All your efforts will go in vain if the end product is delivered broken or damaged, lost in transit, or returned to its origin.
The world is changing online, and new businesses are launching every day. With the number of online orders increasing, the shipping industry is saturated with orders and getting your orders delivered to your customers is a challenge.
The main issue with selling products online is that the buyer cannot view or check the product in person. That is why it is not unexpected that 30% of all products ordered online are returned, compared to only 8.89% of products purchased in brick-and-mortar stores.
You must include the Return to Origin (RTO) rate before determining your income and ROI.
In this article, we will talk about what is the return to origin (RTO) and how to solve it.
Let’s go!
How to Reduce RTO Orders
While the average eCommerce return rate for all transactions is 20%, it climbs to 40% for COD (cash on delivery) orders. On average, the seller will receive four returned COD orders for every ten orders.
It is evident that the smaller your RTO, the greater your business return. That is why it is critical to take constant action to lower ROI as much as feasible. Here are a few possibilities:
1. Reduced e-commerce Returns
The most excellent method to reduce RTO is to eliminate the possibility of any return. You can begin by enhancing product quality.
- Increase the number of high-resolution photographs on the product page, incorporate extensive product descriptions, and offer dynamic sizing charts. It guarantees customers understand their purchase and have appropriate expectations when the order is delivered.
- It would be best to emphasise order accuracy to ensure that the right product reaches your customer and is in excellent condition.
- Adding consumer reviews on the product page that offer a thorough overview of the quality and usage of the product
- Providing customer service through chatbots, email addresses, and phone numbers so that consumers may resolve their issues
2. Provide A Variety of Payment Options.
Customers that refuse to pay for their orders raise the economic effect of RTO on an online firm. You will have to bear the cost of return postage. To avoid it, you must be:
- Offering a variety of payment options such as debit cards, credit cards, UPI, digital wallets, and others
- You can provide discounts for digital payments.
3. Provide Order Tracking
Customers will occasionally place an order for a special occasion or event. If the order comes after the event, the customer may no longer require it. Apart from assuring lightning-fast shipment, it would help if you thought about the following:
- Giving your customer an estimated delivery date so that they may plan their purchase delivery
- Provide real-time order tracking and order updates to your customers; you can instil confidence in them that their orders will arrive on time.
- Notifying your consumers in advance of a delay
4. Verify Customer Availability And Information
Failed delivery attempts result in RTO, which incurs additional expenses owing to rescheduling and alerting the Client. What you should be doing is as follows:
- Create automated messages or calls to contact your consumers and collect vital information, such as assuring customer availability and validating the entire customer address.
- Automate the verification process and allow your customers to request another delivery attempt or modify the delivery location on the customer portal whenever they want, without needing help from the customer support team.
- Simplifying returns, exchanges, and order cancellations so customers can do the necessary tasks on the customer portal without trouble or creating RTO.
5. Create a Return Policy
A return policy assists you in managing how you handle returns and exchanges. Establish a policy defining customer expectations so they know what they may return or exchange and when.
If your policy is clear, customers will be less likely to feel uneasy or upset. Consumers will follow a procedure if they are aware of the regulations before making a purchase.
6. Provide Customer Service
To lower your product return rate, you should offer customer support to assist your consumers if they encounter any issues with the product they want to purchase.
As a result, you may give better product information and lower return rates caused by the customer’s lack of product knowledge.
You may build a personalised chatbot that answers frequent questions customers have about your online or print on demand products and gives them the information they need to decide whether or not to buy.
Use WhatsApp chatbot that can answer your clients’ inquiries about your products.
Also, your agents may clear up any doubts regarding the product, which will develop confidence in the consumer. Chatbots allow you to automate commonly requested queries, such as:
- Where is my order?
- What is your return policy?
Furthermore, it can gather additional information about the customer’s issues and preferences. It also helps collect the knowledge to help you make informed decisions about your products.
7. Determine Who Your Most Valuable Customers Are
By combining RTO and CRM data in an end-to-end marketing analytics solution, you can discover consumers with the lowest RTO rates and target them individually with special offers and incentives to raise their CLTV.
You may also find clients with the highest RTO rates to learn their significant concerns and difficulties with your goods.
8. Distribute Your Inventory Throughout India.
With warehouses all around India, you may accelerate order delivery and RTO. It will assist you in optimising reverse logistics, i.e. fast refilling returned products in available inventory and making them resellable. Here’s what you need to do:
Investing in a spread network of warehouses across India or outsourcing e-commerce fulfilment to a fulfilment business such as Shiprocket’s Warehouse to use their fulfilment centres.
9. Blocklisting Fraudulent Customers
- Purchase a fraud-prevention software that assists you in detecting fraudulent behaviour and raising red flags.
- Conducting a quality control check at the customer’s door
- OTP (one-time-password) is sent to the customer to ensure the delivery of high-value orders.
- Make a claim when you sell on marketplaces and the returned items do not pass the quality check.
10. Convert Refunds Into Exchanges
RTO hurts the income of an online brand. You may recover your revenue by:
- Encourage customers to purchase another product by providing colour, size, and style recommendations when they return an order.
- Offering your customers the option of receiving their refund in their shop wallet so that they can purchase anything else in the future
- Providing instant reimbursements for wallets, as opposed to source accounts, which take 5-7 business days
Conclusion
RTO loss is a severe concern for D2C businesses but is fixable. The goal is to understand the RTO loss landscape and then handle it proactively.
You may keep RTO losses to a bare minimum with the right solution. It will assist you in improving your company’s bottom line and ensuring healthy growth in the following years.
There is, without a doubt, no foolproof strategy to eliminate returns. But, sellers must have a comprehensive process to handle returns most suitably.
Customers are willing to return things because of the ease and comfort of online purchasing and the relative absence of risk.
Collaborating with a professional logistics business like Nimbuspost, Shiprocket or Shipease may dramatically transform how you send a product from one location to another. It helps you to handle the issue and decrease substantially RTO in eCommerce successfully.
Frequently Asked Questions
1. What Does Return to Origin Mean?
“Product return” is a common term in online business. Courier companies assign the RTO status (Return to Origin) to returned products due to failed delivery.
RTO orders are ones that were not delivered to the destination address for any reason and were returned to the seller.
2. What Are The Costs Associated With An RTO Order?
Understanding how to reduce RTO in e-commerce is essential for being profitable.
These RTO-related expenses might hurt your company’s bottom line:
Shipping costs: Returning things costs money. If your company provides free shipping, you include the cost of shipping in the overall price of the goods. Nevertheless, if a buyer returns the product, you will be responsible for the reverse shipping costs.
Expenses of repackaging: Items are shipped in customised boxes with packing slips and postage. When consumers return such packages, they must be unpacked and restocked. Workers must then repackage them before sending them to a new customer.
Damaged products: When customers return items, they may pass through several warehouses and deliver alongside many other things. During this procedure, certain items can get damaged.
Handling and operational fees: If a product lies on a shelf, it is not generating revenue for your organisation. And if it eventually ships only to be returned, your company will lose money.
Expiration: Certain items might not endure permanently. Some are only valuable at particular seasons. Shipping a product that goes missing, found after its expiration date, will leave you with an unsellable product.
3. How To Reduce RTO Orders?
Here are 11 key ways to reduce RTO orders for your e-commerce stores:
- Reduced e-commerce returns
- Provide a variety of payment options
- Provide order tracking
- Verify customer availability and information.
- Create a return policy
- Provide customer service
- Determine who your most valuable customers are.
- Distribute your inventory throughout India.
- Blocklisting fraudulent customers
- Convert refunds into exchanges
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