A Guide to Efficient Returns Management

A Guide to Efficient Returns Management Returns are a problem for many organizations. They are often dumped to be sorted out at a convenient time, thus taking up an entire heap when a physical inventory of the warehouse is carried out where these merchandises are stored. The lack of a specific set of procedures related to these activities is the fundamental cause for many of the organization’s problems. It is therefore essential to make the complete process as smooth as possible, by establishing a solid returns management system to make certain that all returns are sorted out efficiently.

By adopting suitable returns management services, and following these steps, the process of handling returns can be made more efficient.

Ascertain the goods that can be returned It is necessary to be clear on the goods that can be returned. Many business organizations typically restrict returns to goods that are in stock. When a customer makes a purchase, he should be made aware of the returns policy. To ensure that all the parties agree on the policy, it is important to make this information available on invoices and packing slips. Nevertheless, having a few top management members supersede this policy can be beneficial, as it is the customer’s contribution that determines the prosperity of a company.

Treat returns like just another stock receipt It is always important to keep in mind that any returned material should be discarded and ignored. It is therefore a good practice to issue a RMA or a return material authorization to the customers, so as to ensure a suitable documentation of goods that are returned. A copy of the RAM can be a part of the physically returned goods and also serve as a packing slip by the receiving staff. All the returned goods received can be segregated into whether it can be resold in the same returned condition, whether it needs to be refurbished or repacked, whether it has to in turn, be returned to the supplier, and whether it has to be written off. By setting aside the returned goods on the above categories, it can be decided what next needs to be done.

Estimate the cost involved to process a return As an organization’s productivity and ability to make profits is directly affected, it is important to emphasize the time takes for a returned product to go back to its normal storage location. Handling charges need to be expressed as a percentage of the price the customer originally paid for the item.

Most organizations try to recover the cost of processing returns by assessing a handling charge on the credit memo, which is more often than not, not very practical. It is important to estimate the cost involved in processing a return as the result will help determine whether the return is making a difference to the profit of the company.

Returns management can be made more efficient by minimizing the time and effort. Although handling returns is not a pleasant task it can be kept under control by establishing some fundamental policies and procedures.

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