Ecommerce Returns Processing

May 10 2021

eCommerce Returns Processing

Having a solid ecommerce return policy is a fundamental part of running a successful e-commerce business and gives your customers the confidence in shopping with you. Statistics say that 62% of online shoppers are more likely to purchase from you if you have an easy and clear returns policy

eCommerce returns software has been designed and implemented on many websites to make the eCommerce returns processing process a smooth and easy one for your customers, making it as pain-free as possible process for both parties, this is especially true when your eCommerce returns software is integrated into your delivery partners and inventory management.

To keep your ecommerce return rates as low as possible there are a few tools you can normally make use of like exchanging for different sizes or suggesting alternate products but ultimately this is something you need to be aware of and your e commerce return cost should be catered for in your product costing exercise. Your e commerce return cost can be calculated by working it out using the following formula

Having a simple straightforward ecommerce returns process should be easy for your customers to understand up front and be able to follow. When your customer logs a return they will need to be issued with a goods return note when the return has been created in the ecommerce returns software.

Ecommerce Returns Management

Choosing your ecommerce returns management software is critical to your business and it needs to be specific to your business as your requirements will determine what type of RMA software you should be using. You might need different software depending on if your business is retail-focused or wholesale-focused. Retail and Wholesale customers have different spending habits and this will need to be catered for in your RMA software.

Regardless of if you are focusing on retail or wholesale customers, you will definitely want to make sure that the returns management solutions you offer to your customers is simple and the instructions available to them for logging a return are clear, concise, and user friendly to allow them to easily log a return in your returns management system. If the process is too complicated your customer could get frustrated and the process could become a very negative experience.

If you are running your e-commerce website through Shopify then the Shopify returns management add ons available in the app store will definitely be of interest to you. There are a few different integrated returns management software solutions available, if you search Shopify returns management you should be given a list of really good options like Happy Returns, Returnly: Returns Manager and Aftership Returns Centre. These are all really great returns management systems and you will need to read through all the available options to decide which one will suit your business and budget.

Happy Returns

Happy Returns is now available for download in the Shopify App Store. By adding this app to your Shopify store you are guaranteed to give your customers the peace of mind that all purchases can be exchanged or returned at any Happy Returns participating retailers return bar.

Happy Returns Shopify is just one of the e-commerce software platforms they integrate into and you can also find integrations for a host of other platforms listed on their website.

The process designed by Happy Returns is a simple and effective one. Your customers simply start the return on the Happy Returns website or at any Happy Returns participating retailer's website, book the return and then drop off the product being returned at the closest or most convenient return bar - it is literally that simple! Happy Returns will keep you up to date on the return as it moves through the different phases and make the process so simple and user-friendly your customer will never worry about shopping online again.

Product Return Rate Analysis

Handling returns is a huge part of managing your eCommerce business. Online stores receive a significantly larger number of returns than brick-and-mortar stores—30% of items purchased online by customers are returned versus 9% of items purchased which are returned in brick-and-mortar stores. The higher return rate for e commerce stores can be attributed to a lot of shopping online is done on impulse and in the clothing industry, it is due to the items not fitting correctly.

Being able to handle returns and how to reduce returns in e commerce is critical to your business making a profit and being successful. If you do not manage your returns they can get out of hand and have a negative impact on your business. In the clothing industry, you will need to cater to a higher rate of returns due to items potentially not fitting.

You should follow a product return rate formula to assist with predicting product returns in e commerce. To do this accurately you will need to work out what percentage of online purchases are returned and what the cost of returns to online retailers will be when you price your products to ensure that these costs are worked into your product price. Neglecting to do this could have a catastrophic effect on your business and the potential losses could end up driving your business into the ground.

These calculations can become incredibly complex so using a customizable ERP sales-driven data system like SAP that is capable of handling and customizing data like this is highly recommended.

The sales return process in SAP can be completely customized to your business's requirements. and dependent on your setup you will most likely need to request your SAP consultant to write a module specific to your sales return process in SAP. While this process might take some time to figure out and plan it will be hugely beneficial in the long run.

The merchandise return rate for online shopping is currently significantly higher than in-store shopping due to impulse shopping and creative marketing campaigns and can be worked out using a local algorithm for product return prediction. The algorithm will need to be based on factors unique to your store ie like if you have brick and mortar, locations and your delivery and return policies.

The product return rate definition states that you can have a KPI based on the percentage of sales orders which have current returns and from there you can create flowchart return value diagrams to illustrate this. These return value diagrams are huge information to illustrate the returns rate for presentations to your board.

Container Shipping Process Flow Chart

Container Shipping will normally be used in export markets and to illustrate the goods return process flow you can create a customer returns process flow chart which outlines the process graphically for your customer as the process of international returns could be a significantly more complex process.

Depending on the nature of your business you might need to create a sales return process flowchart for international customers who will be returning products directly or a goods delivery process flow chart for customers purchasing the products that were delivered directly. These sort of charts and documents are critical to running an efficient international business and will be required when dealing with customers internationally to give them the peace of mind that there is an efficient returns process in place.

Product Return Process

There are two main steps in the returned goods procedure. First is the warehouse returns process and then we go into the inventory return process.

In the warehouse returns process, the product is returned to the warehouse, inspected based on the reason for the return, and then dependent on the inspection results there are a couple of different actions that could take place. The item could then be returned to the inventory and a replacement is sent or the product is written off and the customer is given a credit or refund.

In the inventory return process, the product is returned into the inventory system and a replacement will need to be invoiced out or the product will need to be written off and the product gets discarded. You need to make sure that these entries are captured correctly or you could end up with incorrect results in your inventory system which will cause your stock levels to be incorrect and you could potentially end up overselling a product.


Returnly is another great example of returns management software used to automate returns. The unique factor with Returnly is that it can be fully integrated into Fedex which will then allow your customer to track the return and dispatch of the products while in the return process. This makes them a better choice than Loop Returns as that software is only currently available to integrate into Shopify.

The beautiful thing about Returnly is the feature to interact with your customers at the point of return. This allows you to engage with them, understand the issue and assist them with finding a replacement with ease. This creates a positive return experience for your customer and guarantees that they will be likely to shop with you again in the future.

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