Want to optimize your returns? Map your current process!

Michael Kruse Sørensen
March 5, 2024
10 minutes

It's time to optimize

We all dream of our businesses as well-oiled machines, but Rome was not built in a day and the reality often involves bumps in the road. The returns and claim handling process for physical products can be particularly challenging, with manual work, unclear guidelines, and fragmented data causing headaches for brands in the furniture and fashion industry.

As your business grows, the burden of handling returns and claims can become overwhelming, impacting the customer experience and your bottom line. It's time to optimize!

Start by mapping your existing returns process

The key to optimization lies in understanding and mapping your current process. The "as-is" state. Basically, how does your process actually look like today?

At Claimlane, we often start by spending time mapping out a potential new clients existing returns process.

We map the process by tracking the team handling several returns and claims from end-to-end, writing down all the steps. We’re curious and ask as many questions as possible.

We also estimate the time spent per step and note the pains and challenges. This way we can understand how much returns cost their business and where we can optimize.

An average return can take 40 minutes

We have done this exercise with brands in Furniture and Lifestyle Businesses who solve complex returns. On average, for the Brand here, handling a return takes about 40 minutes, costing 24 EUR at a rate of 35 EUR per hour. This is just the handling time; additional costs like shipping and compensation need to be considered. At thousands of returns a year, that’s an expensive process.

The reason being that the process is highly complex: there are many stakeholders, different customers, channels, return types, outcomes, and actions. And often its very manual.

Click the picture to Zoom and see what a process map can look like

An As-Is process map of a Brand's Returns Process

Below we walk through the details of our clients process as shown in the picture. Each step is outlined with a description plus the challenges and pains involved. Chances are you can most likely recognize your own company in parts of it:

Step 1: Customer starts the return

  • The customer submits a return or claim. They can typically be submitted by different types of customers (B2C and B2B) and across sales channels. Depending on your process, your customer might fill out a form, send you an email, or ask you directly in-store.
  • It’s complex because there's different types of customers who submit returns in different ways depending on where they shop. If you don’t have a clear system, customers might provide you with different types of information across emails, PDFs, and forms. The result can be a mess.

Step 2: Review the return

  • The team or support agent reviews the return. E.g. reads through the email and reviews attached information such as order details and pictures.
  • Depending on your process the information provided by customers might be insufficient, unstructured, and/or be scattered. You might need to look up information in your internal systems. It's a simple step that can unnecessarily be time-consuming.

Step 3: Categorize the return

  • The team decides what kind of return the customer is making. Is it simply an unwanted item, a missing part, or a faulty product? If faulty, is it under warranty or not?
  • Depending on your guidelines it can be difficult for the support agent to categorize the return. Your team might need to look up guidelines or tag them incorrectly. Also, you may lack information from the customer, which means you cannot make a judgment.

Step 4: Determine if you have enough information or follow-up with customer

  • The agent concludes whether they have enough information to resolve the return or claim. If the customer didn’t provide enough information, e.g. pictures documenting the fault, the agent must ask and wait for the customer to provide it.
  • If you don’t get the right information up front, you will end up spending a lot of time going back and forth with customers. This delays the resolution, which may extend over several days or weeks. Needless to say, that’s a bad experience for your customer. Also, it typically takes even longer because the agent has to revisit the same return several times.

Step 5: Decide on the Outcome

  • The agent decides the right way to handle the specific return, such as a Replacement or a Refund, or they might conclude that the customer is in fact not entitled to either. We call that the "Outcome".
  • There are many different outcomes and situations to take into account. Agents must know exactly when they can give certain outcomes. This can be challenging and takes too much time if the rules and guidelines are unclear.

Step 6: Process actions to deliver the Outcome

  • For each Outcome there’s a process with multiple steps to execute. For a Refund, as an example, the agent must apply it e.g. in Shopify. And for a Repair the agent must facilitate the logistics between the customer and the repair shop. Each of these outcomes have their own process that must be mapped out and optimized as well. For simplicity,  it's illustrated as a single step in the flow above.
  • There’s typically a lot of manual handling involved. Furthermore, if each step is not clearly laid out to the service agent, this can take much longer than necessary. Typically there’s a lot of room for optimization here with automation of the different processes once the outcome has been determined.

Step 7: Inform the customer of the Outcome

  • The agent informs the customer via e.g. email or through a ticketing system that they have processed their return.
  • Often manual. It’s often a simple place to write macros or template responses for typical Outcomes.

Step 8: Update internal systems

  • It’s important that the systems of record shows that the return happened and what was done about it. If you handle returns via either emails or ticketing systems you might need to update information across systems in order to keep track of your returns and claims.
  • If you handle returns and claims manually via either emails or a ticketing system without integrations, there's high risk you will spend a lot of time manually updating your systems or simply not do it at all.
  • If you don't have the right information logged, it’s difficult to understand what's going on and how to improve your business.

Step 9: Analyze and report on your returns

  • Once in a while you or your management team want to know what's going on in the returns department. E.g. how big a percentage of orders are returned. Which products drive our claims rate and why? You collect the data, analyze the numbers, and share reports on your findings.
  • These are often ad hoc analyses. However, it's really information that should be readily available for you to track on an ongoing basis. If all data is not automatically updated in your systems, there's high risk you will spend a lot of valuable time manually processing the information when you need it or you simply won't do it at all. Both are a big cost to your business.

Try it yourself

So to kickstart your optimization journey, spend time with your teams who actually manage and resolve returns, ask open questions like a scientist, and create a visual representation of your current process. Hang it on your wall, align with your team, and start the journey toward process improvement.

If you're interested in a deeper dive into improving your returns process, stay tuned for our next post.

Here we will describe how you can start optimizing your process. And if you need any guidance along the way, don't hesitate to reach out. We'd love to help.

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