When Losing Revenue Can Make You More Profitable
Who would have thought that a company’s ability to reverse sales would help them sell more? But frequently, that’s just the case.
According to one survey, returns play a big role in customer retention: 92% will shop again if returns are convenient, 82% will not shop again if returns are inconvenient. And what’s even more interesting is that 50% of the people who return items end up purchasing additional items.
With revenue and customer satisfaction at stake, it’s easy to see why “returns management” has finally caught the attention of c-level executives.
What is Returns Management?
The Reverse Logistics Executive Council defines Returns Management as the set of processes that include accepting returns, reverse logistics, gatekeeping, and avoidance. When a business accepts a returned item, it must have a process in place to handle that “reverse flow” through the supply chain. That process is called reverse logistics. Does the product being returned go back to the supplier? Is it re-sold? Is it salvaged, re-conditioned, or refurbished? Whatever the particulars, the bottom line is this: solid logistics will save you time, money, and possibly customers. Sloppy logistics could result in erroneous accounting, sticky compliance issues, and grumpy customers.
Two important aspects of returns management are avoidance and gatekeeping. Avoidance means how you keep the number of items you accept for return to a minimum. The most obvious means of avoiding returns is quality control: the better the customer service and quality of product at the time of sale, the less likely it is to be returned. Your gatekeeping policies and processes limit the number of items that are allowed into the reverse flow—for example, by screening returned merchandise to ensure it’s under warranty.
Every business is different and will have to define their own return policies, avoidance and gatekeeping procedures, and reverse logistics. Creating airtight returns management policies and procedures is your first step. Equally important is finding the right Return Material Authorization (RMA) software tools. A good RMA system can accommodate and facilitate your returns management while integrating with your accounting system.
How Sage Accpac Can Help
Coming this fall, a new Return Material Authorization (RMA) module, Sage Accpac RMA, will be available to help Sage Accpac 5.4 customers manage their returns efficiently and accurately. This truly affordable RMA system delivers an impressive array of advanced tools and integrates seamlessly with your Sage Accpac accounting system.
With Sage Accpac RMA you can track your products through the entire life of the sales process: from purchase order through shipping and back to inventory (when applicable).
Armed with the intelligence this system provides, you’ll gain greater insight into the reasons for returns or repairs, as well as tighter control over your merchandise. The net result is that your company can process claims faster, track inventory with greater accuracy, and optimize customer service performance, no matter how many returns appear at your door.
Stay tuned in the coming months for more information about this exciting new addition to Sage Accpac.