By Rose Spicer-Oracle on Jan 04, 2016
According to NRF, retailers estimate holiday return fraud will cost $2.2 billion in 2015. Combine this number with the rise in online shopping this holiday season, of which 80% includes free return shipping, and you’ve got some significant revenue loss potential.
About $62 billion in goods bought between November and December 2015 will be returned, up 8% from the same period last year, with about a third of those items (more than $20 billion worth) purchased online, according to Customer Growth Partners.
A pain-free returns process is a vital part of the customer service experience and denying legitimate returns presents significant risk to customer loyalty. A well defined and managed returns process will enhance the customer experience while protecting the business from theft.
We asked Michael Colpitts, Solution Market Director, Stores & Commerce, Oracle Retail, to share his tips on how to achieve the right balance between fraud prevention and excellent customer service.
4 Essential Considerations for Hassle-free, Low-risk Returns
1. Plan for Unreceipted Returns
It is estimated that more than 13.4 percent of nonreceipted returns are fraudulent; unfortunately, you can't just deny all nonreceipted returns. Studies show that a customer's experience of returning merchandise is a key decision point in building loyalty and many of them expect to be able to return when and where they wish. So on one hand, you have to factor fraud cutting into the bottom line, and on the other hand you have to consider how a poor customer experience diminishes loyalty. Managing exceptions from your POS data allows loss prevention professionals to quickly flag recurring issues like unreceipted returns so that field investigators can prioritize investigations.
2. Leverage Automation to Ensure Compliance
It’s fine to write a policy statement and distribute it throughout your stores, but actually achieving compliance is another matter. That’s where automation becomes really important. You want a system in place that offers associates the right guidance during the execution of returns so that policy is adhered to, customer experience is consistent at every location, every time and employee knowledge of policies becomes widespread.
3. A Single View of the Customer is Critical
If your in-store POS and online sales data is siloed you are inevitably going to miss patterns. This is key because a customer’s return history is invaluable in determining the likelihood of fraud. Just as important, leveraging a central repository for all customer transactions enables you to convert a nonreceipted return into a receipted return by looking up the original transaction at the POS.
4. Look for Flexibility, Scale and Seamless Integrations
When selecting a technology solution always consider what the business will look like in 5, 10, 15 years and consider integration requirements with other solutions (both cloud and on-premises). The Oracle Retail Returns Management solution gives retailers the ability to create flexible returns policies that are fully integrated with the broader Oracle Retail Stores and Commerce solutions ensuring a consistent data set. Even the most complex policies are easy to create and manage with 40 built-in rules that evaluate the return. These rules incorporate all available criteria to determine how the return should be handled including presence of a receipt, customer return history, store location, item or brand being returned, condition of the item—and much more.
The Risk of Doing Nothing
As loss prevention technology adoption accelerates criminals strategically look for retailers that have manual processes and loop holes. For those who do not act, losses will inevitably accelerate. We’re helping retailers strike the right balance of risk mitigation and hassle free shopping experiences. Learn more at oracle.com/retail or drop us an email: firstname.lastname@example.org.
For more information on retail fraud statistics and trends read NRF’s 2015 Consumer Returns in the Retail Industry report.