Effective inventory control and product return management strategies can result in increased revenues, lower costs, improved profitability and enhanced levels of customer service.

Product returns are annoying for customers and sellers. It’s often been seen as a nuisance as it entails a hefty cost and is an area of customer dissatisfaction.

Many sellers use an ad hoc process of handling product returns. However, successful companies have realised that implementing an effective product returns management strategy, which is a major aspect of reverse logistics, can provide a number of benefits when coupled with good inventory control.

Return policies and customer satisfaction

It’s much harder and costlier to win a new customer than it is to keep an existing one. With this in mind, a return policy needs to be flexible and lenient, but not to the extent that it affects a seller’s bottom line. The key is for retailers to put themselves in their customers’ shoes and ask yourself if they would find the return policy fair?

Major problems with product return


With returns, time is of the essence. When returns are brought in, they need to be processed quickly to ensure the retailer can still sell it and make a profit. Delays can result in products that are out of season of obsolete by the time they are returned to the shelves.


Return fraud costs up to $14 billion annually. Some retailers offer store credit or refunds on products, even if the person wasn’t the one who bought it. While this policy is designed to allow gifts to be returned without a receipt, it also makes retailers vulnerable to theft.

Fraud can also happen when a product goes on sale. Customers may buy the item at the lower cost and try to return it with a receipt with the higher price on it so that they can pocket the difference.

A solution?

There are several ways retailers can combat these issues, such as stricter return policies, charging for returns, and better loss prevention. However, these methods may affect the brand’s reputation and customer satisfaction – especially when retail giants like Amazon and Costco offer a hassle-free return policy.

A generous return policy may give you a competitive edge, but it will cost you. How can retailers develop a return policy without eating away at the bottom line?

One way multi-channel retailers achieve this is by accepting in-store returns from online purchases. On the other hand, some retailers may see value in partnering with a third party logistics provider (3PL) to handle eCommerce returns.

Another viable option is RFID tags. RFID tags are already being used to manage inventory control for many different manufacturers and warehouses but can also be used in the retail space. The cost of implementing such a system should be offset by the savings from reducing return issues and bettering the returns management process.

Industry trusted inventory management solution

Streamlined operations with RFID tags and inventory control

RFID tags can simply be scanned, and the process is done automatically, taking away the burden of manually processing inventory stock. A new sales tag can then be attached, and the product can be back onto shelves in a timely manner.

Having each tag scanned during each phase of the supply chain allows staff to know the history of an item. This streamlines a retailer’s back-end processes and can prove whether the product was paid for. It will also show the price paid to be sure discounted items are not returned for a higher price. This option is a big step to decreasing return fraud.

There are benefits beyond reducing returns as RFID tags help to make inventory control much easier. Instead of manually sorting boxes and piles of products, they can be scanned quickly and efficiently. Time can be saved on both ends of the process.

Since maintaining a hassle-free return policy has become the standard operation for most retailers, having better inventory control and an inventory management system that can track important data is important. Good inventory management solutions will give you the option to maintain additional inventory stock levels that mirror your return rates.

Additionally, you can monitor the reasons for returns and address issues to reduce the rate of returns, helping to maintain customer satisfaction. Inventory control is a core part of any retail business and should be able to account for product returns. By using a solution that provides sellers with real-time data about their inventory stock, sellers will be better positioned to deal with products as they return. As much as a business doesn’t want customers returning products, customers equally don’t want the returns process to be difficult. Inventory control helps you manage the customer experience when it comes to product returns management.

Share This