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Creating customer-centric service at the return counter

BY CSA STAFF

By Robert E. Walters, [email protected]

More and more retailers are seeking innovative ideas to deliver customer service excellence at the return desk in an attempt to set them apart from the competition and make a first-rate impression with consumers. But as retailers evaluate how to accomplish this through a more lenient, customer-centralized focus — including extending merchandise return time frames, reducing or eliminating restocking fees, and offering cash refunds — they also find the need to better manage risk and prevent invalid returns from slipping through the cracks.

Often retailers lack the data and processes to identify the key factors that allow them the flexibility to provide the appropriate service, with minimal customer impact, while still ensuring the validity of every return. By implementing specific return optimization tools at the return counter, however, retail companies can maintain profitability, solidify relationships with long-time customers and make a stellar impression among new shoppers.

Solutions such as Verify-2 (the current version of The Retail Equation’s Return Authorization System) allows retailers to eliminate restrictive return policies (often designed with good intentions to prevent fraud), as these may inadvertently alienate a retailer’s best customers. For example, non-receipted returns or returning an expensive product that exceeds a retailer’s return rules may raise a red flag with some return systems — even with retailers’ most loyal clientele. But more sophisticated solutions are designed to identify individual shoppers and their purchase and return behaviors, and score them against fraud and abuse trends, ensuring a positive experience for all customers making legitimate merchandise returns. Removing the need for managerial involvement to authorize returns dramatically increases return counter processing speed and also eliminates the possibility of employee bias in the approval process.

To optimize the return experience and make the process easier and more flexible for consumers, consider the following tips for improving customer service at the point of return:

Provide fair and flexible returns. A recent study shows retailers that don’t provide cash refunds on returns, or don’t accept returns without a receipt, rank high on consumers’ list of complaints. Retailers that utilize return authorization systems have the ability to offer customers consistent and customer-friendly return policies, and a comfort level with providing all types of refunds, as they can easily confirm the transaction is legitimate.

Treat your best customers as such. A benefit of implementing return authorization systems is the ability to identify good customers from those committing return fraud like “renting” or “wardrobing” (buying merchandise for short-term use with intent to return). Eliminating or reducing re-stocking fees for honest shoppers can win big points (and sales) with consumers, as will easing tender restrictions on returns.

Cater to your return/exchange customers. Be aware of how the processing of returns can impact relationships with customers. Long lines and cumbersome return policies do little to assuage crowd tensions, voiding out any positive first impressions made at the initial sale. During holidays or other busy seasons you may consider extending receipt age times and offer more lenient policies, which will reflect a retailer’s emphasis on customer service. In addition, VIP customers’ returns should always be handled with extra care in order to drive deeper loyalty. These objectives can all be accomplished effectively and with minimal business risk via an automated return system.

Don’t underestimate the importance of proper staffing and training. Make sure there’s an ample number of staff at the return counter to move the process along efficiently, and that they’re well-versed in the company’s policies. Ensure employees clearly communicate return policies to customers during purchases, as well. A verbal reminder of policies at check-out, in addition to printing on each store receipt and well-placed signage, will prevent tension and misunderstanding during the return process.

Give return customers with a reason to keep shopping. Programs such as The Retail Equation’s Return Rewards can facilitate significant new sales at the point-of-return and build customer loyalty by using a customer’s return information to instantly customize an offer for that particular person, thus providing an immediate incentive for the customer to continue shopping at the store. The program is an opportunity to deliver a discount or special offer and recover revenue from the initial “lost” sale.

Understand the benefits of preventing return fraud as it occurs. A special tool such as the Verify-2 Return Authorization System is designed to identify consumers whose behaviors mimic return fraud or abuse by analyzing their unique return behavior. While the NRF estimates approximately 8% of all return dollars are lost to fraud, these losses are driven by less than 1% of all consumers; therefore, it is just as important that you protect and enhance the return experience for your honest customers.

With some strategic planning and the right partners, retailers can effectively drive satisfaction at all customer touchpoints in the store, enabling them to differentiate and also thrive long-term. All retailers can maximize revenues by looking at all shopper transactions — including returns. Every shopper interaction within the store is an opportunity to add to your a loyal customer base; many retailers have already followed these helpful tips to create unique customer experience — at the place they expect it least — the return counter.

Robert E. Walters is VP of sales & marketing at The Retail Equation (the leader in optimizing retailers’ revenue and margin by shaping behavior in every customer transaction). He can be reached at [email protected].

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CVS/pharmacy’s Just the Basics line makes debut

BY CSA STAFF

WOONSOCKET, R.I. — As expected, CVS/pharmacy officially has introduced a new line of store-brand products called Just the Basics, which is comprised of household essentials. As previously reported, the retailer unveiled plans to launch the new line during its 2010 analyst day in October.

The new product line, exclusively available at CVS/pharmacy, is comprised of nearly 100 items, and there are plans to expand the line going forward.

"We know our customers want an option to save where they can so they can spend where they want," stated Grant Pill, VP merchandising for CVS/pharmacy. "Just the Basics offers smart simplicity with a full line of basic products that customers need to get them through the day with even lower prices and the added convenience of shopping at CVS/pharmacy."

Just the Basics offers shoppers a large selection of practical items from a variety of categories throughout the store, including household, beauty, baby and personal care. The products start at 67 cents and can be found at store locations nationwide and online at CVS.com.

During the analyst day meeting in October, CVS executives told attendees that its private-label penetration is expected to grow to more than 20% in the next two to three years. To drive that growth and take a leadership role in private label, CVS hit the drawing board to develop the Just the Basics line.

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Store closures impact TJX’s profit

BY CSA STAFF

FRAMINGHAM, Mass. — TJX Cos. reported a 15% drop in fourth-quarter earnings, dragged down by costs to close its A.J. Wright store division. The company also plans to repurchase $1.2 billion of its stock this fiscal year and raise its dividend.

The retailer earned $334.4 million in the three months ended Jan. 29, compared with $394.9 million in the same period last year.

Revenue rose 6.5% to $6.33 billion. Same-store sales were up 2% over the prior year’s strong 12% increase.

In 2011, TJX plans to increase capital spending in the $800 million to $825 million range to support continued growth in its store count, remodels, and investments in its supply chain and infrastructure.

During the fiscal year ended Jan. 29, TJX added 116 stores, net of closings for a total of 923 T.J. Maxx; 830 Marshalls; 336 HomeGoods; and 142 A.J. Wright stores in the United States; 212 Winners; 82 HomeSense and three StyleSense stores in Canada; and 307 T.K. Maxx and 24 HomeSense stores in Europe. As of Feb. 13, all A.J. Wright stores had been closed and 90 are in the process of being converted into other TJX banners.

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