Online shoppers return products all the time for all sorts of reasons—it’s the wrong size or color, it doesn’t fit, or maybe it’s just plain broken or defective. For some, it’s simply not what they were hoping it’d be. As a business owner, it’s crucial to learn why items are returned so you can improve your product and ensure your return process runs smoothly.
Implementing proper return merchandise authorization can save your customers added frustrations. Learn more about how these systems work and why they’re a must for every ecommerce business.
What is return merchandise authorization (RMA)?
Return merchandise authorization (RMA) is the process a business puts in place for returning items to its online store. Depending on company return policies, customers may return a product if it is defective, no longer needed, or not what they were hoping for. An RMA system also facilitates repairs and returned item tracking.
Return processes can operate in different ways, but a great RMA system keeps an accurate account of returned items so you can handle restocking fees and warranties while keeping your customers satisfied. Tracking your consumers’ buying habits through the RMA process gives you critical data on which items have the highest return rates. In doing so, you’ll have a clear understanding of what needs improvement in your products and their features.
What is an RMA number?
Return merchandise authorization numbers are issued for every returned item. They are used to track the item during the return process. By assigning RMA numbers, companies can quickly manage inventory and maintain clear customer communication.
RMA process
- The customer initiates a return
- The item receives an RMA number
- The customer receives return instructions
- The customer ships the item
- The company assesses the returned product
- The company issues a refund or replacement
You can create a distinct RMA process that fits the needs of your business and its target consumers. The following steps can help get you started:
1. The customer initiates a return
Customers initiate the RMA process by entering a return request via email, phone, or a portal on your business’s website. Your organization can ask customers about the reason for the return, details on the product’s quality, any possible defects, and whether they would like a replacement, refund, or store credit.
2. The item receives an RMA number
After the customer begins the return process, your business can issue a return merchandise authorization number for the product. By assigning this unique identifier, you can monitor the status of the return, confirm that you’re processing the correct item, and provide updates to the customer.
3. The customer receives return instructions
Your business may include a prepaid label and a drop-off location, and inform the customer of how many days they have to send the item back.
4. The customer ships the item
The customer sends the item to the business’s distribution center and awaits a refund. Keep communication pathways clear by notifying customers when you or your fulfillment center receives the package.
5. The company assesses the returned product
Once the product arrives, your business can notify the customer of the receipt and you can begin evaluating for any reported damages or wear and tear.
6. The company issues a refund or replacement
This step ensures customer satisfaction by confirming they receive money back promptly and accurately. Notify the customer that you’ve issued their refund and let them know how long it will take to receive their money or replacement product.
Benefits of RMA process for ecommerce
- Improves products
- Provides customer behavior data
- Cuts down on future returns
- Increases the probability of sales
The average return rate for ecommerce businesses is almost 17%—notably higher than the average 10% return rates at traditional brick-and-mortar stores. Beyond ensuring customer satisfaction, a great RMA system can benefit ecommerce businesses in a host of ways, including:
Improves products
The RMA process shows which products meet customer expectations based on their return rate. By surveying customers on the reason behind their returns, you can collect this data and evaluate if you should make changes to your product lineup, quality control, suppliers, shippers, or even inventory itself.
🌟How well do you know your customers? This guide can help you craft an effective survey that gets you actionable customer satisfaction and market research data.
Provides customer behavior data
What your customers return and how often they return products is information you can use to understand them better. Are they looking for a particular feature or benefit from your product? Is there an unmet need you can address in the future?
Unlocking this kind of customer data will help you discover what is most important to your customers. If you use this knowledge to improve your products, you can improve customer satisfaction.
Cuts down on future returns
Although your business may lose money with each returned item, paying close attention to returns can help you reduce future losses. Many customers might return an item if the product description is inaccurate or something is defective. Addressing these issues and fixing them can help decrease returns.
Increases the probability of sales
According to USPS, 92% of consumers are more likely to buy again if the return process is easy. Customers feel more comfortable if they know the return policy offers conveniences such as prepaid labels or convenient drop-off locations. Your business can make more profit by simply establishing a smooth RMA system.
Best practices for RMA
- Automate your RMA process
- Establish a detailed return policy
- Ensure accurate product information
- Incentivize customer reviews
- Minimize damage in transit
- Stay vigilant against fraud
To help streamline the return process, follow these best practices:
Automate your RMA process
Automate the return process with services like Shopify Flow so the experience is fast and efficient for customers. If customers receive automatic communication once you receive their item or issue their refund, it will improve customer experience and encourage future shopping.
Establish a detailed return policy
Set customer expectations at the beginning by creating a return policy that covers every possible circumstance, from defective items to products damaged in the shipping process. Make this policy easily accessible by including links to it in your website footer and FAQ page, and clearly explain what the customer should expect if they need to make a return.
🌟Make policy returns easy for you and your customers by using Shopify’s free return policy generator.
Ensure accurate product information
Provide detailed information about your products to decrease the probability of returns. This includes using high-quality photos and writing thorough product descriptions that mention the materials, sizing, and dimensions.
Incentivize customer reviews
Reviews help shoppers make informed purchasing decisions and reduce the risk of buyer’s remorse. Incentivize and encourage product reviews by offering discounts to verified customers who leave reviews. Make it easy for customers to leave positive reviews by integrating a product review app.
Minimize damage in transit
Consider how your product packaging design can help prevent damage during transit. Use bubble wrap, foam sheets, and fragile labels to keep your product safe and intact, reducing the chances of returns due to damage.
Stay vigilant against fraud
Unfortunately, return fraud does happen and costs your business money, but your RMA system can help track suspicious activity from serial returners. Some point-of-sale systems—like Shopify POS—help you monitor who is making excessive returns and track the items they’re returning.
Return merchandise authorization FAQ
How does a return merchandise authorization work?
The RMA process lets customers easily make returns and offers refunds, repairs, or replacements. Return authorization monitors which items are returned most often so you can make adjustments to your product offerings, suppliers, and quality control processes.
Why do I need an RMA?
An RMA system lets customers return items seamlessly and gives businesses a structure to monitor and track those items. A uniform return or exchange process also streamlines work for your customer service team.
What is a return merchandise authorization form?
Businesses provide return merchandise authorization forms so customers can initiate the return process. You can preemptively send this RMA form with the original purchase order or email it if a customer requests a return. The form typically includes product information, customer information, and a section to provide the reason for the return.
