Returns are the new black: How retailers can manage the influx of returns

Written by Can Ozdoruk on Sep 12, 2019

Finding the best RMA software is only the beginning as the customer experience takes center stage

If you’re selling online, you’re dealing with returns. Companies have widely adopted Return Merchandise Authorization (RMA) software to manage this burdensome process, but AI is emerging as a powerful counterpart to increase customer satisfaction during the often tedious returns process. When used during the pre-sale process, AI can answer critical information related to sizing and care, identify potential returns based on items in a person’s cart to preemptively intervene, and, if a return is initiated, a virtual agent can keep a customer informed throughout the process, which increases the likelihood of future business. 

Returns are part of the business, leading to widespread RMA software adoption 

Returns are a key component of the online shopping experience. As eCommerce sales continue to skyrocket, topping $500 billion in 20181, so do returns (It’s estimated that over 30% of all online purchases are returned2. In fact, if you want to make money online, you have to have an effortless and often generous return policy as people base their decisions increasingly on how easy they can return something. Sixty-seven percent of online shoppers check the company’s return policy before shopping2

RMA solutions have become incredibly advanced. Companies like Return Magic, AfterShip Returns and other RMA software providers have eased the burden on operational teams to execute returns more easily and alleviate the pain points that marred the consumer experience for so long. However, as the sheer volume of returns is increasing at such an incredible rate, retailers are starting to look more holistically at the returns process to try and mitigate returns and ensure the customer experience is best-in-class throughout the process. As we look into 2020, AI-powered virtual agents will be a key technology in the returns management process.  

Optimize the Customer Experience Before Checkout

With estimates of return deliveries reaching $550 billion by 20203, trying to minimize returns will be a primary focus for retailers of all sizes moving forward. Improving customer service has become a lot more metric-driven over the last two decades. The latest customer service stats point to one key initiative: growing customer happiness predictably and at scale.

One way organizations are tackling this challenge is with artificial intelligence.

Companies are launching conversational AI Agents – you might know them as retail chatbots – to help customers throughout the online shopping experience to answer questions a person might have. With an easily accessible shopping assistant, consumers can feel empowered in their decisions and be less likely to have surprises when they receive an item.

AI Agents can take cues from real-time behavior to be able to anticipate when a person is not 100% sure of a decision. For instance, if a person has clicked on the size guide a few times, the company would presume that she is curious about which size she should get.  A virtual agent could preemptively reach out offering advice (This dress is small and will shrink a little in the wash. I’d recommend ordering up a size!). Research has found that sizing issues are a domineering reason that people return items, with 30% of items returned as they were too small and 22% returned for being too big4. If a virtual agent is deployed to help in these situations alone, the impact on the returns volume would be immense. 

Identify and court likely returners 

Forty-one percent of people buy variations of a product with the intention of returning items4. During the checkout process, a virtual agent could identify like products (i.e. the same product in various sizes or colors) and proactively send the customer a message to see if it could help to find the customer the right size (and also determine that the intention is not to gift a like item, but find the right one for themselves). Many companies might find that offering a 10% discount in this critical moment if the customer purchases only one size far outweighs logistical and inventory losses of managing a potential return.

Proactive Communication at every step of the journey 

Even with a powerful virtual agent running defense during the shopping and checkout experience, returns are inevitable. As your RMA solution takes care of the logistics, use a virtual agent to ensure the customer is always happy. During the returns process, happiness breeds from communication: 56% of people say they want notifications about the status of their refund and 50% want to know the status of their return package5

A virtual agent can keep a customer updated along various parts of the process through deep integrations with the RMA platform. It can automatically reach out with key information, while also enabling a customer to ask any follow-up questions they might have.  

While some RMA solutions might have the ability to send an email, they lack the ability to respond to any forthcoming questions without routing to traditional customer service channels. If a person comes back with “What happens now?” or “When will I see my money” to a note that their package was received, a virtual agent could immediately respond whereas if the customer was routed to an agent, there would likely be a significant delay in a reply and the CX would suffer.

Hyper-personalized Recommendations to Recover Lost Revenue 

In a recent study, 57% of people exchanged or replaced the last item they returned 5, but not necessarily with the same retailer. 

A virtual agent can provide hyper-personalized recommendations to spur replacement purchases by following up at the optimal time during the returns process (for some companies this is after the refund has shown up in an account, while others this might be when the package is on the way back to the distribution center). Machine learning technology can identify patterns based on consumer profile attributes and cross-analyzing with items returned in order to hyper-target recommendations. Customers would enjoy their own virtual assistant that curates individualized recommendations.  

Returns are not going anywhere

Returns are a necessary part of doing business online today. Accepting returns and offering a generous returns policy, is the way to make money. In fact, 96% of shoppers will shop with a retailer again if the returns process was easy 5.  For retailers, optimizing the returns process goes well beyond finding the best RMA software to manage the back-end. It takes a holistic approach to the entire customer experience. Bringing AI customer service into the customer experience pre-checkout and proactively keeping the customer informed throughout the process can elevate the customer experience and keep customers happy and coming back.

Can we discuss how we can marry our AI with your best-in-class RMA software to keep customers satisfied during the returns process? Let’s chat. 

To get more of our insights on retail customer service before you contact us to request a demo.


  1. Internet Retailer: US ecommerce sales grow 15.0% in 2018, February 28, 2019 
  2. Invesp: E-commerce Product Return Rate – Statistics and Trends [Infographic]
  3. Stastisa: Costs of return deliveries in the United States from 2016 to 2020 (in billion U.S. dollars),  Jun 18, 2018
  4. Return Magic: The State Of Online Returns In 2018 
  5. Narvar: The State of Returns 2018: What Today’s Shoppers Expect