How to optimize your return merchandise authorization process (RMA)
Kelli Trapnell
·April 14, 2023
If you’re an ecommerce brand, odds are good you’ll need to process returns at some point (especially since returns increase as sales increase). That’s why it’s important to know about the RMA process and what all goes into ecommerce returns.
Learn more about how returns impact your brand’s growth in the Future of Reverse Logistics
In this blog, we’ll cover:
- What is RMA, and why does it matter?
- What happens during the RMA process
- Ways to save on refunds
- Integrations to boost RMA
Let’s start with the basics. What does RMA mean, anyway?
What is RMA, and why does it matter?
A Return Merchandise Authorization (RMA), also known as return material authorization or RGA (Return Goods Authorization) is the first step of the return process for an ecommerce company. RMA is an important tool in reverse logistics. RMA allows your business to collect shopper information, personalize the process and gather info about any recurring product issues.
Once you create an RMA, then you’ll need to ensure your return policy is easy to understand. Clearly define what can be returned, the time frame allowed for all returns, the warranty period and accepted return reasons. Creating a transparent policy will ensure you don’t risk angry shoppers and will avoid confusing warehouse workers.
The next step in making returns a positive experience for your shoppers is to ensure efficiency and begin the return as quickly as possible.
What happens during the RMA process
Once a buyer submits their information, the item acquires an RMA number, which helps track the package’s path.
Usually, an item will fall into one of three categories: a refund, replacement, or repair.
Most ecommerce brands use a returns management solution like Loop to handle their returns. Automating this step of the RMA process can help, because you can save time, money, and also gather data about each shopper.
Typically, an RMA form will capture the following info:
- Personal information: This will include the shopper’s name, telephone number and address.
- Product data: This will be a request for the SKU, type of product, and quantity being returned.
- Reason for return: This will ask why the product is being returned.
- Return or refund: What the shopper prefers. You could offer store credit or exchange in lieu of a full-out return.
When collecting data at this stage, make sure your RMA system gathers as much info as you can. Was the shopper simply looking to make an exchange for a different size or color? Do they need a different item that will fit their needs better? Do they feel the pricing didn’t quite match the value?
Once the return request has been received and approved, a business will assign the item an RMA number to authorize a product return. The authorization number helps track the product as it’s processed. It also allows warehouses to update their inventory management software, otherwise known as an ERP (enterprise resource planning) solution, a management system that handles all activity and functions. The shopper will usually receive a shipping label or have the option to provide their own.
The returned item will then ship back to the warehouse. Once it arrives, the item will go through a quality control inspection. If any repairs or replacements are necessary, this can incur restocking fees.
Ways to save on refunds
Be sure you’re able to cover the cost of returns or include this in the process. Many companies can save revenue by charging shoppers for the cost of a return. For certain items, such as beauty products or perishable items, the simplest solution is a “no shipping” policy.
This simply means you offer an instant exchange and allow the shopper to keep the item. To avoid fraud, be sure to have shoppers submit a photo of the item. This allows your online store to provide them with an instant refund.
Virtual wallets have become a more popular means of payment for online stores. For returns, consider adding a virtual wallet feature. Firstly, it will make it easier to instantly refund the shopper vs. sending the money to their card or bank account. Secondly, this prevents your company from losing revenue despite the refund. This type of feature adds a section to every user account and holds equivalent cash value which they can use to pay for item purchases. Ultimately, it makes the entire checkout and returns process more efficient.
Integrations to boost RMA
Any ecommerce business looking to grow should remember that RMA is vital for a successful product return process. From the start, you should clearly communicate with the shopper to understand why they returned the item. Having an RMA number will help you keep track of inventory and prevent revenue loss. Loop Returns offers several systems to keep everything running smoothly.
Our Full Circle integration creates the RMA for you. Once the product has been received, and an item receipt is created within Full Circle, the integration again leverages the Warehouse API to trigger a process or flag event. Loop also has an RLM Apparel Software integration that requires no developer work on the merchant’s end.
Just because the buyer is returning the item, doesn’t mean they won’t want to shop with your brand again in the future. You can easily turn a return into another sale with upsells, personalized exchanges, or a bonus credit if they spend more on a higher-value item.
Be sure to review your return policy. A recent survey found that 96% of consumers regularly review a retailer’s return policies before making an online purchase. If your company lacks a well-thought-out plan, you might be losing out on new buyers, and dissuading existing shoppers from buying from you again.
A simple and easy returns process, along with high-end customer service, will ensure that shoppers return in the future. In that same survey, 87% said they would be more likely to buy again from a business if they know they would receive post-purchase incentives like discounts on future items or an unlimited return window.
Don’t forget to collect data about product returns. This will provide insight that can help you lower future return rates. If shoppers are frequently returning an item due to a sizing issue, make sure you note on your website that the product runs small. Allow shoppers to provide insight when they start the return process so you can understand trends across categories and reassess your strategy and RMA process.
Want to streamline your returns management process? Contact Loop for a demo.
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