The Top 5 Questions To Assess Your Returns Processes

No one wants to deal with returned goods. It means something
went wrong. The wrong item was shipped, a part was missing or faulty,
the customer was sold the wrong product or they changed their mind.

If you’re dealing with returns or repairs and wondering if it’s possible
to handle the logistical and financial implications more effectively,
ask yourself the following 5 questions to identify whether your processes
could benefit from automation.

Can we effectively control which inventory items get authorized
for returns and/or repairs?

For starters, your system should be able to document your policies for
handling returned items and whether you allow returns against all inventory
items or only some. If you do allow returns is it only for a specific
period after the date of sale or does the return policy last for the life
of the product?

The other aspect you need to control is how, when and where the customer
can return the item and how long it takes for the customer to return the
item. Good systems provide return instruction documents which provide
all relevant information to help your customer return items quickly and
efficiently prior to a predetermined deadline date. If the items are not
returned by the deadline date, the RMA will expire and the customer will
have to make another RMA request.

While it is important to have consistent policies to maintain control
over what items can be returned, it is also important to allow for exceptions
to those policies when an important customer calls and the situation warrants
an exception to the rule. In these cases, managers need the ability to
authorize returns by overriding the system-based return policies. This
is all part of good customer service.

Can we effectively communicate the status of our returns process
when customers call?

The returns process is primarily a management process that requires a
series of pre-defined steps or tasks (what can be called a workflow) in
order to ensure that returns are handled properly. In many cases, an RMA
needs to be created, items shipped back, received and inspected before
any accounting transaction is generated. All of these steps need to be
documented so our customer service representatives can communicate effectively
with customers if and when they call. Having happy customers is really
about setting realistic expectations and then managing their expectations
through timely communication. Customers are usually reasonable if they
know we are managing the process and can provide accurate information
as to the status of returned or repaired goods. If you can set up a workflow
of steps that documents your returns and repairs processes, you will handle
these internal processes more efficiently and be better equipped to communicate
the status and results of these processes with your customers.

Can we identify recurring problems with stock items and pinpoint
the types of issues we are having if we need to go back to our suppliers
for restitution?

A good system can identify and document the reasons for returns and repairs
which will lead to improvements that save time and money. If a supplier
is providing faulty products or missing parts we need to know this before
it affects our reputation with customers. If items are being damaged in-transit,
we need to know whether our shipper is at fault for improper packaging
of items or whether the freight forwarder is causing the damage. It is
also useful to have reports from the system which highlight return rates
by items and by customers so it is easy to spot a high incidence of returns.
We may find that customers are taking advantage of generous returns policies
as a way to “test-drive” products with no intention of keeping them.

Can we generate Replacement Orders and/or Credit Notes for customers
on a timely basis and update our accounting system without re-keying data?

The ideal RMA system is tightly integrated with Sales Order processing
and Inventory Control so any transactions that result from our returns
and repairs processes are seamlessly updated in the accounting system.
This level of integration allows creation of immediate Replacement Orders
in the Sales Order system to replace items that were damaged in-transit
or may be critical to our customers. This also allows other items to be
added to the order if there are other pending sales orders for the same

In this scenario, processing of Credit Notes can be delayed until after
the item has been returned and inspected. When a Credit Note is created,
it will automatically put the item back into stock or place it in a designated
“quarantine” area for refurbishment or repair before being put back into
resalable stock.

Having the ability to designate stock to a designated “quarantine” area
in the warehouse as part of the Inventory Control system provides information
on the quantity and dollar value of returned items to be refurbished so
we can see how much money is tied up in returned inventory at any one

Can we determine how long it takes to complete the returns/repairs

Since handling returns and repairs is a management process that can involve
significant resources, we need to streamline the process as much as possible.
An RMA system will document the time between creation and completion of
RMA’s so we can see where any bottlenecks in our processes are. By recording
when items were received from our customers or third party repair depots,
we can also see whether time lags are due to processes outside of the
company that are influencing the time it takes to create and complete
returns and repairs.

Automating your returns and repairs processes will improve customer satisfaction,
reduce inventory handling costs and eliminate redundant data.

If you have needs in this area of your business, please ask us about
the RMA solution for SAGE ACCPAC ERP by e-mailing your request to

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