Electronic commerce (sometimes referred to herein as “eCommerce”) is a growing sector of the U.S. and world economy. As with traditional brick and mortar purchases, eCommerce purchasers sometimes desire to return one or more of the items purchased. eCommerce purchasers are sometimes dissatisfied with the procedure with which eCommerce merchants provide for returning eCommerce-purchased merchandise.
Electronic Commerce returns and exchange processing has been inefficient for both the consumer and the online merchant. Electronic Commerce consumers have experienced slow, inconvenient, clumsy returns and exchange processes online. The experience contrasts sharply with consumer expectations that returning a product online should be as easy as ordering it online.
Many eCommerce merchandisers use a return authorization system for processing eCommerce-purchased merchandise returns. Unfortunately, return authorizations can often be difficult for the consumer to obtain and can take a long time to receive. In some cases, online stores require customers to call a customer service center to request a return authorization. Calling customer service for a return authorization is inconsistent with an online shopper's preference for doing business online.
Some online merchants, on the other hand, require shoppers to compose a return email request. As yet another alternative, some online merchants provide return instructions on the back of a packing slip, but may not accept return of every item in the shipped order.
After authorizing a return, the online merchant mails out an Authorized Return Service label, such as a UPS Authorized Return Service label. This return authorization process results in a slow return and refund or exchange.
Refunds for returned items are often cumbersome and can take weeks to appear in the returning shopper's payment card accounts. Exchange requests can take even longer, especially if the exchange item is out of stock.
Once a return is authorized and the customer has all of the necessary paper work, returning the item is not necessarily an easy matter for the consumer. Even if the returning customer has retained the box and packing materials for the item to be returned, most online stores do not provide an easy way for customers to pass the return package to a carrier. Some merchants provide UPS call tags inside each box they ship.
It would sometimes be more convenient for customers to return or exchange merchandise at a brick and mortar store. However, physical brick and mortar stores may not accept returns from their online siblings.
eCommerce-purchased merchandise returns can also be a problem for online merchants. An inefficient returns and exchange process that causes individual customer dissatisfaction may result in online shopper defection to online stores that provide higher-quality return and exchange services.
The various methods mentioned above of providing returns and exchange services are inefficient for both the merchant and the returning consumer. Processing return and exchange requests by telephone requires the online merchant to provide expensive facilities, staff, and training. Furthermore, a customer service call center cannot match the convenience of the Internet for an online shopper. Return requests by email, telephone, and paper forms are collected with manual processes and/or in non-standard formats. This makes generating returns reports an expensive data-collection chore which is subject to the judgment of individual customer service reps.
Further, the manual returns and exchange processes described above do not necessarily provide online merchants with returns information in a timely manner. For example, merchants may not know a return is coming until the returned package arrives. The return might be due to defective merchandise or poor packaging that caused breakage. While the first return shipment is in transit, the merchant continues to ship defective or poorly-packaged merchandise.
Each online merchant has its own policy regarding returns and exchange processing. For example, many merchants are willing to pay for all return shipping to provide high-quality service. Other merchants are willing to pay for some return shipments, but not for expensive or ill-justified returns. Still other merchants want to accept all or some returns but are not willing to pay for their return shipment.
According to one commentator, “[t]here's no easy way to solve the problem [of returns]. Internet companies fall apart on this.” (Melissa Barnes, The Yankee Group, in Internet World, Aug. 15, 1999.) Therefore, in order for eCommerce to prosper, a solution to managing eCommerce returns must be provided.