Returns are a fundamental aspect of the retail lifecycle, but they pose significant challenges for retailers. Not only do returns erode profits, but they also present a considerable risk to balancing customer loyalty alongside an increase in the potential for consumer fraud and abuse. With returns exceeding $685 billion annually, retailers must implement intelligent solutions that can effectively reduce the volume of returns, recoup lost profits, and streamline operational processes.
With more than half of all returns related to online purchases—specifically, buy online return in-store (BORIS) and buy online return online (BORO)—retailers need strategies grounded in data-driven insights rather than simply implementing stricter return policies that stand to alienate loyal customers.
As the number of returns increases and associated costs rise, there are now more opportunities for fraud as well as a heightened expectation for flawless customer experiences. Retailers must adopt intelligent return analytics to prevent customer experience crises and successfully build back their profit margin.
4 ways to unlock smarter returns using retail insights
1. Get a complete omnichannel view of return behavior
Retail returns carry costs that go far beyond lost sales, especially when you can’t see the full picture. With Engage Insights, retailers can move beyond surface-level reports to uncover the impact of returns across different channels.
Engage Insights empowers retailers to analyze receipted and non-receipted returns, BORIS (Buy Online, Return In-Store), BORO (Buy Online, Return Online), and claims/appeasements across every channel. This comprehensive approach delivers a full picture of return behavior, enabling smarter return strategies, improved operational efficiency, and a better customer experience at every touchpoint.
With these insights, retailers can identify trends, uncover inefficiencies, and make data-driven decisions to reduce return-related losses regardless of channel, all while still protecting customer loyalty. Optimized return strategies not only streamline operations and lower costs, but also contribute to sustainability goals by minimizing waste and reducing the environmental footprint of returns.
2. Detect emerging patterns that drive up returns
Retailers can actually proactively prevent product returns by simply just knowing where to focus their attention. With the assistance of AI and analytics powered retail intelligence, retailers can identify recurring issues such as product damage, packaging defects, and inconsistencies in marketing messaging or execution.
Retail intelligence provides insights into frequent returns and helps identify specific SKUs that are often stolen and flipped for cash, or returned due to product defects or misaligned customer expectations. These activities open the floodgates to increased instances of “wardrobing,” or “renting”, where consumers purchase an item, use it, and then return it for a refund, and “bracketing,” which involves buying multiple products to try out and returning most—or all—of them.
3. Use AI to help fight retail fraud, abuse, and organized retail crime
Returns fraud has become a sophisticated practice that has moved beyond simply attempting to return stolen goods to earn some quick cash. Additionally, ORC groups are exploiting weaknesses in returns systems to steal merchandise, infiltrate the gift card fulfillment process, and convert a retailer’s own stolen goods back into cash lining the criminal’s wallet.
Retail intelligence allows retailers to expose the standalone business unit that is returns fraud to see how everyday consumers are gauging profit margins through acts like wardrobing and bracketing.
Since fraud is both an art and a science, retail business intelligence solutions like Engage harness behavioral insights—not just strict rules—to detect risk. Engage is uniquely equipped to help identify returns fraud by employing AI to analyze return histories, recognize patterns, and detect transactional anomalies in real time.
This real-time analysis provides store associates with the store intelligence and immediate guidance they need to approve, flag, or escalate a return or claim. As a result, actual fraud can be addressed early, preventing loyal customers from being penalized for isolated behaviors that a rules-based system might mistakenly identify as problematic.
4. Improve the customer experience while reducing your returns volume
Smarter returns aren’t about stopping valid returns and dissuading legitimate customer concerns from being addressed – they’re about using the returns channel to balance profitability with shopper loyalty. With real-time retail intelligence, returns become less of a transactional act and transform into a testing ground for improving inventory placement, marketing, and merchandising strategy.
Store intelligence powered by Engage from Appriss Retail protects your customer-facing employees from the burden of defending antiquated blanket return policies that may alienate loyal customers. Instead, it uses AI-driven insights to help guide decisions, reducing one-on-one policy disputes at the register or call center.
Furthermore, retail intelligence’s freeing of the returns process leaves more opportunity for store representatives to focus less on the minutiae of a return and instead focus on creating more opportunities to use the return transaction as a path towards increasing profits and boosting loyalty with intelligence incentives.
To learn more about minimizing returns to enhance profits, reduce fraud and abuse, and gain insights that influence the overall cost of returns, discover more about Engage Insights.
