Do you know that an AI algorithm can scan 300+ parameters to identify & flag risky orders, all within 200ms from order placement?

You might ask us what’s the use of such an algorithm when you can manually understand the Steps to Handle a Return to Origin Cases, right?

With such a feature, D2C brands have been able to outperform their competitors in terms of order volume and profit margins.
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Let the numbers do the talking:

1. Brands have increased prepaid orders from 25% to 35%.
2. 60% reduction in RTOs.
3. 35% reduction in NDRs.
4. Reduce info-related RTOs by 45 to 60%
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With such numbers, the D2C brand will be exposed to better profits and help in building its base of loyal customers over time.

In this blog, we’ll discuss such strategies and steps that will help you achieve similar numbers for your brand, or maybe even better:)

Let’s head straight into how to Handle Return to Origin cases in India.

Return to Origin- Why it Happens, Its Impact, and How to Solve it?

What is Return to Origin (RTO)?

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Return to Origin (RTO) is a term used in e-commerce and logistics to describe the return of a package to the sender because it could not be delivered to the customer.
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When a package is returned, the shipping carrier will send it back to the sender's address. 

This can be a costly and time-consuming process for the e-commerce brand, as they will have to pay for both the forward and return shipping costs, without getting paid for it.

Top 5 Reasons Why Return to Origin Happens

The condition of an RTO can happen for a variety of reasons, including:

• The customer is not available to accept the package.
• The customer has refused the package.
• The address is incorrect or incomplete.
• The package is in damaged or undeliverable condition.
• Non-compliance to delivery timelines by the logistics partner that led to cancellation by the customer,
  
  

RTO can be a major problem for e-commerce businesses, as it can lead to lost sales, customer dissatisfaction, and increased costs.
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Generally, D2C brands can reduce their RTO rate by taking smaller steps such as:

• Providing accurate and complete shipping addresses.
• Communicating with customers about their deliveries.
• Offering flexible delivery options.
• Having a clear and easy-to-follow return policy.
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We’ll understand more about the ways to reduce RTO in detail in the sections below.

But one thing is for sure, RTO is a complex issue with a variety of causes and consequences. However, by working together, e-commerce businesses and shipping carriers can reduce RTO rates and improve the customer experience.
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Steps to handle RTO packages efficiently 

You must have heard the phrase: Returned to Origin at shipper's request, but what does this mean?

With RTO causing extra challenges, as a D2C brand, some simple yet powerful ways can make sure that you provide users with a better experience and ultimately lower the RTO count for your brand.

A 60% reduction in RTOs has been seen with brands since they implemented Pragma’s RTO suite. Let us help you with some of the methods they used below:
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Step 1. Identify the reason for the RTO

The first step in handling RTO packages is to identify the reason for the return. 

This information can be obtained by reviewing the RTO report, which typically includes details such as the reason for the return, the customer's contact information, and the return shipping tracking number. 

If the reason for the return is not clear from the report, you can contact the customer directly to inquire. Now let’s understand how to Handle Return to Origin cases in India:

Common reasons for RTO include:

• Incorrect or incomplete address: This is one of the most common reasons for RTO. Ensure that customer addresses are accurate and complete before shipping orders. Having a good RTO suite can automatically help you identify wrong pin codes/addresses.
• Recipient unavailable: This can happen if the recipient is not at the specified delivery address during the delivery attempt. 

Offering flexible delivery options, such as scheduling delivery dates or allowing recipients to redirect packages to alternative locations can be provided by the logistics partner to avoid RTOs for such reasons.

• Refusal of delivery: Product dissatisfaction, discrepancies in order details, or unexpected delivery charges may give rise to this reason for RTOs. 

Implement clear and concise product descriptions, provide accurate order information, and inform customers of any applicable charges upfront.

• Damaged or undeliverable package: This can arise due to improper packaging, mishandling during transit, or exceeding shipping carrier restrictions. 

Use high-quality packaging materials, collaborate with reliable shipping partners, and ensure products adhere to carrier guidelines.
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Step 2. Take action to address the cause of the RTO

Once the reason for the RTO has been identified, take steps to address the underlying cause. This may involve implementing changes to product quality, packaging, or shipping processes.

For product quality issues

Review product design and manufacturing processes to identify and rectify defects. Conduct quality checks throughout the production process to ensure product consistency.

For packaging issues

Use durable packaging materials that can withstand transportation and protect products from damage. Customise packaging to fit product dimensions precisely, preventing items from shifting or becoming damaged during transit.

For shipping process issues

Collaborate with reliable shipping carriers who prioritise package safety and timely delivery. Implement track-and-trace systems to provide real-time updates on shipment status and proactively address any delivery concerns.
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Step 3. Process the return promptly

Efficient RTO processing involves inspecting the returned product for damage, issuing a refund, and restocking the product if it is in saleable condition.

Inspection

Carefully examine the returned product for any signs of damage, such as scratches, dents, or missing components. Document any damage observed during the inspection, as this may be relevant for warranty claims or supplier negotiations.

Refund

Process the refund promptly under the company's return policy. Communicate the refund details to the customer, including the refund amount and estimated processing time.

Restocking

If the returned product is in saleable condition, restock it in the inventory for future sales. Implement proper inventory management practices to ensure accurate tracking of returned products and their subsequent disposition.
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Step 4. Communicate with the customer

Maintaining open communication with the customer throughout the RTO process is crucial for maintaining customer satisfaction and building trust in the brand.

• Inform the customer about the status of their return, including the estimated time for inspection and refund/exchange issuance.
• Address any concerns raised by the customer regarding the return process or product quality.
• Provide clear instructions on how to return the product, if applicable.
• Express appreciation for the customer's feedback and willingness to return the product.

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Step 5. Track your RTO rates

Regularly monitor RTO rates to identify trends and potential areas for improvement.

• Analyse RTO data by product category, shipping carrier, and reason for return to pinpoint specific areas that require attention.
• Set benchmark RTO targets and track progress towards achieving these goals.
• Implement corrective actions based on RTO data insights to reduce return rates and optimise shipping processes.
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How Does Return to Origin Impact Online Businesses?

Managing an RTO has never been easy. Any RTO that is initiated simply means an extra associated cost:

1. Cost of managing return pickup via delivery partner.
2. Cost of examining the returned items.
3. Cost of re-shipping the product/ initiation of a refund.
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Let’s understand in detail what challenges can arise due to RTO orders below:

Increased costs for business

With studies revealing that 20% of business profits are eaten up by RTO orders, it’s a matter of concern to control RTO orders. This means if an RTO is initiated, then there are chances the brand might end up losing significant money on that order as the customer gets a refund in many cases.

The cost of RTO includes reverse shipping costs, as well as the cost of processing the return and restocking the product. 

One such increased cost that arises for businesses to manage is the cost associated with reverse logistics.

Without reverse logistics in place, you can’t manage a return order as your system will lack workflows and a return delivery partner.

In some brands, these are managed by the same delivery partner, and in some, they have different partners for return orders and deliveries. But the commonality is, they both will charge you an extra amount for picking up the return and dropping it to your assigned place.

This system handles the collection of returned items, whether it's for restocking, recycling, or disposal.

Reduced customer satisfaction

Customers who experience an RTO may have a negative experience about the product and the brand. 

What this also means is that a failed delivery due to Non-Delivery Reports (NDRs) can frustrate customers and negatively impact their overall shopping experience. This can result in decreased customer satisfaction, potential loss of future sales, and damage to the brand reputation.

Increased inventory blockage

RTO products can block up inventory and make it difficult to track and manage inventory levels. 

What this means is that a system that can help you track incoming orders from all channels via an omnichannel approach, and help you keep a record of all the returned items in your inventory. 

Such tracking is possible by having an Omnichannel CRM in place that brings all the conversations onto a single platform, helping to avoid stockouts or overstock situations, unlike a multichannel approach.

Increased risk of product damage

RTO products are often handled more times than products that are delivered successfully, which increases the risk of damage. 

A high number of returned products can be a sign that there are problems with the quality of the products or the packaging. 

This should be an early sign that the brands need to regularly check and improve these areas to reduce the number of returns and keep their customers happy.

Fraudulent returns

There are customers with the sole intent of benefiting themselves without paying a single penny. Such customers may attempt to return products fraudulently, which can lead to lost revenue for businesses.

There should be strict checks like open box delivery and others that open the product in front of the customer and record so that such fraudulent returns don’t arise.

Ways to reduce the return to the origin

With countless challenges rising every day to manage returns, it becomes tough to keep an eye on the details of the product and supply chain.

Yet, there are ways to better manage these returns. 

Trust us, nothing expensive, just some basic checks can help you reduce up to 25-30% RTOs.

Let’s check them below

1. Improve the accuracy of shipping addresses

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One of the significant reasons why RTO cases are initiated is due to the shipping address being wrong. 

Brands should have software that can detect incorrect and incomplete addresses on factors such as:

• A minimum character length.
• Adding a landmark - compulsory field
• Asking for pincode to estimate the date of delivery, etc.

Pragma’s RTO suite uses an AI algorithm to scan 300+ parameters to identify & flag risky orders in real time. 

This helps in reducing RTOs caused by limited address information by 45 to 60%

When an incorrect or incomplete address is identified, immediate communication will be initiated with the customer to rectify the issue before dispatching the shipment.
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2. Provide clear and concise shipping information to customers

Informing the customer about where their order is; is an easy yet important way that brands use to reduce RTOs.

This includes providing customers with the following information:

1. Estimated delivery date
2. Status - Order confirmed, shipped, in-transit, etc
3. Tracking information - Current location of order with timestamps, order ID, etc.
4. On delivery date - The contact number of the delivery person must be provided so that the customer coordinates effectively with the delivery boy to collect the parcel.
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3. Offer flexible delivery options

Many delivery partners allow the customer to choose a specific delivery date and time for delivery of their order.

Why does this matter? - Supposedly the delivery boy attempts a delivery, but due to some reason the customer might not be available which would result in another delivery attempt on the next date - delayed delivery.

Hence, by selecting a specific date and time, the delivery partner can make sure they deliver the product as early as possible without re-attempts.

By making sure you provide a flexible delivery option, you can reduce the changes of returns that say, ‘Returned to Origin at shipper's request.’

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4. Have a clear and easy-to-follow return policy

Communicate your return policy to the customer in advance. This will help the customer be informed and make better decisions before the purchase.

Even post-purchase/delivery, they are aware of the circumstances when a product can be returned/exchanged, leading to lower return requests.

This policy should be communicated to customers on the company's website and in its order confirmation emails.
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5. Use technology to automate and streamline the RTO process

Technological introduction to your processes can benefit your businesses in all ways. 

In the context of reducing RTO, the use of technology can help you:

1. Flag impulsive buyers and wrong pincodes.
2. Identify areas of higher RTO.
3. Put restrictions on specific buyers - showcasing prepaid payment options instead of COD, personalised return policy for specific areas/buyers, etc.

This can help businesses to reduce the costs associated with RTO and to provide customers with a better experience.

Here are some additional tips for reducing RTO

• Implement return fees or COD fees: This can discourage customers from making unnecessary returns.
• Use COD prompts or captcha to ensure only genuine users place orders: This can help to reduce fraudulent returns.
• Invest in quality packaging: This can help reduce the risk of product damage during shipping.
• Partner with a reliable shipping carrier: This is important for ensuring that packages are delivered accurately and on time.
• Monitor your RTO rates and identify trends: This can help you to identify the root causes of RTO and take steps to address them.

Effortlessly Minimise Return to Origins with Pragma

With now us doing our part in helping you understand how to Handle Return to Origin cases in India, let us help on how Pragma’s RTO suite can help your business.

As a leader in the RTO Suite, it becomes important that we enlighten you on how D2C brands have lowered their RTO rates with Pragma’s RTO Suite.

With simple steps, Pragma helped Emami reduce losses for its COD payment method, where COD accounted for 85% of all their purchases.

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Moreover, brands have been able to analyse & detect RTO losses before they occur and reduce overall RTO losses by 60%.

You ask how?

With an RTO Suite that can:

1. Analyse data that helps flag impulse buyers, fake orders and orders made by bots.
2. Auto-verifying pincodes, addresses, numbers, etc.
3. User risk assessment to check for fraudulent behaviour, etc.

Looks interesting?

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