Returns Don’t Have To Be a Cost Center With Virgil Ghic From WeSupply

Most retailers view returns as a necessary evil. You have to offer returns to stay competitive, but accepting unwanted or damaged products—and shipping replacements—drains resources and wastes time. What if it didn’t have to be that way?In this episode, Virgil Ghic, co-founder of WeSupply, makes a bold claim: returns don’t have to be a cost center. In fact, with the right strategy, they can even drive revenue! The importance of designing your returns policyIf you want returns to be profitable, you can’t just implement a cookie-cutter policy. Virgil explains, “If [you] are just offering a 30-day return policy, no questions asked, the chances of making it profitable are none. Most likely you're just going to lose a lot of money. But if you are designing the experience, designing the outcomes, designing the logistics behind the scenes … then you're going to have a profitable [policy]. Even if it's not profitable, you are going to decrease the cost significantly.” How to make returns a revenue driverVirgil shares two ideas for making returns profitable: encouraging customers to choose store credit and allowing in-store returns.Store credit. To encourage buyers to shop from your store after making a return, Virgil recommends incentivizing store credit rather than cash back. “[Let’s say] you have a $100 item that you are exchanging for an $80 item. You can offer [the remaining $20] as a refund, [or] you can offer $25 as store credit.” In-store returns. People who walk into the store to return a product usually end up purchasing something else. So if you have brick-and-mortar locations, make sure the in-person returns experience is smooth and convenient.Data is everythingOf course, the best way to handle returns is to prevent them in the first place. For that, you’ll need data—lots of it. “If you have the data, you can look into it and … analyze it. You can take action on it.”For example, consider a dress that lots of people return because of sizing issues. “[Saying] it doesn't fit doesn't tell you anything. … If we are just asking the customer [is it] too big or too small, that's not actionable. Nobody knows what to do with that data.”The solution? Get specific. Ask the customer exactly why the fit is wrong, then adjust the dress or refine the sizing description on your website. “[Once] you understand [the issue] … you give [the product] back to the merchandising team or the manufacturing team, and they can do adjustments. And they can maybe say on the website, this model runs big or runs wide.”LinksConnect with Virgil on LinkedIn: https://www.linkedin.com/in/virgilghic/Visit WeSupply’s website: https://wesupplylabs.com/