According to research conducted by Brightpearl, an omnichannel retail management software company, 44 percent of United States retailers have seen an uptick in serial returns over the last year. Serial returners—those who frequently buy and return clothing or merchandise—can wreak havoc on a retailer’s margins and it’s best to get ahead of the problem. Here are a few ways companies can protect themselves against the pitfalls.

Change Return Policies

To combat serial returners, many big-name brands—including Amazon, ASOS and Harrods—are essentially blacklisting customers associated with too-high return rates. In May 2018, Amazon led the charge with a change in policy that deactivates the accounts of customers who request too many refunds. In Germany, online fashion brand Zalando has started to charge return fees in certain markets and is experimenting with single-use tags to quell the return of used, non-defective merchandise.

Leverage Technology

Companies like Appriss Retail and Brightpearl are leveraging artificial intelligence to examine customers’ purchases and behavior. By calculating thousands of unique statistics, the technology compares a consumer’s buying history to his or her pattern of refunds, flagging those individuals who exceed a certain amount and using AI to make an empowered decision on whether to accept the return. In 2018, Appriss says its platform, called Verify, helped reduce return losses for its customers by an average of 8 percent.

Take A Page From Another Brand’s Book

Following Amazon’s lead, ASOS and Harrods will now ban shoppers who are flagged in their systems as serial returners. The move may sound extreme, but it’s a necessary pivot, according to Brightpearl, whose reporting shows that retailers feel lifetime embargoes on notorious shoppers are not just the best way to protect slim margins, but also save time and money on the administrative resources that are consumed when processing such a high volume of returns.

Leverage The Secondary Market

Even with the evolution in retail policy and AI-powered technology, brick-and-mortar and ecommerce brands alike will need to deal with regular customer returns. Offsetting return-based revenue loss is made easier with a platform like the one B-Stock offers: a technology-based and data-driven online marketplace where retailers sell their used and returned merchandise to a secondary market of vetted buyers. Nine of the top 10 U.S. retailers are currently using our online auction marketplace solution. A B2B online marketplace not only drives a faster sales cycle and helps move unwanted inventory, but also makes it possible for retailers to earn the highest price possible for their liquidation stock. This can significantly alleviate the financial burden that’s created by serial returns.

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