In the domain of e-commerce, shipping, and logistics, RTO or Return to Origin is a commonly heard term. To put it simply, it’s a package’s non-deliverability or rejection and its subsequent return to the seller’s address.
How RTO affects logistics?
Logistics and transportation have a crucial role to play in the growth and success of every business. The primary goal of a business’s logistics and transportation is to ascertain timely and safe delivery of packages or goods from the store to the customer’s address. But often, many businesses forget to consider “reverse logistics” which refers to the processes involved in sending the packages or goods from the customer’s address to the store or warehouse.
Simply put, RTO is when a customer returns a product that doesn’t meet expectations or is defective. Since customer satisfaction depends heavily on reverse logistics, businesses need to focus on it rather than forget or neglect it.
Adverse effects of RTOs
The more RTO packages are there, the more will be the losses for businesses because they’ll:
- Have blocked inventory when such packages are stuck in transit.
- Need to bear the additional costs for reverse shipping.
- Have to perform manual quality checks of the returned products and repackage them.
- Face extra operational and resources costs for processing every order that’s returned or cancelled.
- Be at an increased risk of products getting broken or damaged as they’re shipped back and forth.
All these make it important to reduce RTO rates. Here’s how businesses can do it.
Steps to handle RTO packages efficiently
Such tracking provides the end-user with an updated status of the order he/she has placed. For instance, when you purchase an item from Amazon, you’ll be given a URL to check when the product has been shipped, when it reached the nearest hub, where exactly it is – in transit or out for delivery. Businesses can select a logistics management software (LMS) to provide their customers with real-time tracking and the utmost transparency about where their order is or how to contact the delivery person.
Call customers to qualify the order and dispatch it quickly
It has been seen that customers sometimes place COD orders and then refuse to accept them, thus increasing the sellers’ cost, as they have to bear the return shipping charges. RTOs due to such fake orders can be a big problem. One effective solution is to call the customer right after the order has been placed to verify it and reduce the time between dispatch and delivery to ensure low rates of RTO. This is what Dr. Vaidya’s – an Ayurveda brand based in India does. Since the company has to handle a low average order value but a high number of orders, it makes frequent calls to the customers from the time their orders are placed. Some companies also take photographs before sending packages. These steps help to reduce RTO rates effectively
Giving customers flexibility and choices for their order delivery
Allowing customers to select their delivery time slots or even change them in case they won’t be available at the address on that date can help reduce RTO rates. Businesses may even give them other delivery-related options, say where they authorize a neighbour or the building’s security guard to receive the package on their behalf. Since a business’s logistics partner will send the package back to it after two to three failed deliveries, it pays to ensure the customers know in advance when their package is going to be delivered to make the necessary arrangements accordingly or request a change in the delivery date or time.
On-time and safe delivery
Since many businesses these days offer same-day or next-day deliveries, delayed deliveries are one of the biggest reasons for customers returning their orders. For instance, if a buyer has ordered a specific dress for Diwali, but it didn’t get delivered by the occasion, she would obviously raise a return request. This makes it important to ensure timely deliveries. At the same time, getting the products safely into the hands of customers is equally important.
Receiving a damaged product is another reason for high RTO rates. Damages may occur at the warehouse or during improper loading or unloading. Businesses can use logistics or transportation management software to tide over this problem. Such software will consider all the necessary parameters of the product, after which it’ll assign the right vehicle for its delivery aWith the above steps, businesses can surely bring down their RTO rates with efficient, on-time, and safe package deliveries.
With the above steps, businesses can surely bring down their RTO rates with efficient, on-time, and safe package deliveries. Through Xpresslane checkout, eCommerce websites can identify fraudulent orders and verify users opting for COD. Our clients were able to reduce RTOs significantly through our service.