The Plague of Ecommerce

The Plague of Ecommerce Return Rates and How to Maintain Profitability

E-commerce returns can be a disease-aggressively attacking profit margins, gutting conversion rates, and ultimately threatening your business.
Collectively, consumers returned products worth $428 billion in 2020 just over 10% of total retail sales. The National Retail Federation estimates the cost of returns amounts to $101 billion.
It paints a bleak portrait, especially for online retailers. But the real cost driver is this: many customers buy with an explicit plan to immediately return some or all of theiritems. In response, businesses are adding workers, increasing warehouse space, and establishing separate departments to handle reverse logistics. Returns are the new normal and central to customer experience. But they dont have to be a plague.
Industry estimates say there is a 30-50 per cent rate of rejection of orders by customers who opt for cash on delivery. This, in turn, doubles courier charges and adds to storage costs, thus eating into the e-tailers margin. You see 1 out of every 3 orders are returned to the warehouses.
When theyre returned, theyre called Return to Origin (RTO) in the e-commerce world. So how does it affect you as an e-commerce entrepreneur? Well, you have to bear forward and reverse logistics costs.
Forward Costs is the regular shipping fee charged to deliver your package. Its a loss for you because this order is not a sale anymore.
In a sale, you can easily place the shipping burden on your buyer by including shipping in your products. Worried? There’s more.

You may also lose a ton of money on operational costs for :

1. Processing such orders
2. Physical Quality Check
3. Re-packaging of Returned items
4. Damage caused to Fragile items
5. Items lost or stuck in transit.
We wanted to understand the root cause of this problem and its impact on the market.
So, we carried on market-wide research. This then gave us real data to support our solution. Without waiting, lets dive right into some of the findings.
If you dont get to the root of the problem, it will continue to grow  Anthony Angelo There are two popular ways to solve this problem and

they are as follows :

The first is Disable COD on site While this is a stop-gap solution, it does not solve the problem.
Moreover, order volume reduces drastically when you disallow COD orders. Thus, it decreases your turnover And The second canceling some areas with high returns is not a solution ,too, because you will lose a lot of customers and therefore the solution must be focused only on fraudsters
So we have created a system that does this analysis and makes it automated.
As a result, you can focus on scaling your business while we take care of the COD check.

The Birth of “risk black list extention”:

We resorted to developing this extension because when we made a blacklist of fraudulent customers in our platforms of delivery companies in some countries, we were legally attacked by fraudulent customers under the pretext of defamation, even though they violate the laws of e-commerce and They are evading their promises , since the delivery companies face the risk of judicial follow-up of fraudulent customers, the merchants must share the data of these fraudsters so that all other merchants warn them, and this is done through the riskblacklist Extension
Using the data that we gathered from our research, we have come up with a Machine Learning based solution This extention helps e-commerce stores weed out RTO prone orders, What makes it so unique is that its an automated scalable system.
risk black list extention is a big data-powered platform. So with data, it helps you detect orders that have high RTO probability.

This is what risk black list extention will do in the back end :

It collects data about fraudulent customers automatically from the stores of delivery companies, and when you enter orders on the platform of the delivery company, it shows an alert stating that this person has a number of canceled orders before and also shows the number of orders received by him and through this information You can decide if the customer who placed the order is trustworthy or not.
In short : This module can inform you if a customer has ordered again (and not accepted his order) to protect merchants for sending order to customers that dont accept their goods.
This module can be used for Cash on Delivery orders (to avoid returns on customers that dont pickup their COD order).
Can you see a high number of RTOs on your COD orders? How have you been dealing with it?
We verify the authenticity of your orders in real-time, so you can take action as early as pre-purchase.
Flagging risky orders & fraudulent users in real-time Increased delivery rates to 95% from the 1st week