The term refers to the process of handling merchandise returns and properly crediting the customer's account. Though the returns function might be mundane, it's not an easy one to master. It requires reversing the direction of the supply chain, and that has implications for physical and information components of the business process. Returns can be a difficult puzzle for merchants that started out on the web, because they are physically separated from their customers and don't necessarily own warehouses or distribute their own goods. Worse yet, some choose not to give much thought to the issue at all, relegating the returns process to the status of afterthought.
Recent studies indicate that e-merchants can ill afford to neglect the returns process.
And, online customers are expressing concern with e-commerce return policies. Recent studies of Internet users by Jupiter Communications revealed that returning merchandise ranked fifth on a list of 12 sources of dissatisfaction with e-commerce sites. Amid this dissatisfaction is some hopeful news for web merchants. About 40 percent of respondents said that they would buy more online if they could return items easily. So, a function viewed by many merchants as a necessary evil could actually be transformed into a competitive advantage.