It’s a fact: nobody likes returned orders. They’re a pain and can be very expensive. As a food supplier, the three main costs of returned orders are the cost of the refund, the cost of distribution, and the cost of lost time.
In more detail:
- The cost of the refund. This is the cost of the loss of the sale. If it was a $500 order, chances are you’ll be eating most, or all of that cost.
- The cost of distribution. This is the cost of transporting the product to the consumer originally, PLUS the cost of picking it up again and getting the new product to the customer. You are paying double the distribution costs when dealing with a returned order.
- The cost of lost time. This is the cost it takes for time the employees it took to deal with the returned order, therefore the time taken away from working with a new order or customer.
Of course, the best practice for managing returned orders is to prevent them all together. Here are our tips for minimizing the probability of receiving returned orders:
The biggest key to reducing order mixups and minimizing the chance of a buyer receiving something they did not order, is to be organized. Having a centralized platform where you can see all incoming and outgoing orders, allows you to keep track of what needs to go where, when. (We wrote an article on reducing order mixups.)
2. Implement a pre-shipment quality check
The most common cause of returned orders is product quality. Product consistency is really important to customers, so if you’re not checking each order as it’s packed, it’s possible you’ll send out sub-par products that don’t meet customers expectations.
3. Provide descriptions and photos of your products
Often, customers order something thinking it will be one way, when it’s actually something else. When selling online, it is important to remain transparent and provide sufficient description and photos of your products to eliminate confusion. You can make this documentation process part of your pre-shipment checklist.
4. Minimize quality changes during transportation
Product temperature and time on the road are the two most important factors that ensure product consistency. There are strict health regulations in place so food stays safe during transport, which means poor temperature control can not only be dangerous, but aesthetically, it can lead to chemical reactions that alter the appearance or texture of a product (Akkerman 2010).
Sometimes things happen and even when considering all of these measures, customers can return their orders. When handling returned orders it is essential to put the customer first. Respecting your relationship will increase the likelihood of them reordering from you in the future.
If you do receive a returned order, here are our tips to make that process as smooth as possible:
1. Provide contact information
Designate one contact person to deal with all returned orders. Delegating the position to one specific person, makes it easy for customers to know who to contact and reduces the chance of the email or message to be lost. Also, if one person is dealing with all returned orders, the methodology will be more consistent. Make sure this person loves making customers happy!!
2. Even if it’s not your fault, apologize for the issue.
Even if it wasn’t 100% your fault, let the customer know you hear their concerns and that you’re going to help them. Fighting with a customer over a returned order will only lead to tension. Also, you don’t want an unhappy customer posting about their negative experience on different platforms.
3. Have an accepted returns time-frame
As food is different than other products people order online, in that is has an expiry date, only accept returns that are within a reasonable time frame. If a customer ordered lettuce from you a week ago and are complaining that the lettuce is expired, the complaint should not be your responsibility.
4. Offer store credit
This method gives the consumer the freedom to get a new version of what they already ordered or order something else. You are putting the ball in their court, however still ensuring that sale remains in your business. If a customer is insisting for their money back, offer that. It is essential to keep the customer happy.
Being able to provide good customer service is important for maintaining your customer-base and growing your business. Don’t let people slip through the cracks.
Ensure profitability on all of your delivery orders
Download our Minimum Order Calculator to calculate hourly distribution costs, your break-even point and target profit:
Nina Galle writes blog posts, templates, free tools, and other helpful resources for farmers and markets.