Return Merchandise Authorization – Challenge and Opportunity

There are many challenges facing reverse logistics in the modern retail industry. The increasing number of returns being driven by the proliferation of online shopping and customer practices such as wardrobing, and bracketing are increasing pressure on return departments daily.

In this article we will discuss what an RMA system is, what it does, and why any ecommerce brand worth its salt in 2022 needs to have one implemented.

What is an RMA System?

RMA provides businesses with a structured process which can authorize and facilitate the repair, return, and/or replacement of a product should it arrive in a condition not suitable for use, or if the customer changes their mind/no longer requires the product.

RMA is a unique number which is generated by your returns department when a customer files a request for a return. This number can then be used to track returns as they move through the process.

In short, an RMA makes it simpler for your organization to manage the ever-increasing volume of returns which are being requested by your ecommerce customers.

Of course, most businesses already use RMAs to track returns – even if they don’t realize that’s what they are, but a point of difference comes when ecommerce brands are able to deploy automation technology to work in sync with the RMA to provide smoother workflows for employees and additional services to customers.

For example, with RMA automation, customers can use your app to track the progress of returns and receive notifications to update them. Your returns department can also receive alerts to tell them when products have arrived and whether they are to be assigned resale or disposal status.

"A return merchandise authorization (RMA) gives businesses the ability to repair, replace, or return products if they arrive faulty or broken, don’t meet expectations, or if hardware breaks down in the field during the warranty period,” writes ServiceNow. “With ServiceNow Hardware Asset Management (HAM), gain support for your RMA processes with automated, prescriptive workflows to reduce manual tasks associated with tracking assets being returned or fixed in the field."

Amazon

For an example of advanced RMA technology in action, let’s turn to everyone’s favorite ecommerce juggernaut, Amazon. With, not only its own returns to facilitate, but also those of thousands of third-party sellers, Amazon understands the importance of a solid RMA system all too well.

“You will be prompted to either use the Return Merchandise Authorization (RMA) number generated by Amazon or enter a custom RMA number of your own,” says Amazon in its advice for sellers. “RMA numbers will appear to the buyer on both the RMA and the Amazon-generated return label. You will be prompted to choose a return address. You will have the option to use either one of your previously saved return addresses or to add a new return address.”

Amazon’s RMA system means its marketplace sellers can effectively communicate with it regarding the status of returns made to them. They can address any issues regarding products which are not suitable for return or return requests were made outside of an acceptable time frame.

The RMA means that, if the seller decides to decline or close the return request, they can easily engage with the manual system Amazon requires them to use to provide justification. The customer can then file an appeal through Amazon’s A-Z Guarantee claim system where it can be reviewed and further tracked using the RMA.

With Amazon having such a laser focus of customer service and experience, sellers need to support this ethos by interacting with the company’s generous return policy in a manner congruent with those values.

"To encourage buyers to have confidence when they make purchases from sellers, we believe it’s important to provide buyers with excellent service during the returns process,” says Amazon. “If the cost of a return (yours or the buyer’s) exceeds the value of the original product, consider reaching out to the buyer. In such cases, you may offer to let the buyer keep the original item and still receive a full refund."

Final Thoughts

Introducing automation to your RMA system will make your reverse logistics operation run more smoothly and effectively than would otherwise be possible. As we can see from Amazon, the need for effective communication between itself, its marketplace sellers, and the customer, is fulfilled through such a system.

The benefits of automation are sure to be part of the conversation at Consumer Returns 2022, taking place in October at the Hyatt Regency Austin, TX.

Download the agenda today for more information and insights.