Return merchandise authorization defined
A return merchandise authorization (RMA) is a system that manages product returns. It’s usually one of the first parts of the reverse logistics process — getting products back from the customer to the seller.
With an RMA system, a customer can ask for a refund, repair, or replacement if they’re dissatisfied with a product. Conversely, a seller can resolve any errors and maintain the customer's trust.
Why is an RMA system important?
An RMA system benefits both ecommerce businesses and their customers. If you sell products online, it can allow you to identify areas for improvement. For example, you may discover one of your tech devices always seems to arrive with defective parts. If this is the case, you may want to find a different supplier to work with. In the event a particular clothing item continues to get returned because customers dislike the way it fits, it may be worth it to change your sizing chart.
By identifying areas of improvement and taking appropriate action, you can reduce your return rate and increase revenue. An RMA system may also expedite the returns process and minimize inefficiencies which can cost a great deal of time and money.
From the customer standpoint, an RMA system offers peace of mind and improves the overall customer experience. If they know they can return an item because it doesn’t meet their needs, they’ll be more likely to buy from your store. If you don’t have an RMA system in place, they may be hesitant to make a purchase and turn to a competitor who has one.
A solid RMA system can allow you to build strong relationships with your customers and encourage them to remain loyal to your business. It may also lead to referrals, positive reviews, and a great reputation, which can do wonders for your bottom line.
How an RMA system works
While each company has its own unique RMA system, most adhere to the following steps:
1. A customer initiates an RMA request
If a customer is dissatisfied with a product, they can initiate an RMA request. Unfortunately, some online stores require that a customer contact them via phone or email to do so. This inefficiency can be eliminated with an automated process in which a customer fills out an RMA form online.
Regardless of how a customer initiates a return, they must explain their reasoning. Ideally, there would be a list of acceptable reasons — a broken unit, wrong color, poor fit, and so on — so the customer can easily choose one most applicable to their situation.
A customer should also be able to add their own text to explain in greater detail why they’d like to return an item. It’s also important they state the preferred action for the store to take, whether it’s a refund, repair, or replacement.
2. A store approves the RMA
While some ecommerce businesses accept all returns, most have specific criteria that must be met. Once a store receives a return request, they’ll likely need to approve it either manually or through an automated system. Upon approval, the store must provide the customer with directions on how to send their product back.
Most stores will offer a free shipping label with a specific RMA number. During this step, the customer should be notified of their RMA number and include it on the packing slip, even if it’s already printed on the shipping label the store provides. This way, the store can easily match the item with the customer’s account.
3. A store receives the item
When the customer’s package gets delivered, it’s the store’s responsibility to make sure the item was actually received. A solid RMA system should be able to connect the item received with the RMA number included. In the event a customer sends the wrong item, the store can notify the customer and close the RMA.
4. A store inspects the item
If the item does match the RMA number, the store will thoroughly inspect it. There will likely be a checklist of items to go through so they can identify patterns with certain items. These patterns can help them improve the design or marketing of their products — hopefully reducing the number of returns that occur down the road.
5. A store settles with the customer
Lastly, a store will send a refund, replacement, or repair to the customer. The faster they do, the more likely they’ll avoid complaints and retain customer loyalty. If possible, they’ll provide updates on the return so the customer has an idea of when they can expect their refund or replacement.
By offering updates, a store can save a lot of time on unnecessary customer calls or emails. As soon as the refund, replacement, or repair has been issued, they may close the RMA request and complete the process.
With a strong RMA system, both you and your customers benefit. If you have an ecommerce presence, it’s a necessity — especially if you’d like to succeed in today’s competitive marketplace.