Despite upheavals in global supply chains, cross-border e-commerce remains strong. According to the cross-border e-commerce service provider, Global-e, cross-border e-commerce sales grew 21% in 2020 compared to 2019, while payments processor Worldpay WP 0.0% found that 55% of online shoppers made a cross-border purchase in 2021.
According to a survey conducted by a direct-to-consumer (DTC) provider, ESW, most survey respondents (26%) indicated that they shopped on international e-commerce websites because they paid less for products than domestically.
While cost savings is a definite plus, the logistics of transporting items from origin to the last mile globally is expensive.
Imagine if the customer didn't like the item for some reason and wanted to return it – that's even more expensive for the shipper.
According to another survey from a technology provider, a guaranteed free returns policy was the leading encouragement for consumers to make an online purchase from a company in another country.
Just like there's no such thing as "free shipping," returns are not free either. But it is essential to make the process as easy and hassle-free as possible.
When building out a cross-border e-commerce strategy, a shipper needs to ensure that they have a fair and balanced returns policy, so no one is at a disadvantage based on the customer or shipper's country of residence.
Create a web-based returns portal for shoppers, allowing them to print their labels and track their returns throughout the refund process. Include returns packaging with the original parcel and make booking a return quick and painless, allowing the customer to track their returns through the refund process so that the refund is initiated as soon as the return is collected from the customer.
In addition, shippers need to build relationships with supply chain partners who have regional and/or in-country return centers. A shipper can speed up the refund process by performing the product inspection and refund process locally. Also, it will allow the shipper to consolidate packages for bulk return to the home facility, saving transportation costs.
Understanding countries' customs duties and regulatory requirements are essential so that items are shipped in such a way as to ensure there are no delivery delays. This is where partnering with the right supply chain providers becomes even more important.
Shippers need to understand individual country requirements. For example, consumers have up to 14 days to send back or exchange purchased goods before incurring charges in the European Union. In China, online shoppers have only seven days to decide whether or not to keep their items.
There's a lot to keep in mind when handling cross-border returns. Processing cross-border returns is more expensive than the original outbound shipping cost. Upon re-entering the US, the goods are now considered an import and subject to applicable taxes and duties.
A solution around this could be to establish secondary marketplaces such as online auction websites in various countries to sell bulk returned, excess, or liquidation inventory instead of shipping them back to the retailer's home country.
Managing domestic returns is difficult enough for retailers, but it's double the difficulty when cross-border returns are included. Partnering with the right supply chain providers and specialized reverse logistics service providers is necessary due to the intricacies such as taxes, duties, country-specific requirements, and more involved.
Tony Sciarrotta is Executive Director of the Reverse Logistics Association.
This article originally appeared in the March/April, 2022 issue of PARCEL.