Retailers Look to AI for Help on ‘National Returns Day’

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ATLANTA – Retailers are taking high-tech steps to keep consumers happy when they return their holiday purchases. 

Total U.S. returns are expected to come to $380 billion in 2017, according to numbers from the National Retail Federation (NRF). 

And United Parcel Service Inc. reports shoppers have returned more than 1 million packages daily throughout December, and that volume should hit its peak on Jan. 3, which it calls “National Returns Day,” when UPS said it expects 1.4 million packages, a fifth-consecutive record. 

To smooth the path of those returns, retailers are now tapping artificial intelligence (AI) and other high-tech tools.

Case in point: Walmart added Mobile Express Returns to its mobile app to speed up the return process. It lets customers start the process for returning an item from their mobile devices then complete the transaction in a store. The service sets a goal of bringing the time it takes to return an item to 30 seconds. 

JC Ramey, chief executive of DeviceBits, a company that uses AI to help companies provide better customer service, told MarketWatch.com that he believes returns will continue to grow as long as e-commerce grows. “It was the barrier to entry for online, the desire for touch and feel,” Ramey says. “The overall cost will continue to shrink as [retailers] seek out operational efficiencies.”

He adds that technology is replacing humans and offsetting the cost of returns, estimating that the price tag for a customer service call is between $2 and $5. He says the cost is higher for in-store associates and that reducing those costs can mean significant savings. Staffing at a large call center can reach 20,000 people, up from around 14,000 during other parts of the year.

“We’ve seen less staffing required this year – by 20 percent to 30 percent – so I think a lot of brands are using systems that aren’t human,” Ramey said. 

Other cost-saving measures include providing multiple ways for shoppers to return items, whether through a shipping service or elsewhere, and offering an incentive to exchange an item rather than return it.

DeviceBits also collects data on why people are returning items. Many of their clients are in consumer electronics, so some returns are tied to a customer’s inability to set up or use the item they’ve been given. “The ability to drive that education early to the new users of these platforms – consumer electronics or otherwise – will drive some of the cost out,” Ramey said.

Optoro, a reverse logistics company that helps with returned and excess inventory, says retailers are focused on customer experience, even on the return side.

Tobin Moore, chief executive of Optoro, told MarketWatch.com that retailers “recognize that the e-commerce model doesn’t work economically unless they’re well prepared for returns,” said. “Consumers probably won’t notice it much but retailers are getting better at processing on the back-end, in a more effective manner.”