11 ways to reduce E-commerce RTOs in India in 2022
Abhishek Sebin · Wed Mar 09 2022
What is RTO?
RTOs (Return to origin) in E-commerce means your product isn't delivered to the customer and is returned back to you, resulting in losses.
This is an important question that bothers all the e-commerce sellers, everyone who sells products in India, including large platforms like Amazon and Meesho. E-commerce companies use various measures to reduce RTO, and we'll discuss some of those measures below which can help you reduce your losses.
Let's first understand what are the major reasons for RTOs before we jump onto the solutions.
Reasons for RTO
Customer is not available
Your customer placed a Cash on delivery order and changed their mind
The customer pin codes are out of delivery area (ODA)
Incomplete customer address or incorrect address.
Customer contact number is incorrect or not reachable.
Customer wants to open the package before accepting.
Customer doesn't have cash ready with him
Customer might have seen the same product at a cheaper rate somewhere else.
All these lead to RTOs and you incur various forms of losses due to it. You need to be aware of the losses that are incurred in order to minimise those.
Types of RTO Losses
You will incur the 2-way shipping costs for the product which is typically a huge percentage of your margins if your product is below Rs. 1000
You will incur product repackaging costs.
Product damages or wear and tear costs
You'll lose atleast 15-20 days in getting the package back and will incur inventory costs due to that.
How to reduce RTO losses?
Avoid Cash on Delivery On Your Store
The immediate fix to RTOs is not giving Cash on delivery as an option to customers. This will immediately make your RTOs negligible but also reduce the number of orders you'll get significantly.
Optimize Your Product Price
Product price should not be a lot higher than on other well-known platforms like Amazon, Meesho & Flipkart. If the customer sees the same product at a cheaper rate somewhere else they will not accept your product.
Verify Your Cash on Delivery Orders
If you want to allow Cash on delivery for your customers, you will at best be able to reduce your RTO to about 15%, you can do this by confirming with the customer on phone before sending the product, this is also automatically done when you get an order using Instasell.
Convert COD Orders into Prepaid
Another way to reduce RTO is by sending a WhatsApp message to the customer who placed a COD order with a payment link to convert that order into a prepaid order. You can do this either yourself manually or use Instasell to automatically send messages to your customers to make them pay online after they place a COD order.
Engage Your Customers with Emails & SMS
Setup automated emails after they place an order for confirmation and later tracking information. Keeping the customer engaged about their order is a good way to reduce RTOs.
With Instasell, you can do this automatically and also set up WhatsApp notifications (which have higher open rates) for your E-commerce store.
Try Partial Cash on Delivery
You can also reach out to the customer and ask them to pay the shipping charges upfront, which would be ₹50-100, and then send the package, this works really well as it doesn't reduce the number of orders at the same time also ensures minimal RTOs for your business.
If you're a seller on Instasell, this can be automated and you can charge a partial COD for all orders and reduce the RTOs.
Communicate Your Returns Policy Clearly
Customers tend to read the Returns & Refund policy often after placing the order and if the policies are not favorable to the customer there is a higher RTO. So make sure your customer reads the Returns and Refund policy on the website. Send the refund policy to them along with order confirmation by email.
Enable Reviews & Ratings On Your Website
Customers also search for ratings & reviews by your existing customers and having them on your website helps you establish trust with your buyers and also reduces your rates of RTO.
For Clothing Businesses: Use a Size Chart
If you are selling fashion apparel, having a size chart that is easy to understand can also help in reducing RTOs as many times customers don't accept the product because they are not sure of the fit and the return policies.
Use a Reliable & Fast Shipping Partner
If you can ship the products really fast within and deliver them within 3-5 days of the customer placing the order, it'll also improve your RTO rates.
Choosing the right courier service has a huge impact in reducing and managing RTOs as many courier companies do not reattempt delivery or call the customer for delivery. Some of the really good courier companies that help you reduce RTOs are Delhivery, FedEx & Bluedart.
Check for Duplicate Orders
Check for duplicate orders, a lot of times you'll see the same customers placing multiple COD orders and only accepting one of them.
Create Detailed Product Descriptions
Having elaborate product descriptions for your products with multiple images and videos helps your customers understand the product more and also trust your website and they'll be more likely to accept your product.
To conclude, you can make use of some of the above methods to reduce your RTOs drastically and increase your profits while selling online.
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The average RTO rate for merchants who use Instasell to sell their products is less than 12%. This is due to multiple measures we've put in place to reduce RTOs for our sellers and improve revenue.
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