Understanding RTO in E-Commerce and 10 Ways to Reduce it – Shipyaari Blog

Introduction

In online business, product returns have become a common occurrence. When a delivered product fails to reach its intended destination and makes its way back to the online store, it is deemed a “Return to Origin” or RTO.

The process of handling returns can pose significant challenges for e-commerce companies as it directly affects their revenue and profitability. As India’s e-commerce industry continues to experience exponential growth, with a projected 84% increase by 2024, the likelihood of encountering RTO situations also escalates. Consequently, finding effective strategies to mitigate and reduce RTO becomes imperative.

As online stores receive orders, they meticulously assess the quality of the products, package them diligently, and dispatch them to the correct addresses. However, when these same products return to their origin, it poses a setback for e-commerce businesses. RTO disrupts the supply chain and incurs additional costs associated with retrieval, repackaging, and transportation.

E-commerce companies are increasingly optimising their operational processes to tackle the RTO challenges. This includes implementing measures to minimise delivery failures, such as enhancing address verification systems and leveraging real-time tracking technologies. Moreover, clear and transparent return policies, coupled with quality checks prior to shipping, aid in reducing customer dissatisfaction and subsequent returns.

In this blog, we will unravel the intricacies of RTO, shedding light on its causes and offering insights into how Shipyaari can effectively assist in mitigating its impact.

 

What is RTO in Ecommerce ? 

Return to Origin, or RTO in short, is a word used frequently in the eCommerce sector to describe when an order cannot be delivered and must be sent back to the seller’s address. Even if there are a variety of reasons why a shipment might not be delivered, returning it to the seller’s warehouse will simply increase the costs associated with doing so. As a result, in order to grow their business, sellers must maintain the lowest RTO feasible.

 

Why Does RTO Occur?

 

Return to origin (RTO) is a frequent occurrence in E-commerce businesses. Here are a few of the main causes of RTO:

  • Incorrect Delivery Address: RTO can happen when the delivery address provided by the customer is incomplete, inaccurate, or inaccessible, making it impossible for the courier to deliver the package.
  • Unavailability of the Recipient: If the recipient is unavailable during multiple delivery attempts at the specified delivery location, the package may be returned to the origin.
  • Damaged Goods: In some cases, products may be damaged during transit, rendering them unfit for delivery. This can occur due to mishandling, inadequate packaging, or accidents during transportation, leading to the need for RTO.
  • Unsatisfied Customers: When customers receive products that do not meet their expectations, such as incorrect size, colour, or quality, they may initiate returns, resulting in RTO.
  • Shipping and Handling Errors: Mistakes during the shipping and handling process, such as mixing up orders or shipping incorrect products, can result in the need for RTO as the faulty items are returned to the origin for correction.
  • Failed Delivery Attempts: If the courier or delivery personnel cannot locate the recipient or gain access to the delivery address after multiple attempts, the package may be returned to the origin due to failed delivery.
  • Customer Cancellations: Customers may cancel orders after they have been placed but before delivery. These cancellations can lead to RTO if the products have already been dispatched or are in transit.

 

How do we Reduce RTO in E-commerce?

 

E-commerce RTO (Return to Origin) reduction calls for a combination of strategies and tactics that target the underlying causes of the issue. Here are a few strategies for lowering RTO in e-commerce:

 

1. Ensure prompt delivery

The number of eCommerce businesses competing for customers’ attention has raised customer expectations. A survey found that 41% of customers would pay more for same-day delivery, and 24% would pay more for shipping if the item could be delivered in one or two hours. Shipyaari assists eCommerce companies in completing same-day deliveries and assisting in lowering RTO, thanks to our non-robotic NDR services and pan-India network of warehouses.

 

2. Provide definitive product information

Lack of clear information from customers about the ordered product is one of the main causes of returns and cancellations. Customers consequently unintentionally purchase goods about which they are unaware or underinformed. In order to prevent this from happening, sellers must give detailed product descriptions. It helps foster customer trust, loyalty and guarantees that customers will receive exactly what they have seen, read, and ordered on the website. By giving complete and thorough product descriptions, mentioning the right specializations, and distinguishing qualities of the product, customers can make an educated choice when placing an order, thus decreasing the need for unnecessary returns.

 

3. Control NDR reports

Shipyaari’s non-robotic NDR (Non-Delivery Report) plays a significant role in assisting businesses in reducing RTO (Return to Origin).The NDR management tool is, therefore, essential for eCommerce businesses. Providing complete visibility enables sellers to take preventative measures to lower RTO. For instance, the seller can get in touch with the customer to confirm their availability and ensure successful delivery if the courier delivery executive cites customer unavailability as the cause for non-delivery.

4. Verify contact data
It is crucial to confirm that the customer-provided contact information, including the phone number, address, and pin code, is authentic. It is best to add all the necessary information before shipping the order. This is to avoid the delivery executives having difficulty contacting the customer, greatly lowering the likelihood of returns and cancellations.

 

5. Provide reliable tracking

Increasing customer satisfaction requires tracking regularly. When ordering from an unknown website, regular order updates can significantly reduce customers’ anxiety. Updates sent via email, SMS, or WhatsApp assist in building customer trust and lower the likelihood of returns and cancellations.

 

6. Gather client testimonials

Promoting customer reviews and feedback is a good idea, as it will help you identify and address any problems or loopholes that may be preventing your business from operating efficiently. Positive customer reviews additionally contribute to the development of trust among prospective customers.This can significantly lower return orders for your company because many consumers base their purchasing decisions on reviews from previous customers’ testimonials.

7. Online Payments

Cash on delivery orders makes up the majority of RTOs. The number of returns and cancellations is significantly decreased when online payment options are available. The odds of a successful delivery are highest for orders paid for with net banking, debit or credit cards, or UPI, which also lowers RTO rates for businesses.

 

8. Prioritise delivery-related preferences

You can increase customer confidence and lower RTO in eCommerce by giving your customers the choice of their preferred time slots for the courier delivery in addition to other options like rescheduling the delivery. This can be accomplished by informing the customers before the delivery date. Since the customers are aware that they won’t be available at the specified time, they can select a delivery time that is convenient for them and coincides with when they will be at the address on the specified date.However, if you don’t give them a choice in the delivery date and time, it could lead to a missed delivery. After a few unsuccessful delivery attempts, the logistics partner will then return the item to the source destination.

 

9. Enhance product packaging

The first thing a customer notices about a brand is its packaging. The likelihood of product damage is also increased by poor packaging, particularly when it comes to delicate items. In these situations, the customer rejects the product, leading to RTO.In eCommerce, strong and attractive packaging can help lower RTO. Businesses can make a good first impression by using eco-friendly packaging.

 

10. Gifts or discounts

Gifts or discount coupons increase sales, build customer loyalty, and attract customers.Orders that come with free or discounted gifts increase customer satisfaction and decrease the likelihood that they will be returned.

 

Wrapping Up

In today’s fast-paced, interconnected digital environment, managing RTO is essential. To protect the company’s continuity, RTO measures the maximum permitted downtime for critical systems and services.

Businesses with a well-managed RTO can recover quickly and get back to business as usual, minimizing the impact on stakeholders and customers.

By establishing adequate and reputable delivery services, Shipyaari, a SaaS-based logistics company, aids in lowering RTO. Utilizing a large network of logistics partners and cutting-edge technology, we reduce transit times and optimize delivery routes. Additionally, we offer customer support and end-to-end tracking to guarantee prompt and successful delivery of shipments, thus, minimizing the risk of returns.

 

FAQs

Q. What is the full form of RTO in delivery?

RTO also known as “Return to Origin” . RTO parcels are ones that, for whatever reason, were not delivered to the intended destination and that the seller has asked be returned.

Q. How do you avoid RTO in eCommerce?

There are some measures which can help you reduce your RTO in eCommerce which include optimizing your product descriptions, tracking your product time to time , and consider flexible online payments to avoid any possible RTOs.

Q. What are RTO charges in shipping?

RTO charges in shipping basically refer to the charges that are incurred by the seller for getting the parcel back to his location.

 

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