The natural outcome of a booming eCommerce industry is the emergence of challenges. And the Return to Origin (RTO) menace is one of the most underrated issues plaguing the industry. More so, its cascading impact ultimately hits the retailer’s bottom line.
Now that you know its gravity and magnitude, processes are underway to tackle and minimize its occurrence using multidimensional strategies. Zaakpay is at the forefront of evolving tactical solutions to insulate online stores from the RTO hazard. But, first, let us understand what RTO means.
RTO is an acronym for Return to Origin, which essentially describes a sold item not delivered to the buyer and transmitted back to the shipping warehouse. Notwithstanding a customer-centric robust return policy, an RTO nevertheless inflicts multiple losses. Howsoever meticulous the checkout using an Ecommerce payment gateway, a purchase often lands into the RTO category. Especially for eCommerce, orders are served in smaller Indian towns. So, what are its implications?
Financial Impact of RTO in eCommerce
There are several aspects of the RTO that need attention to mitigate losses. While Zaakpay integrates merchant services without setup and maintenance costs, unchecked RTOs can eat into the online store’s finances. Moreover, it negates the low transaction discount rates inherent to the service provider’s payment gateway charges. So, let us take a closer look at how the business suffers a financial loss.
Several studies have revealed that one out of every three orders is converted into RTO, significantly from fraudulent intent or COD orders. In addition, many canceled and return orders do not sell, adding to further losses. And these are also classified under the RTO category. So, that brings us to the question of why eCommerce must reduce RTO.
Reasons to Reduce RTO
The primary reason to reduce RTO is to protect the eCommerce store. Moreover, fraud and COD failure-related RTOs often lead to inventory and revenue leakage. Therefore, eCommerce establishments must devise plans to counter RTO before it drains out your resources and affects your business efficiency.
On the other hand, if the RTO arose due to delayed or inaccurate delivery, it is time you optimized your shipping experience. In addition, it also reflects upon the online store’s fulfillment process.
Ways to Reduce eCommerce RTO
There are no two opinions about reducing RTO to protect the eCommerce store’s revenue and the brand. Thus, the following are essential for all eCommerce businesses.:
Having understood the entire gamut of eCommerce RTO issues, it is now time to look at the strategies to combat it.
The best way to reduce RTO is prevention, and the following can help achieve it:
Timely delivery of purchased items and a real-time order tracking facility is the right tool to monitor its movement and raise customer confidence. In addition, meeting delivery commitments minimizes customer dissatisfaction, especially orders for special events.
Today’s customers are comfortable in handing digital payments using their preferred modes. Therefore, it is prudent to offer a wide choice of payment methods to ensure transaction success and eliminate COD, one of the primary causes for RTO. For instance, the Zaakpay eCommerce payment gateway handles 100+ payment methods.
Apart from disrupting the product lifecycle and shopping experience, RTO adversely impacts the online store’s financial credentials. Therefore, to restore customer confidence, the following are essential:
Failed deliveries are the precursors to RTO, apart from adding to the costs for rescheduling. Instead, consider the following:
A distributed inventory across India saves shipping costs and delivery timelines, apart from the following benefits:
One of the ways to reduce RTO is to set up a mechanism to combat return frauds and protect the eCommerce outlet from revenue losses. Here is what you need:
RTO is a reality with which the eCommerce industry has to cope. However, it is possible to reduce it substantially through an efficient return management mechanism. In addition, tapping Zaakpay’s tailored merchant services can mitigate RTO’s impact on the online store’s finances and prevent disruption in the cash flow on nominal payment gateway charges. Finally, reduced RTO boosts your efficiency and brand equity.