Once your customers click on the "Pay Now" button and you've filled their orders, you may not be finished with them: After receiving the product, they may decide it's not what they wanted. And getting the product back isn't always so simple. You'll likely be in contact with them numerous times, and you'll have to process a refund and restock the product once you've received it. There's almost more to the return than the steps involved in the original sale. Suffice to say, customer returns can often be very time-, process- and cost-intensive.
According to Forrester Research, one out of every 10 products sold will be returned. Of course this figure will vary based on the types of products sold online. But why not take a proactive approach by providing online processing of customer returns? Shipping companies such as the U.S. Postal Service (USPS), FedEx and UPS are providing technology and services for the online e-tailer to ease the process of handling returns. These services make returns more convenient for your customers by allowing them to quickly print return labels and have the product immediately picked up.

Your Options
There are a number of ways to handle returns, but one particularly popular way is to provide customers with return labels that can be placed on packages to be sent back to the fulfillment center or business. The U.S. Postal Service (USPS) was the first to offer a system to allow customers to print return labels straight from their own PCs. Called Returns@ease, it works like this: After customers alert you that they want to return items, you can provide them with merchandise return labels via the Web so they can return the packages by mail.

To use Returns@ease, you must obtain a merchandise return permit from the USPS and set up an account at a local post office. The registration application, programming codes and applicable guidelines for using the service can be found online at USPSPriorityMail.com. The service is free to customers and doesn't require additional hardware or software. Keep in mind, though, that there's a minimum charge to merchants of 30 cents per return, plus postage and any fees for special services such as shipping insurance and delivery confirmation.

UPS also has an e-returns service that provides consumers with a label they can print from their PCs. But the UPS system has additional functions. For example, "[If your customer returns a CD because] he changed his mind, the system can ship it back to the merchant for restocking," says Steve Holmes of UPS. "But if the CD was returned because it was defective, the system knows immediately to put the name and address of the manufacturer on the return label so it can be returned under warranty."

Once packages are shipped, you and your customers can keep track of the status of those packages directly from your Web site or via the UPS Web site. Customers can hand return packages to any of UPS' 70,000 drivers, or--depending on your return policy--UPS drivers can pick up the packages at consumers' homes. Based on your return policy, you'll be charged a transaction fee and various transportation charges, which are billed to you or your customer once you receive the items from each return.

FedEx Return Manager is an automated Net solution. You can either send customers a return FedEx shipping label via e-mail or arrange for a driver to pick up the product. It's easy for customers and allows you to check the status of the shipment as it's returned to you.

If you're not ready for all this technology, post a clear return policy on your site so customers are aware of your return policies and procedures. This will reduce the number of phone calls on your end. In addition, it will make your customers feel more confident about making an initial purchase if they know there's a way out just in case the product isn't just what they wanted.

Pay Someone Else to Do It for You
Many netpreneurs, not wanting to handle the return process themselves, turn instead to returns management solutions (RMS) companies for help. RMS companies handle all aspects of returns management for you. They can generate shipping labels and return authorizations, which include information about why customers are returning the products, what they're returning and other pertinent information. They may also take care of the physical handling and disposition of those returns. Sometimes, these companies even have returns facilities, where employees scan, open, verify and assess the condition of the returned products.

Many RMS companies integrate their systems with yours, so your order management, credit processing, transportation, returns authorization generation and customer service systems are all connected. This way, you can track the status and condition of returned products, and items can be routed to the locations you designate.

Many RMS companies also allow your customers to return products to USPS offices or other carriers' offices, where they're shipped back to you. They also give your customers instant credit for returns. RMS companies usually charge an installation fee, starting at $10,000, and a transaction fee for each returned package--anywhere from 50 cents to $4, depending on the level of service offered.

Whether you decide to process returns yourself or hand the responsibility over to an outside firm, remember that satisfied customers are the only ones who will return to your Web site to shop in the future. And if your satisfied customer base--and your business--have been growing, can you really afford to alienate this pool of happy shoppers?