Managing an avalanche of returns with artificial intelligence

Managing an avalanche of returns with artificial intelligence

As more products than ever are returned, retailers need a smarter, more connected approach to customer engagement, says Seb Reeve of Nuance Communications 

Guest contributor |

According to figures published in The New York Times, the proportion of purchases that are returned more than doubled between 2019 and 2021, and the figure is even higher for online-only retail.

This avalanche of returns is increasing the pressure on many retailers’ operations and profit margins. Indeed, recent estimates put the cost of processing a return at up to two-thirds of the product’s price. Worse, the National Retail Federation estimates that every $100 of returned merchandise costs retailers $10.60 in fraud.

Many retailers are now asking the same question: how do we contain the rising cost of returns without sacrificing shopper satisfaction or overstretching our contact centre? At Nuance, we’re helping industry leaders find powerful answers by applying state-of-the-art automation, artificial intelligence and biometrics.

One effective strategy is to make an intelligent virtual assistant the first point of contact for returns and refunds. Powered by conversational AI, and integrated with the right systems, an advanced virtual assistant can quickly and successfully resolve many return- and refund-related enquiries on its own, looping in a live agent only when escalation is necessary.

Another complementary strategy is using AI and automation to predict customers’ needs, reach out proactively, and minimise inbound calls and messages. Imagine you’ve recently bought and returned a new pair of headphones. It’s been two weeks since you mailed them, and you know the package was received, but you’re still waiting for the money to reappear in your account. If the retailer can predict your need and send you a timely update on your refund’s progress, you’re saved the hassle of placing a call, and the retailer saves the cost of a live agent fielding your enquiry. It’s a true win-win situation.

When a customer does need to speak to a live agent about a return or refund, AI can also make sure the experience is as efficient and positive as possible. In this case, imagine a customer has bought a pair of shoes for their grandchild, but by the time they were able to deliver the gift, the child had grown. Now the shoes are not only too small but can no longer be returned under your refund policy.

The conversation they have with your agent could cement their relationship with your brand or break it forever. AI can support and guide that agent in real time, putting the relevant returns policy and helpful scripts at their fingertips. AI can also monitor the conversation, analysing the customer’s sentiment and suggesting next actions and workarounds, advising the agent to offer store credit, or showing them eligible products should the customer wish to make an exchange.

Even better, because AI is capable of continuous learning, it’s helping retailers to optimise such crucial customer service interactions over time. They’re able to mine insights from every customer conversation, identify best practices, and replicate them in agent-assisted and self-service engagements.

The result isn’t just smoother returns and happier customers; it’s more satisfied agents who are more likely to stay in their jobs, saving retailers money they would otherwise spend on hiring and training.

We are also helping retailers address the challenge of fraudulent returns by using biometrics. When a fraudster successfully scams a returns process, the retailer can often lose twice. They lose the item that the fraudster bought, and the money that they refunded when the fraudster sent back an empty box in its place.

But advanced biometrics technologies, such as voice and behavioural biometrics, are empowering retailers to identify known fraudsters when they get in touch. At the same time, they’re also liberating customers and agents from the need to remember and ask for passwords, removing friction from their interactions and accelerating service.

While managing a rising volume of returns may be an immediate priority, powerful applications for AI, automation and biometrics exist throughout the retail contact centre. Nuance is helping industry leaders apply these technologies to every aspect of customer engagement and drive down costs while ramping up customer and agent experiences.

Nuance is now a Microsoft company and the combination of Nuance and Microsoft innovations in the Microsoft Digital Contact Center Platform unlocks exceptional engagement and seamless customer journeys on every channel.

Seb Reeve is director of intelligent engagement at Nuance Communications 

This article was originally published in the Winter 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription

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