The Importance of Return Rate and What Can Be Done to Reduce It – Clarobi For You

Jun 17, 2020

Quick Overview of Return Rate (RR)

In business, several parameters are used to assess the performance of the venture. One of the most relevant in this instance is the return rate. These parameters are collectively known as the key performance indicators (or simply KPIs). At Clarobi, the return rate (also known as RR) is one of the most useful for tracking and observing the overall trend of an enterprise. As it is with the other KPIs, the RR also has its method of calculation.

At Clarobi, we make use of two kinds of RR. These include the one that is known as the global RR and another is the one called product-specific RR. For each of these return rates, there are very specific formulas that are used for the calculation of each. The following are the formulas we employ for the calculation of the RRs and they are as follows:

Global RR = The Number of Orders Returns/The Total Number of Invoiced Orders

Product Specific RR = The Number of Returned Units/The Number of Sold Units for Specific Product.

Importance of the Return Rate

Now that an overview of the return rate has been done alongside how to do the calculation, the next section will be on how important it is. In business, it is not a good thing if you are having an increased return rate. It signifies a downward trend for your business and should not be ignored. A situation where it is higher than the global RR for a particular product, the implication is negative. It typically implies that the description of the concerned product is not good enough.

It can also mean that low-quality images were used and in worst cases, it can mean that the quality of the product itself has been compromised. However, if you are making use of Clarobi services, all these will be handled properly. In fact, with Clarobi, things are not even going to get this worse.

Clarobi has a system that ensures constant monitoring of the global RR and for this parameter, you can set particular points and whenever these points are reached, automatic alerts and notifications will be sent to you. The main advantage of this is that you are going to instantly notice if anything is going wrong. Prevention is better than cure so you get to fix any error on time before any lasting damage can be done to your business.

Reducing your Return Rate with Clarobi

One of the core missions of Clarobi is to do a thorough assessment of all the parameters on your behalf. One such parameter is the return rate. A spike in the return rate is not good for your business. Clarobi immediately detects a rise in RR and you are alerted. Apart from regular alerts, the Clarobi system delves in deep to know precisely the factors causing an increase in the return rate. These can be a wrong description of the product, use of images with poor quality, and even a low level of quality of the product. Once the causes are known, the return rate can be reduced by having the causes fixed.