How to Reduce RTO in eCommerce: Effective Tips and Techniques

Reducing Return to Origin (RTO) is a challenge for many eCommerce businesses, and if not handled, it can impact your end result, financially speaking. High RTO rates bring about unnecessary expenses and a lot of hassles, which could have been caused by the wrong address, an unattended delivery, or even due to customer cancellation.

The good news? There are multiple ways of reducing RTO and improving the overall functioning of your business. In this blog, we will share some effective tips and techniques that you can implement right away to reduce RTO. We will be discussing various options, starting from optimizing your checkout process all the way to implementing technology to its fullest potential. So you can choose the one that works best for your business.

So, let’s get started.

What is RTO?

Return to Origin (RTO) happens when the order fails to reach the customer back to the seller's warehouse or address. This issue becomes more common as sellers expand to Tier 2 and Tier 3 cities and receive more orders.

There are a variety of reasons for RTO, like the buyer's unavailability, an order that had turned out to be a mistake, or the fact that the customer no longer wanted the product. Usually, the shipping partners mention the reasons for non-delivery in the NDR (Non-Delivery Report), which explains to the seller why a shipment was not delivered.

6 Effective Tips and Techniques to Reduce RTO in E-Commerce

Flexible Payment Methods

A wider offer of payment preferences, such as debit and credit cards, digital wallets, UPI, or cash on delivery (COD), allows for the easiest selection for the customer. This flexibility can reduce the probability of failed COD orders or issues in payment that convert into returns. By catering to diverse payment preferences, you can enhance the customer experience and reduce RTO rates.
Address Verification

Verifying the details of the customer contact and delivery addresses before courier pickup may minimize the probability of failed deliveries and RTO cases. You can set up a mechanism for such verification, either on your platform or your dashboard, through AI-powered lead qualification tools or via manual checks. It ensures accuracy and prevents issues related to incorrect or incomplete information, therefore reducing RTO.
Quality Packaging

Quality packing materials and professional packing methods greatly prevent damage during transit; make padding available to fragile items wherever possible to limit damage. Also, providing easy-to-understand instructions and clear labeling is encouraged to reduce confusion that could lead to returns.
Transparent Communication

Customers often forget what they have ordered, leading to uncertainty about their delivery. Keep them updated with information through a communication channel, SMS, email, or even WhatsApp, so that the customers would know their possible dates and times of delivery. The awareness will reduce anxiety and frustration, ultimately reducing the chances of RTOs and returns.
Quick Shipping

Allowing customers to choose their preferred delivery time slots, addresses, or methods can greatly improve the delivery experience and reduce missed or failed delivery attempts that often lead to returns. When convenience and speedy shipping become prioritized, trust and loyalty are ensured, as the customer remains engaged when given prompt and reliable deliveries.

You can enhance their shipping methods through partnerships with logistics like Velocity Express aggregators to make deliveries faster, putting RTOs at a minimum and improving customer satisfaction.

Easy Exchanges

When a customer says, 'I want to return my item,' respond with: 'Ok. Just exchange it with an equivalent item in a different size, color, or variant.' Then, train the consultant to give an elaborate description of how to exchange.

For example, your consultant should say, “Yes, I will provide you with a return shipping label and clear and simple instructions on how to do that.” With such simple switches from return to exchange, you can keep customers happy, reduce the rates of return, and sometimes even win back some lost sales.

How Reducing RTO Can Help Your Business?

Customer Satisfaction

By reducing RTO, you can focus on the primary expectations of seamless delivery and timely fulfillment that customers demand; a better experience during delivery means higher levels of satisfaction and loyalty from their customers.
Increased Profitability

RTO reduction directly impacts profit margins by lowering costs incurred in shipping, returns, and restocking. All of these, to whatever extent they can lower returns, help retain revenues and enhance sales and profits since reduced returns indicate less reselling.
Brand Reputation

A high rate for return to origin will damage the brand image and can also affect customer perception because of the high number of returns and delivery failures seen as indicators of low quality or unreliable service.

Reducing RTO ensures that businesses are delivered with the utmost convenience, improving customer experience and building goodwill for the brand. This, in turn, increases the customers' beliefs in the business, who would then share their experiences, thus gaining more clients.
Improved Efficiency

Reducing the rate of RTO helps in streamlining logistics since it minimizes the additional handling required for inventory management and order processing. It also brings fewer disruptions to operational workflow, eases the strain on resources, improves performance as bottlenecks are reduced, and enhances productivity.
Cost Reduction

Increased RTO incurs charges on your eCommerce business parts, such as shipping, return processing, handling, and inventory management, making money fly out the door. By reducing RTO, businesses can save themselves from incurring these expenses, boost operational efficiency, and keep some of the money from going out the door.

Final Thoughts

Using the techniques mentioned above, RTOs can be effectively reduced, and eCommerce businesses can go further ahead with partnered Velocity Express to complement this. Their tech-enabled platform sends automated order confirmations, verifies addresses, and regularly updates via SMS, email, and WhatsApp. Reduced RTOs, increased customer experience, and boosted operational efficiency will, in turn, be beneficial from an increased profit point of view.