The Losses That Online Retailer Faces When Product Returns From Customer

7/29/2019 The Losses That Online Retailer Faces When Product Returns From Customer

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Letter of Transmittal

06th December, 2012

Nafish Sarwar Islam

Department of Business Administration,

East West University.

Subject: The losses that online retailer faces when product returns from customer.

Dear Sir,

Here is the report that you have asked us to prepare for our course requirement of

Industrial Management (MGTT321).

I am encouraged and enthusiastic by collecting the details for the preparation of the

report. I have gone through these queries several times and solve it out and as per as

your instructions. Indisputably, I have learned a lot and have gained remarkable

experience.

I believe this report provides a complete and clear picture of the product replacement

by the customer and the losses of retailer in Online Shopping. Definitely; I enjoyed a lotwhile working in this attractive topic and gave my level best effort to finish it within the

deadline.

I sincerely hope that all my effort will be a success if you go through this paper. I am

truly appreciating this term paper and please call upon me, if you do require my

assistance during examines the paper.

Sincerely yours, Signatures

Emranul Islam.


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Executive Summary

This kind of statement is prepared as being a mandatory requirement of Industrial

Management (MGTT321) at East West University. The statement is termed on the online

shopping: The losses that online retailer faces when product returns from customer.

In business loss analysis is important and vastly discussed topics for retailers. In

business, an effective in addition to sufficient loss investigation creates results about the

worth of an company, which usually in the end maximizes the success with the company.

With an evaluation connected with form of loss investigation, We've used most of thesequeries several times in addition to remedy that out and about and as each since your

current recommendations. Unquestionably, weve discovered a lot and possess

accumulated remarkable knowledge.

For the blessing of internet online shopping, now a day is very much popular for the

new generation as well we high status family. In general, higher levels of education,

income, and occupation of the head of the household correspond to more favorable

perceptions of shopping online. It is a form ofelectronic commerce whereby consumers

directly buy goods or services from a seller over the Internetwithout an intermediary

service

In which issues happen together with consumer purchase, next he/she may perhaps be

entitled to a fix for instance a refund, replacement or repair. It could create a few

economical losses with the seller or retailer. The companies also give more

concentration on the losses or the Replacement.

"
http://en.wikipedia.org/wiki/Electronic_commercehttp://en.wikipedia.org/wiki/Service_%28economics%29http://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Internethttp://en.wikipedia.org/wiki/Service_%28economics%29http://en.wikipedia.org/wiki/Electronic_commerce


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INDEXNo. Topics Page No.

1. What is Online shopping 04

2. online purchaser 04

3. Customers Rights When Shopping Online 05

4. Advantages & Disadvantages of online shopping 05-06

5. The losses that online retailer faces when product returns

from customer

06-08

6. Conclusion 08

7. Reference 09


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What is Online Shopping?

Online shopping is to buy things online. Online shopping is done from the online stores

which are called e-shop or e-store. Anyone can buy products from here without going

out and without wasting any time. Anyone needs not to roam about in the markets or

shopping malls. Online shopping is convenient, economical and also safe just as anyone

shop from a store. Not only products but anyone can also buy services with the help of

online shopping. Online shopping is used for various transactions which can be done

through the application of e-commerce or electronic commerce. There are many e-

shops on the internet from where we can shop online. Anyone can buy anything from e-

stores and at anytime as internet is available 24*7 just using debit and creditcard for

online shopping.

Online purchaser:

Those people are basically online purchaser who are mostly related to online and

working on the online even they are always having their every deal on online and

believe in on online purchasing thing. There is basically the online purchaser. Suppose

free lancer people, they used to work on internet and they have all the profession on

internet works. So they are always being worked on online. They never go for shopping

outside. They give the order and take the things at their home. So they are online

purchaser. And other then those people who are related or rely online thing that means

disable person or maybe they are very much used to computer or internet., they used to

buy over the internet on online. So this thing varies person to person because regular

person are not always buys from internet. They are going to the shop and thinking buy a

purchase product. Because they dont believe taking product without watching or

monitoring that how it is or how it works. So those people are not the basically product

purchaser. So regular people are not the online purchaser. The real purchaser is those

people who are related with online thing. Some others peoples who are really

dependent giving to someone. They just order product pay for it and keep the right

address where product will go.
http://www.trivology.com/articles/2399/what-is-commerce.htmlhttp://www.trivology.com/articles/2399/what-is-commerce.htmlhttp://www.trivology.com/articles/2174/what-is-credit.htmlhttp://www.trivology.com/articles/2174/what-is-credit.htmlhttp://www.trivology.com/articles/2399/what-is-commerce.html


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Customers Rights When Shopping Online:

Online shoppers have stronger rights than those buying from a high street retailer due

to the Distance Selling Regulations (DSRs), which came into force in October 2000.

Consumer agreements must disclose all details. If a company isnt delivering onthe contract, or if you encounter an aspect that wasnt disclosed but was

required to be by law as part of the deal (e.g. an unexpected annual renewal fee),

Customers have the right to cancel within 30 days.

Vague language is discouraged in contracts. All required information must beclear, prominent and easy to understand. If there is a dispute over unclear

language, the law requires that it be interpreted in favor of the consumer.

Deliveries must be made on time. If the company does not make delivery orbegin performing its obligations within 30 days of the date stated in the

agreement, Customers can cancel it at any time before delivery or start of service.

Customers lose the right to cancel if Customers agree to accept delivery or allow

the company to perform its obligations after the 30-day period has expired. If the

agreement does not state a date, the 30 days run from the date the agreement

was entered into. Again, Customers lose that right if Customers accept delivery

or permit the company to start services after the 30 days.

Customers are protected against unfair practices, such as deceptive promotionand sales pitches. If an unfair practice has occurred, you have a year to rescind

the agreement. It is best to send a registered letter, fax or e-mail as proof of

cancellation.

Advantages & Disadvantages of online shopping:

Recently shopping online has become popular because of vast arability of internet.Online shopping is one kind of E-business where one consumer can directly shop over

the internet. Most of us familiar with online shopping. There are many advantages and

disadvantages of shopping online. Those are described in bellow:

Advantages:-There are many advantages of only shopping those are given bellow:

Incredible convenience: In comparison to a brick and mortar store with fixed hours,online shoppers can choose any time of the day or night to get on the Web and shop.

This is especially useful for moms with small children, people that are home-bound,

or simply in times of inclement weather.
http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/http://www.oft.gov.uk/advice_and_resources/resource_base/legal/distance-selling-regulations/


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Price comparisons: When customers visit a store, customers most likely have tosettle for whatever price the vendor has placed on a particular item. Not so with online

shopping customers have the ability to compare prices from hundreds of different

vendors.

Infinite choice: Shelf space in a brick and mortar store is limited, which means thatcustomers variety of goods is limited. Not so with an online store. Plus, if customersdon't see what customers want in one store online, customers can simply move on to

the next one - you've got the power to do that.

Easy access to consumer reviews: It's easy to access consumer reviews for prettymuch any product customers can think of online, which makes for more informed

purchases.

No pressure sales: customers have all been awkwardly propositioned by eagersalespeople. Customers don't have to put up with that online.

Disadvantages:-

Although online shopping have done easy in terms of shopping. But it also has some

disadvantage that are given bellow:

Customers can't try things on: If Customers are buying a clothing item, Customersdon't have the ability to feel the material, try it on, and see how it's made. Unless

Customers know Customers measurements and are familiar with the brand of

clothing offered, this could end up being a bad experience.

Customers can't talk to someone immediately: If Customers have a question aboutwhat Customers are looking at, Customers probably will have to wait at least 24 hours

to get a question answered (however, many sites have "instant chat" enabled that take

care of this issue). Privacy and security: Privacy and security are legitimate concerns for any online

shopper, but there are precautions Customers can take to make sure Customers

transaction is a safe one. For example, paying attention to HTTPSprotocols, installing

free spyware removal tools, knowing how to identify online scams and hoaxes,

surfing anonymously, and keeping your Web usage private are all smart ways to

address any privacy and security issues.

The losses that online retailer faces when product

returns from customer:

A online retailer shop maintain the lot of condition in terms of online shopping. This is

why, breaking those condition no one customer can return the product to the shop.

Although, product goes back to the shop from customer then online retailer might face

those types losses which are given bellow:
http://websearch.about.com/od/dailywebsearchtips/qt/dnt0513.htmhttp://websearch.about.com/od/dailywebsearchtips/qt/dnt0809.htmhttp://websearch.about.com/od/searchingtheweb/ig/Anatomy-Of-A-Phishing-Scam/index.htmhttp://websearch.about.com/od/howtoevaluateawebsite/qt/hoax.htmhttp://websearch.about.com/od/searchingtheweb/a/anonymous.htmhttp://websearch.about.com/od/enginesanddirectories/a/searchprivacy.htmhttp://websearch.about.com/od/enginesanddirectories/a/searchprivacy.htmhttp://websearch.about.com/od/searchingtheweb/a/anonymous.htmhttp://websearch.about.com/od/howtoevaluateawebsite/qt/hoax.htmhttp://websearch.about.com/od/searchingtheweb/ig/Anatomy-Of-A-Phishing-Scam/index.htmhttp://websearch.about.com/od/dailywebsearchtips/qt/dnt0809.htmhttp://websearch.about.com/od/dailywebsearchtips/qt/dnt0513.htm


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Decreasing of net value of intake product: Basically, when a product isintake, it has a unique value of the new product. Whenever the product is open then it

will have different value even that will never be purchased another new customer with

the same price. Because, it will lose regular value. Then it will have different category of

selling maybe or if retailer give the warranty then that case is different. They will have

another one, the customer will be having right product again. But there is no fault of the

product even no eternal problem just because of customer didnt like it. Thats why

customer gives it back to retailer, if it happens then all the loss would be given to the

seller who is the actual retailer.

Increasing the shipment cost: when the product is delivered each and everyproduct had to have delivery cost or shipment cost. But the product is given back to

retailer then another new product will deliver to customer again. The retailer has to

carry new product delivery cost thats what cost is extra. Its a loss for the retailer.Usually if it is out of country then it is cost huge. Though shipment always being

considered with the price of the taken price of the product thats why it may not be

effective but always it a loss when shipment cost is twice.

Decrease of reputation: Usually every delivery of online retailer used to keeptheir reputation. Like- there will be no change for bad product or anything. Because,

they will never give bad product or any kind of fault products. So, they always maintain

their quality or product up to the level . But if any cases the customer didnt like the

product or product is not up to the level. Then the company losses its reputation. Nexttime from that customer will not order or purchase. As its an online company they must

be review option writing where every customer can write their opinion about their

product and services. So it will big loss because another customer can see the review

and they think that there is problem between customer and company. And that

customer never purchase product from them. So it is huge reputation damage for the

company.

Not re-sellable:There is a product which is not re-sellable. When it once sold thenit cannot sell again. Example- Water filter. When a filter uses it become wet and never be

re-sellable. If any online shop takes it back and give the new one to the customer

because of replacement condition. They face huge loss. Because filter has been wet and

totally gone that never to be sold.

Increase inventory cost: There is some product which out of date. Suppose acustomer bought a new KINGSTONpen-drive from online shop. And Online retailer

told to custom, if it goes down or dont like it then the customer give it back within 15 or

30 days and company will give new one of the same category or same price pen-drive.

ButKINGSTONE shutted down to produce those types of pen-drive this is why they

stop selling those types of pen-drive. On the other hand, pen-drive company give the


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product life time warranty. Product life time means that the same kind of product is not

available in the market the warranty goes down. As long the product survives on the

market, it has the warranty. So within the 15 days KINGSTONE stop producing that

product. So it will not give the warranty. In mean time, customer gives back the pen-

drive to retailer shop within 15 or 30 days. Retailer shop it takes it back and give new

one (if there is hand same category pen-drive) or full money back. But retailer could not

sell that pen drive in the market thats why they preserve in store, preserving in the

store that increases the inventory cost which is the huge loss of online retailer shop.

Extra Packaging cost: when the online retailer selling the product then theyrapid it with their logo and packaging paper and send to the customer. Although,

carrying cost and packaging cost related to customer. When customer give it back, the

retailer send another new product to the customer with new packaging which cost

carried by retailer that increase the extra cost of the retailer shop.

Time consuming: when online retailer sells the product, it needs to budget a timefor selling the product. When product comes back from the customer, retailer needs

extra time to dealing with that product. For this reason retailer fails to earn money.

Because we know that Time is Money.

Increases Employment cost: Online retailer shop haring the people forpackaging and sending product to the customer. When the product comes back, the

employee needs to work extra time (overtime) to deal with that product. In the mean

time, employee will never work without any money. They will take money for overtime.Otherwise retailer shop need to hair new people. So this extra payment to employee

increases the employment cost which is huge loss for the online retailer shop.

Conclusion:

Return of products is usually an unpredicted circumstance to the retailer. It makes a

number of one on loss to retailer. To fix this problem retailer must be reactive in

regards to the product which they are sold

Retailers fight product return by customers every day Retailers constantly need to

consider how to prevent loss. The consumer is the ultimate loss whenever a product

loses benefit and also inventory to thieves, for the reason that product should construct

that will cost to the retail store selling price of each product sold. Fend off internal and

also exterior deficits. Retailers will find, on the other hand, numerous loss deterrence

facets which can be talked about openly.


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Reference

http://www.sse.gov.on.ca/mcs/en/Pages/Online_Shopping.aspx

http://www.retailloss.net/

http://en.wikipedia.org/wiki/Online_shopping

http://en.wikipedia.org/wiki/Retail_loss_prevention

http://www.accc.gov.au/content/index.phtml/itemId/1023615
http://www.sse.gov.on.ca/mcs/en/Pages/Online_Shopping.aspxhttp://en.wikipedia.org/wiki/Online_shoppinghttp://www.accc.gov.au/content/index.phtml/itemId/1023615http://www.accc.gov.au/content/index.phtml/itemId/1023615http://www.accc.gov.au/content/index.phtml/itemId/1023615http://en.wikipedia.org/wiki/Online_shoppinghttp://www.sse.gov.on.ca/mcs/en/Pages/Online_Shopping.aspx

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The Losses That Online Retailer Faces When Product Returns From Customer