E-Commerce Insurance Case Studies

The costs of handling the returns process for goods shipped internationally are becoming an increasingly significant drain on the finances of online retailers. We’ve already introduced the idea of e-commerce returns insurance as a solution to this problem, but what do those whose businesses depend on e-commerce think? Here are a few e-commerce insurance case studies for you to consider and ones that I’m sure you’ll be able to relate to in some capacity:

Case Study 1

I met with a customer who reported a severe problem when it comes to handling returns and managing the checking and verification process. Faced with countless pallets loaded with unwanted packages sitting in his warehouse blocking areas, the task of trying to sort out the contents of the packages and who returned them had been made more difficult due to a lack of relevant identification on the packages and contents that didn’t match with what was logged on their systems. As a result he explained that the customer department was being inundated with calls from irate customers wanting their money back.

In the course of further discussions, he revealed the extent to which he was impacted by the cost of returns, but also the detriment to cash flow and the reduced revenue as a result of the returns.

I further examined the real internal cost was around £20 per return item, not including shipping, so this was becoming a huge issue for him.

So I offered him an insurance programme whereby we insured the shipments and any returns would be our responsibility to manage. We advised him of the customer details and confirmed status of content, stipulating that we would pay him back for a percentage of the value of the returned items – a proposal he was happy to accept. The end result for this customer is no more pain of handling irate customers and blocking up his warehouse with pallets of unwanted goods and then trying to refurbish and repackage back into inventory.

Case Study 2

I have another customer who ships globally and has returns and unwanted packages in just about every country in the world. When we met it soon became apparent that his returns costs were truly staggering, in some cases more than 10 times the value of the item itself.

I was able to show him that by using our e-commerce insurance programme covering returned goods, he could save on all the customs clearance charges and the cost of airfreighting products back to their country of origin. He was delighted at the savings and the subsequent revenue return, as returned goods were no longer classed as a lost sale owing to the fact he could recover the partial cost of the items without the all the administrative burden.

Our e-commerce insurance solution for returned goods is available for e-commerce businesses of all sizes anywhere in the world. If you’re making significant losses processing product returns and are struggling with returns management, contact Ecom Global Network Ltd today for more information on our e-commerce returns insurance programme.