How to Reduce Ecommerce Warranty Claims Through Data and Automation
Have you ever reviewed your company’s warranty claim data? Is it accessible when making organizational decisions or too buried and fragmented to be helpful?
Many businesses don’t consider their warranty data anything more than a record of past claims. However, business owners who analyze their warranty data regularly know it is a valuable asset that can reduce the overall number of warranty claims.
The data from warranty claims provides a direct view into a customer’s experience while sharing insights about which products are causing problems. Warranty data helps you make more informed decisions about the supply chain, customer lifetime value, and product design.
We’ll take a closer look at the practicality of warranty returns automation and how using warranty data can reduce warranty claims.
Why is warranty claim data important?
Leveraging warranty data starts with determining how warranty requests are currently being managed.
Maybe you have a customer service team receiving and processing requests. Or it could be the responsibility of a single employee. No matter how you are currently managing your warranty requests, automation can make a huge difference.
Automating customer touchpoints involves using a digital workflow to send out key customer messages in response to actions instead of sending them manually. This makes it more convenient and reliable than asking your team to keep track of every step of the warranty process manually. The software used to automate your processes can also collect warranty data to provide easy access to valuable data insights.
We hear a lot about using “big data” these days. Though the term sounds complex, applying aggregate data is incredibly practical. Now, more than ever, information collected throughout the buyer’s journey can be used to guide meaningful improvements.
For example, transaction data can show you which hat style is most popular at the start of summer, letting you know to order extra stock in May.
Another example would be how internet browsing data can help you discover that people who like your candles also like herbal tea, indicating that you might benefit from partnerships or giveaways with popular tea brands.
Warranty data works the same way. Your warranty data might show that coffee mugs in a specific SKU are more likely to break. Now you’ll know to investigate that particular mug’s design and manufacturing history. Businesses can gain significant insights by incorporating warranties into their data analysis strategies.
However, a long-term strategy isn’t the only area data is useful. Warranty data is applicable in typical day-to-day operations as well.
As most retailers know, customer feedback is an important tool. When a customer describes their experience, we hear which parts of the journey are working and which processes need a second look. Unfortunately, it isn’t always simple to incentivize customers to provide this feedback.
However, businesses that use a data-driven warranty program are in luck. The data derived from customer-submitted warranty claims provides similar guidance.
Unlike regular customer feedback, warranty submissions are direct. They are also highly specific to a problem that occurred recently. This warranty data can help you understand what customers want and why they are dissatisfied. Access to that kind of direct information can help improve your day-to-day operations.
Clearly, warranty data can transform your business and help solve the root problems in your products.
Why outdated warranty data tracking methods are problematic.
The way warranty claims are tracked varies by retailer. Some large-scale business warranty solutions are too big for small to medium ecommerce stores. Many medium-sized warranty solutions can’t support enterprise-level businesses.
Businesses should use processes that fit their specific operations. However, no matter the size of your business, storing and analyzing warranty data is always a priority.
Many companies still use outdated methods to track warranties. Sadly, it’s holding them back. Among the most commonly used but typically inadequate methods are:
- Physical Forms: Some track their warranty claims manually on printed paper.
- Spreadsheets: Others still use a single spreadsheet to record warranty claims.
- 3rd Parties: Many businesses even hire a 3rd party to manage all their warranty claims.
Each scenario has its downsides, and all cost a business additional expenses due to manual labor. Furthermore, these tracking methods don’t provide visibility into the valuable insights that can help a company improve.
Why spreadsheets are a bad way to track warranty claims.
Information becomes cluttered and unruly when using spreadsheets to manage warranty data. Manual sorting and creating new entries become more difficult as the number of warranty claims grows. This is terrible news for companies who want quick access to critical warranty details.
Using a single spreadsheet can also adversely affect data entry and hygiene. Errors are harder to detect in a cluttered database. This deficiency creates poor conditions for proper data control and accuracy.
Bad data can live in your records undetected until a major problem occurs. As your business grows, these hidden problems grow more dangerous. Failure to identify a manufacturing issue early can result in an expensive recall for your company.
Spreadsheets and physical documents also have a distinct lack of functionality. Excel and Google Sheets may have come a long way, but they cannot compete with many of the leading ecommerce automation tools.
Ecommerce business and customer relations management programs have become the standard. Today, businesses fall behind if they cannot quickly reference important data. Applications such as Shopify and HubSpot empower businesses with their data processing capabilities.
Additionally, single data files or physical documents with essential information are unsafe. Password protection can only provide so much security. Using a spreadsheet to track your warranty data risks the theft of personal customer information or disastrous file corruption.
You could lose every record if a single warranty data file is lost or damaged. When granting access to multiple users with differing program versions, you risk having formatting shifts and junk characters distributed throughout the data. This should be alarming for businesses still using outdated data management technology.
Relying on forms and spreadsheets is risky for businesses trying to scale.
How to manage warranty claims through automation.
Automation technology has made these previous methods of warranty processing obsolete. So forget the spreadsheet and shred the manual forms. Instead, an automated warranty process helps you manage warranty data and simplify customer touchpoints.
Let’s go through the steps of an automated warranty returns process :
1. Warranty claim submitted via a self-service return center.
No need to register on an entirely new web form. Automation allows customers to create their warranty using the same platform they would use to process a return. With self-service functionality and label printing options, customers won’t need to put in any extra effort.
2. Warehouse & Operations Receives the Package
Automated customer service touchpoints allow the returned item to get a head start in the warehouse. The product return is registered automatically upon arrival at the warehouse. Team members can also receive alerts along the way as the package makes its way from the customer to the warehouse.
3. Disposition of the Returned Item is Tracked
Your warehouse team will be able to assess the returned merchandise and determine its condition quickly. They can choose conditions such as “Defective” or “Damaged,” but this field can be customized, allowing you to add options specific to your business. This is one of the most beneficial features for future warranty data analysis.
4. Approval of the Warranty Claim and Release
Once the condition is assessed and verified, all that is left is to approve the warranty claim. This triggers an automated refund or an order to ship a new product in good condition.
That’s it. There are no lengthy email chains. There is no confusing back and forth between teams. The required warranty touchpoints are pre-programmed. Without automation, each of these steps could take days to complete. Neither the customer nor the support team has that kind of time. Automating warranties gives customers the power to easily submit their requests and receive updates along the way.
What does warranty automation mean for your team?
For customers, automation saves time and gives them control. The sense of empowerment that shoppers gain from a simple warranty process helps to enhance customer relationships and increase their confidence in the brand. Instead of creating a new profile with a third party, they can start their return right away directly on your ecommerce site. The steps are as easy as processing a return.
Customer Service Representatives
For customer service representatives, automating warranty claims saves lots of time. Unlike most businesses, where manually processing a warranty claim may take 15 minutes or more, automated warranties can be processed in a matter of seconds. Processing 32 warranties through automation can potentially save an entire day of productivity. As a result, customer service representatives can focus on building relationships, adding value, and prioritizing other activities.
Warehouse & Operations Teams
Your operations team is most effective when they have maximum visibility. Automation provides just that. With automation, your operations team can track dispositions, inventory levels, and warranty statuses. Thanks to a 360-degree view of the reverse supply chain, your warehouse team can gain a higher degree of awareness.
Executive Management Teams
Automating warranty requests removes the guesswork. You gain a wealth of data about your products, teams, and customers, which keeps business owners better informed about operations. This empowers them to make smarter, data-backed decisions as they scale the business.
What are practical applications of warranty data?
With ReturnLogic’s platform, ecommerce retailers can manage warranty requests with the same ease as they would a return and collect, analyze, and leverage their warranty data.
To show you how warranty data can be utilized in the real world, let’s look at the success of one of our customers at ReturnLogic:
This ecommerce retailer builds an electronic accessory used in video games. After launching their product, they quickly gained popularity in the electronics industry. Sales began rolling in.
Soon they found themselves in a period of tremendous growth. However, as sales were increasing, so id warranty claims.
This company had one employee managing all warranty requests in a single spreadsheet. They knew this method was unsustainable for the level of growth they were experiencing and wanted a more scalable solution.
When ReturnLogic showed them the power of automation, they knew it was the right choice. After onboarding with ReturnLogic’s returns management platform, their warranty claims began to run more smoothly. From claim to replacement, customers and teams benefitted from the new way of managing warranty communication. This built brand confidence with customers and reduced the time it took to replace faulty products.
Most importantly, they could sort and analyze the data surrounding the bulk of their warranty requests. What they soon found was enlightening.
They discovered that many of the products being replaced had something in common; they were constructed using a specific batch of semiconductors from a supplier in China. Equipped with this knowledge, their team removed the potentially defective merchandise from their ecommerce store.
They were then able to quarantine the product batch. This meant they could prevent additional warranty claims while testing for quality. They also notified their supplier of the issue, which helped avoid future problems.
For this company, the problem was an electrical component, but for other businesses, the cause of warranty requests could be entirely different.
For jewelry retailers, the issue could be glue or varnish. For apparel stores, warranty claims could be linked to a particular fabric. But, unfortunately, businesses can’t know for sure until they start automating and treating their warranty data like the valuable resource it is.
Time to put your warranty data to good use.
Is there an epiphany hiding in your warranty data? Is there an insight somewhere in your warranty request records? We think it’s time for you to find out. Ditch the outdated way you’re using to track warranty data and reassess your processes.
Data is an indispensable tool for decision-making. Through automated warranty software, it has never been easier to collect and manage your data. Best of all, you’ll be able to leverage that data to reduce the total number of warranty claims. As companies strive to reach new levels of excellence, the insights derived from warranty data are crucial to retailer profitability and retaining customers.
Warranty case Study: