Product Recovery for Online Rental Businesses
A burgeoning e-commerce rental economy is tapping into a mobile generation burdened with high costs of living. This young class of consumers is often between phases and places. When your future seems uncertain, owning expensive and bulky items seems enviable. From designer dresses to quality furniture, startups are striving to provide these people with a practical and cost-effective option.
Rental businesses are highly lucrative but where there is reward there is a risk, and it is one that you all need to address. What happens when your products disappear with your customers? Follow these steps to recover your products effectively.
# 1. Take Preventative Measures
Establish preventive measures to help you mitigate losses before you start. Here are some of the most common practices.
- Product Insurance – Is the best way to go but does not work for all businesses because it can be costly.
- Term and Conditions – make sure the include late charges and a clause that allows you to charge any costs incurred during product recovery.
- In-house Process – create a rigorous in-house recovery process and enforce each step strictly. Have a blacklist that highlights and bars repeat offenders. This will further motivate your customers to be punctual at returning your products.
# 2. Discovery
As an e-commerce business, customer service is the foundation of your business. A certain amount of trust should exist between you and them. Thus, as the first step of recovery, you should try to reach your customer and find out what is happening.
You should exhaust all means of communications, but keep it respectful. Emails, text messages and phone calls should be sent within an acceptable timeframe and carry an appropriate tone.
# 3. Segment and Approach
Once you have collected your customers' responses, classify them into two groups: those who “cannot,” and those who “will not.”
Customers that “cannot” could be facing financial difficulties. They might be willing to return the product but are unable to pay the accumulated late fees. You may want to waive or reduce the fees if they return your product in excellent condition. You might also consider allowing them to pay in installments.
Customers that ”will not” may need a harsher approach. You might want to hire a debt collection agency that has experience with item recovery. This would force the customer to understand the gravity of the situation and increase your chance of recovery.
# What’s Next?
The measures listed above appear straight-forward enough. But when you are a new business striving to grow and expand, executing these steps may be a struggle. You may find yourself hard pressed for time, energy and workforce to chase down your products. If you don't mitigate your losses, you will have problems with cash flow and order fulfillment because of diminishing inventory. So get on it!