How To Set Up A Manufacturing RMA Process to Avoid Returns

RMA meaning  = return merchandise authorization, the term is often used for Product Returns, is never fun.

To minimize the negative impact you need to make your RMA processing as quick and painless as possible.

At the same time returns can be very costly to your business, so you want to minimize having to process RMA’s as much as possible.

Some companies try to lower their RMA’s by making it exceedingly difficult to return a product.

But you certainly do not want to see your customers venting their frustration on social media, so making your return merchandise authorization process smooth and reasonable is essential. We will give you some solid advice on this.

The best way to reduce return merchandise authorizations is of course to prevent them from occurring in the first place, and we will share some very good advice on this too.

In the RMA processing for consumer products, the emphasis is often placed on weeding out frivolous returns (“I didn’t like the color”).

But in B2B electronics an RMA often means that client’s core business process is blocked, so getting your client back on-line ASAP must be the prime directive. Figuring out the details should come later.

If you’re looking for a solution to deal with B2B returns, please continue reading. We’ll describe an RMA procedure example 

If however, you’re looking for the secret to avoiding product returns, jump directly to “How to Avoid RMA’s”.

HOW TO HANDLE AN RMA?

A B2B relationship is very delicate; quite often one client represents a large part % of your revenue, which is why keeping them happy is vital for the survival of your company.

Your RMA process must be easy to follow for your clients. Think of the following points as the basis for your RMA process flow.

1- DEFINE BASIC RETURN POLICIES

You must start by defining some clear policies when it comes to returning of merchandise, think of time frames for returning products after successful delivery and outlining valid return reasons, Some examples are:

• Wrong merchandise received
• Damaged during shipping
• Incorrect quantity received
• Incorrect quantity ordered
• Duplicate order
• Defective product

To have a clear course of action for return material authorization process requests, answer the following questions:

• Will the client immediately get a refund?
• Will you first send an engineer to check on the defective products (if that’s the return reason)?
• Will you arrange and cover the shipping fees to send the product back to your warehouse?
• How long will it take from the moment a return merchandise authorization is properly requested until the client gets a final solution?

Your team must have a clear understanding of how to deal with the return of merchandise requests.

2- MAKE SURE YOU HAVE AN RMA FORM

In the case of your client calling you or sending you an email requesting a return merchandise authorization, make sure to have an RMA form clearly marked on the contact page of your website

This means it is accessible at all hours, important for global business, and having the client write down information is much better than a representative writing down what he or she thinks she heard. The form should include:

• Clear contact information of the person in your team that handles returns.
• A section for the client’s necessary information; name, account number, address, contact email, and phone, and invoice number.
• A section for the client to list the number of units to be returned, item number (if applicable), serial number (if applicable), and return reason.
• A section for comments or special instructions/requests from the client.
• A section for the client to choose from the return reasons already established by your company.

Once the client submits the RMA form to the right person in your company, you must give your client a time frame to wait for a response from your team, be as fast as you can, that’s what clients expect from an RMA process.

If the product meets your company’s criteria to be returned, let the client know when you will send for the product and be clear on whether they’ll receive a refund and when or whether you’ll send a new batch of products to make up for defective devices.

3- OFFER PICK UP SERVICE

This might be the key to creating a rock-solid RMA process.

Your client most likely has hundreds of business-related issues to take care of.

Having to arrange shipping to send back what could be 100’s to 1000’s of units back to you – and on top of that pay for it- will not just piss them off, it could be the reason to end their business relationship with you and send them on their way to your competitor.

So, piece of advice, make sure it’s you who arranges to pick up the merchandise and cover the fees for it, especially when the return merchandise authorization is approved due to defects.

Companies that receive products in bulks have personnel dedicated to dealing with product reception, they will usually take care of putting merchandise for return together and ready to be picked up, which is why it is okay to expect that from your client.

Once the product is picked up, you might consider the return process done, which technically it is, but your client won’t feel the cycle to be done until they either get a refund or get new functional products delivered to their doors.

Remember that an RMA process should be set up in such a way that your client will have to put in as little effort as possible to return the merchandise.

WHAT TO DO WITH RMA PRODUCTS?

You picked up the products, and now they’re back in your warehouse, now what? There are a couple of courses of action you can take depending on the return reason.

For products that were returned because there was a mistake in the amount ordered or delivered, have your team verify that the product is still in good condition and have it put back in your inventory and made available for sale.

For defective products, store the returned product in a designated area until your engineering team has the opportunity to review them and make a diagnosis.

Engineers must assess whether the devices can be repaired or whether they should be recycled or reused in some way, but most importantly, evaluating defective products should work to identify quality issues, identify the root causes of the problem and eliminate them.

HOW TO LOWER RMA RETURNS – ELECTRONICS?

The secret here is related to three pillars, DFR, RTM, DFM.

We’ll give you more details about these three pillars further down, but before, some general tips on how to lower return merchandise authorizations.

Avoiding RMA’s is of course what we’re all striving for, it saves a lot of cost and agony, and is critical for the reputation of your brand.

Complex electronic devices can, however, fail in many different ways, and some of the issues found in the FMEA (Failure Mode & Effect Analysis) can be so rare, or take so much time to prevent, that the economic cost/benefit simply is not there.

Perfection, arriving 2 years late at a price no one can afford, does not make a sustainable business.

THERE ARE 7 PRACTICAL STEPS TO LOWER YOUR RMAS

1. Build an excellent FAQ
2. Set Up an Online Forum
3. Put the Manual Online, Provide Only a Quick Set-Up Guide
4. Ensure Proper Maintenance
5. Provide Spare Parts
6. Monkey-Proof the User Interface
7. Design-in Error Codes

1- BUILD AN EXCELLENT FAQ

A good, easy to navigate FAQ and or troubleshooting guide, can prevent lots of customer complaints, and save your people a lot of angry phone calls.

I put this as No.1 because this is often the easiest and fastest to implement, even after products have been shipping for years.

Many people like videos, so do those, but also make sure you have everything in writing, so your customer can “Google” their problem.

2- SET UP AN ONLINE FORUM

If your product has been sold for a few years it’s generally a good idea to do a web search on the product to see if people are complaining about it in on-line forums.

If you have many different products with many failure modes it may be best to host these kinds of discussions on a forum on your own site, where you can moderate the discussion where necessary.

3- PUT THE MANUAL ONLINE, PROVIDE ONLY A QUICK SETUP GUIDE

Many manuals are translated from Chinese into say French by someone who has never had the device in his hands, which makes them really hard to understand.

If you do need a manual, make it very picture rich, minimize language especially if you’re selling in various countries.

Instead of thick handbooks which one likes to have to wade through,  go for a quick set-up guide and put the rest online, where it’s easy to search and can be updated. Cheaper too!

A troubleshooting guide with a decision tree (is the LED blinking red? If yes then..) can work very well on-line

4- ENSURE PROPER MAINTENANCE 

An error code can also be used to nudge or even force the user into doing preventive maintenance. “Replace ink-cartridge.” “Call supplier for annual maintenance”.

A connected device can send these kinds of messages simultaneously to the end-user and the manufacturer.

Many companies actually make more money on their maintenance contracts or extended warranty than on the sale of the hardware, consider this.

You can even think of going for Product As A Service (PAAS) where your client pays a monthly fee for a guaranteed 99.9% uptime.

5- PROVIDE SPARE PARTS

If your device has consumables or parts which are bound to wear out, like an air filter, it is often best to provide them with a kit of spare parts, especially if they are cheap.

Some extra screws or say rubber feet cost little and show that you care.

Offering a kit of spares/consumables, perhaps as an “upsell, at the moment of sales is also a good option, as it is often really important that a customer has his device operational again ASAP.

In your product design, you will need to consider this, Design For Maintenance (by the customer himself).

6- MONKEY-PROOF THE USER INTERFACE

The user interface is more than what appears on a display and also includes the buttons and the general ergonomics.

Many product malfunctions are caused by improper use. Your device should ideally be so easy to use that no manual is needed.

7- DESIGN-IN ERROR CODES

Facilitate remote and preferably self-diagnosis of common errors by providing error codes, which the user can look up online, or tell to your service engineers.

For devices without a display, work with LEDs (i.e. slowly blinking blue) and sound.

3 STEPS TO COMPLETELY AVOID  PRODUCT RETURNS

1- DESIGN FOR RELIABILITY 

Design For Reliability (DFR) is something that a good product designer should work on from the very beginning of the new product design process.

The FMEA (Failure Mode & Effect Analysis) is used to identify all possible failures, and to calculate their chance of occurring.

Then you have to make a business decision on how far you can go to stamp out every possible error before launch.

Learn more about DFR for Electronics DFR for Electronics 

2- DESIGN FOR MANUFACTURING

Design For Manufacturing (DFM) is the process where you make sure that the design is well matched to the components and processes used in the plant where mass manufacturing will take place.

Do not design in a vacuum, make sure to have a very interactive process with all factories involved, starting as early as possible.

While there are a lot of DFM guidelines that can be applied to almost any electronic device, the equipment, methods, and supply chain of the particular factory who will do the final assembly will have a strong influence on the quality of the manufacturing and assembly process.

A great design manufactured in a poor process will have affect quality in two ways:

1. Obvious defects, which lower the manufacturing yield rate, which will raise your unit cost.
2. Hidden defects, which only become obvious once the product has shipped in the form of an RMA.

Jump to our Complete Guide on DFM for Electronics

3- RAMP UP SLOWLY, DO LOTS OF  TESTING

Most important of all is old-fashioned testing. Lots of it. Especially when you design a first-to-the-world product it is very hard to predict everything that can go wrong.

Do lots of testing with your prototypes, then with a small pilot run, then with a larger pilot run, and so on. Involve actual end-users as early as possible, they tend to produce problems that the engineers who designed the product never dreamt of.

To keep track of the many, many specifications which make up an electronic product we strongly recommend using a Requirement Traceability Matrix.  Learn more on RTM, the key to quality electronic product design.

FREQUENTLY ASKED QUESTIONS – RMA