Returns Don’t Have To Be a Cost Center With Virgil Ghic From WeSupply - Ep. 65

July 23, 2025 | 46:42

In This Episode

Most retailers view returns as a necessary evil. You have to offer returns to stay competitive, but accepting unwanted or damaged products—and shipping replacements—drains resources and wastes time.

What if it didn’t have to be that way?

In this episode, Virgil Ghic, co-founder of WeSupply, makes a bold claim: returns don’t have to be a cost center. In fact, with the right strategy, they can even drive revenue!

The importance of designing your returns policy

If you want returns to be profitable, you can’t just implement a cookie-cutter policy.

Virgil explains, “If [you] are just offering a 30-day return policy, no questions asked, the chances of making it profitable are none. Most likely you're just going to lose a lot of money. But if you are designing the experience, designing the outcomes, designing the logistics behind the scenes … then you're going to have a profitable [policy]. Even if it's not profitable, you are going to decrease the cost significantly.”

How to make returns a revenue driver

Virgil shares two ideas for making returns profitable: encouraging customers to choose store credit and allowing in-store returns.

Store credit. To encourage buyers to shop from your store after making a return, Virgil recommends incentivizing store credit rather than cash back. “[Let’s say] you have a $100 item that you are exchanging for an $80 item. You can offer [the remaining $20] as a refund, [or] you can offer $25 as store credit.”
In-store returns. People who walk into the store to return a product usually end up purchasing something else. So if you have brick-and-mortar locations, make sure the in-person returns experience is smooth and convenient.

Data is everything

Of course, the best way to handle returns is to prevent them in the first place. For that, you’ll need data—lots of it. “If you have the data, you can look into it and … analyze it. You can take action on it.”

For example, consider a dress that lots of people return because of sizing issues.

“[Saying] it doesn't fit doesn't tell you anything. … If we are just asking the customer [is it] too big or too small, that's not actionable. Nobody knows what to do with that data.”

The solution? Get specific. Ask the customer exactly why the fit is wrong, then adjust the dress or refine the sizing description on your website. “[Once] you understand [the issue] … you give [the product] back to the merchandising team or the manufacturing team, and they can do adjustments. And they can maybe say on the website, this model runs big or runs wide.”

Transcript

Lori Boyer 00:00

Welcome back to Unboxing Logistics, everyone. I'm your host, Lori Boyer from Easy Post and woo. 2025 has been quite the year so far, and it is continuing to roll on. We have had so many great guests already this year and so many important topics to talk about. Let's just continue on with that wave. Today we are gonna be talking about one of our favorite topics.

Least favorite as well. But we are gonna be talking about returns. I think this is really important. It's a topic that we need to return to very frequently. And I have brought on Virgil from WeSupply. He, I'll let him introduce himself, but he is an expert on the returns industry. Virgil, tell us who you are.

Virgil Ghic 00:50

Hello everybody. My name is Virgil Ghic and I'm the co-founder of WeSupply Labs. And WeSupply is basically post-purchase experience platform. We specialize in the order tracking as well as the return side, but not limited to that. Specifically for the enterprise sector. We're working mostly with bigger retailers, and we help them from like split shipments, very unique use cases around that to, all the way to warranty, store pickups, curbside pickup, and BigQuery, big data analysis around that. So that's our specialty.

Lori Boyer 01:30

I love it. We have so many questions on returns. But today we're specifically gonna be talking about how, you know, a lot of times we talk about the loss kind of of money when it comes to returns, and today we're gonna be really diving into actually how you can kind of flip that on that on its head and make returns part of your growth and, and part of your strategy. So it's, it's a piece that we can't get away from, but because we can't get away from it, it's a great opportunity for us to be able to use it as a way to get ahead of the competition. So.

Virgil Ghic 02:02

Absolutely.

Lori Boyer 02:02

Virgil and I are gonna dive into all of that today. But first, a little get to know Virgil, a little behind the scenes Virgil.

An interesting thing we've been doing is our Reality Check AI.

What I've done is I've asked ChatGPT question about return. And I'm going to tell you what it says, and I just want your professional opinion on how it did. If it was off, it was spot on. And then I ask for a grade A to F on how well AI is, is knowing about our industry. So. We went into returns.

I asked ChatGPT specifically about returns in 2025. Specifically what it thought would be the biggest trends when it came to returns in 2025. Biggest issues that we can see, and this is what it said. Okay, I'm gonna pull it up.

Virgil Ghic 02:58

Okay. I'm curious.

Lori Boyer 03:00

Okay. I know it's always fun. Number one, it said that we will see an increase in the number of returns this year. That return rates are rising up to 30% even. It gave me an estimate. And that we should estimate that return rates in 2025 are gonna be higher than we've experienced in the past. Number two, it gave us three, so we're gonna go to that. Two, it said that we will continue to see retailers and ecommerce are gonna continue to see the use of technology and AI in optimizing their returns.

Number three, and this is the one where I'm a little questionable that we will continue to see a growth and a movement towards sustainability when it comes to returns. Okay, so first impressions. What did it get right?

Virgil Ghic 03:50

I think they're all right, but they are quite basic I would say.

Lori Boyer 03:56

Exactly. It's like, it's like the vanilla up there. Pretty easy.

Virgil Ghic 04:00

You can't go wrong with those answers, kind of thing.

Lori Boyer 04:03

Okay. So Virgil, we gotta give our AI a grade on how they did in their answer about returns. Hmm. So it was a little vanilla but accurate. So A to F. What kind of grade would you give it?

Virgil Ghic 04:20

Hmm. To this particular answer?

Lori Boyer 04:22

Yeah, for its answer.

Virgil Ghic 04:24

It's a C.

Lori Boyer 04:25

Just that answer.

Virgil Ghic 04:27

This is just a C.

Lori Boyer 04:27

Anything you feel like underneath that it might have missed?

Virgil Ghic 04:30

I think it's more complicated than that. You know, and if we think about why, let's, let's ask why, first of all. You know, why do we think, you know, returns are gonna increase? And, you know, there are many reasons. But probably one of them is, you know, looking at, you know, the current state of economy, you know? It's not the past, so people.

Lori Boyer 04:50

Yeah, right.

Virgil Ghic 04:51

You know, in the past they used to purchase something. You don't like it, you put it in a corner and you forget about it. It happened to me, and it happened to probably everybody.

Now people see, you know, a little bit different economic, you know, circumstances. So we see layoffs happening. We see, you know, interest rates are still, you know, crazy high. They're not coming down. So people are looking after their, their money, you know, more than they used to in the past, more than, you know, during the, let's call the pandemic era, where, you know, it was splurge of like, you know, nothing was optimized and then everybody was making a killing. And you know, those are the little things why I think, you know, people, brands are gonna see more, you know, returns.

Lori Boyer 05:42

You know what's so interesting is I'm kind of that person who's guilty of having, you know, bought something.

I have some curtains I bought a few years ago. I never got around to sending 'em back, even though I ordered new ones. But just today, literally this week, I bought my son new shoes. They were a little bit tight and I thought, oh, he's gonna grow out of these. I made an appointment on my, my calendar today.

I've got to return these. I cannot let these sit around because they were like $40 and it is exactly what you're saying. You know, we're all a little bit more conscious of every dollar kind of matters. Yeah. And I think that that's gonna be a big deal. And it's the same for companies. So I'm glad we're gonna jump into this topic because we're in an economy right now, it's kind of this sort of unsettled situation where every dollar matters. And I think that we're gonna dive into that one. One more thing that I want to talk about.

Virgil Ghic 06:31

Sure.

Lori Boyer 06:32

Who is somebody that you just really admire? I've been taking the time to kind of get to know and, and learn about mentors and, and just people who are good examples in the industry and outside of the industry.

And I would just love to hear from you, Virgil, who is somebody that you really admire and why do you admire them?

Virgil Ghic 06:48

Great question. So I have two mentors that I work closely, you know, for the past five years at this point. Six. One of them is called Dan Martell. He's the founder of SaaS Academy. I was one of their earliest, you know, cohort and, you know, still there.

So you know, I think I learned a lot there around, you know, like growing your business and everything. What I really like about him is you know, he's always emphasizing on having a clear vision. If you know exactly where you wanna end up, you're gonna get there much faster. It's like going on a road trip without a map, you know, without a clear destination versus having a clear destination.

And when you know exactly where you want to arrive, when the team knows exactly where we, they need to arrive and what's the destination looking like and how it will feel, and what the company's gonna look like and what kind of customers we're gonna have, and It's very clear for everybody and not just for the management team.

You know, who should know it. And it's not about, you know, like the big things in the lunchroom area, you know, the mission statement. That's nonsense. You know, when I talk about, you know, like anybody in the company, you know, like, who are we? And they can answer it and it matches, you know, like what the founder's vision is.

You know, and that is communicated throughout. I think the brands, the companies, you know, will get there much faster. And I really like that, you know, that I learned from him. And focusing on that, knowing exactly where we want to get, you know, makes us get there much faster.

Lori Boyer 08:33

I love that. That is a huge point for all of us out there.

Everyone who's listening and hearing our, our Unboxing Logistics family, do you know what your end goal is? Don't get so tied down in the day to day. I think vision and, and visibility and understanding is a massive pain point for so many of us across the board when it comes to our businesses, when it comes to shipping, when it comes to everything.

Having that vision is so critical. I love that Virgil.

Virgil Ghic 09:05

Yeah, I have another one too.

Lori Boyer 09:07

Oh yeah, let's do another one.

Virgil Ghic 09:07

Yeah, because I had two mentors, you know, in the past few years. And the other one was Tony Robbins. So we've been working, you know, I'm part of like the Tony Robbins ecosystem, let's call it that way.

You know, for past like three years, I think at this point, two, three years, something like that. And that, that's been really, really great. And what I really liked there, what I learned from there, that was like, life changing, let's call it that way, is, you know, overcoming the limiting beliefs that you have as you know, as a founder, as you know, a company, et cetera.

And, you know, one of our thing was at the beginning when we started WeSupply, was like, okay, let's make customer support, customer experience better. Because I used to work in retail and after every weekend we had like 5,000 square 5,000 support messages, like, hey, where's my order? I haven't received the product.

Then customers were filing for, you know, chargebacks, you know, it was horrible. You know, this was whatever, like almost 10 years ago. And, you know, that was the first mission, you know, like make customer service, you know, effortless. That actually there's a book about it. It's called The Effortless Experience which is I think, like phenomenal.

But then it changed a bit and it changed into, how can we make shipping and returns profitable? Right. So that's like, it sounds like an oxymoron, you know, like, okay, it cannot be profitable because it's a cost center, just like support is a cost center. Well, it doesn't have to be support, customer support, customer success can be a revenue generator if the customers have, if the support team has time, you know, to talk with the customer to upsell, to help them, to guide them, to overcome challenging situations. Maybe the product is supposed to arrive before Christmas or before the birthday party and it doesn't arrive and it will not arrive. What are you gonna do then? You know? And by working really closely, you know, you can change that.

And I think the same thing applies, you know, in shipping as well as in returns. If we are just offering, you know, 30 day return policy, no questions asked. No nothing. The chances of making it profitable is none. Most likely you're just gonna lose a lot of money. Right? But if you are designing the experience, if you are designing the outcomes, you're designing the logistics behind the scenes, and you're spending time of like, how can we optimize this?

And constantly and overcoming that belief that like shipping and returns must cost us money into how can we make money off of shipping and off of returns, over time you're gonna find the ways. And going with that, challenging the status quo basically. But what are the limiting beliefs of growing the business?

And you know, today the brands will say like, oh, shipping is killing me. Returns are through the roof. We're losing so much money. Tariffs went up, right? Like, oh, we can't even get the products back. Well, if you think that way, that's a limiting belief. And you know, you're not gonna grow. But if you're think changing your mindset around it, you're gonna start understanding how can I optimize each little piece in my business to overcome that?

And you know, I'm happy to have this conversation with you because there are like so many ways of how you can do it, you know.

Lori Boyer 12:39

I love the whole concept of the limiting beliefs, of moving past those. I think that's huge for everyone in the audience. And this is a tidbit of background Easter egg knowledge for people who wanna know about Lori Boyer.

But I worked for Tony Robbins for a long time doing marketing with him. So we'll get along well. Spent many years with Tony so that's fantastic. Okay. You've gotten me so excited. You have teased a little bit already about the cost center and returns and overcoming that limited belief that returns have to just drain your wallet, and that there's nothing you can do about it.

Control's outta your hands. Sorry. That's like my, my junior high age students who, you know, sorry, mom, there's nothing I can do, but that's not how we are. Talk to me a little bit about returns as a cost center. Okay. I, I pulled up some stats. We've got 16% in recent years of retail sales were returned.

$800 billion worth. Where are these costs really coming from? Why, why is it so expensive, I guess first, for something to be returned?

Virgil Ghic 13:54

16% only?

Lori Boyer 13:57

That's what this sta- I know. I thought it was closer to 30. What is the number, you know, Virgil?

Virgil Ghic 14:04

Depends on the industry and vertical.

Lori Boyer 14:06

Yeah, absolutely.

Virgil Ghic 14:08

But fashion, 50.

Lori Boyer 14:11

Yeah, fashion is super high. There's a super, let's, let's actually break some of those down. Virgal. What are the industries that can expect to see the highest return rates?

Virgil Ghic 14:20

Ah, fashion.

Lori Boyer 14:21

Fashion, for sure. It doesn't fit. We know we have issues with people ordering, you know, 17 different types and planning to return 16 of 'em. Fashion is a big one.

Are there any others that are, are big on returns?

Virgil Ghic 14:36

Well they're all pretty big these days, honestly, unless it's like something, well, let's, let's just stick to fashion because there, you know, like there's the easiest way. Okay. Like why customers are returning too big, too small. Okay. That's like more than 50%.

I actually ran a report, you know, looking at the customer yesterday, and it was like close to 60. Just too big, too small.

Lori Boyer 15:02

Okay. So the majority of the reason it was just didn't fit.

Virgil Ghic 15:05

Yeah, it doesn't fit, but that doesn't tell you anything. Like it's just too big or too small. Like how is it big? You know? Like if we're looking at the dress, is it too big?

Like, do you mean too long? Is it too big as like too wide? Is it too big where? Around the top area? The hip area? Or is it just too, like on the bottom area? How is it big? So if we are just asking, you know, the customer too big, too small. That's not actionable. Nobody knows what to do with that data. But if we dig a little bit deeper, right, and it's like the first question is like, okay, it doesn't fit.

It's too big. Like how is it big? You know? And we can customize that, you know, per product. Too big is different for jeans, is different for dresses, it's different for T-shirts and is different from man to woman.

Lori Boyer 15:59

Okay, so the first mistake I'm hearing you say is that when people get a return, they're not asking enough questions about the why.

So for clothing it could be this sizing, you know, where is it to, you know, that kind of stuff. That's absolutely fantastic. Great. What else?

Virgil Ghic 16:17

And if you tie that data back, right? So now you understand that this is, you know, too wide or too loose or whatever, and you tie that back to the SKU level data, right?

So you understand that you know this particular item X like that, and you analyze it and you give it back to the merchandising team or the manufacturing team, they can do adjustments. And they can maybe say it on the website. Okay. This model runs big or runs wide around that area, size it down or, you know, buy, you know, upsell it with, you know, like a belt, you know, around the, the waist area.

You know, so you style it differently, so not necessarily all the time, you know, it's like, it's just too big, too small. Sizing is the biggest issue. It's 60%. There's nothing we can do. That's not like that. You, if you have the data, you can look into it, and if you look into it and you analyze it, you can take action on it, you know, and.

Lori Boyer 17:14

So, Virgil, what kind of data should we look for? So you're looking at why something was returned, what is there other data that people should be looking for with their returns?

Virgil Ghic 17:23

Oh, yeah. When do they return?

Lori Boyer 17:26

Okay. Right. So for example, why does that matter?

Virgil Ghic 17:29

Well, let's say it's the beginning of the season, right?

Let's say it's the summer season. You know, it's the beginning. If I purchase then something and you know, I have 30 days to return it, and then the last day I generate the return label, and then I take 30 more days to return it. You know, it's the end of the season. So at that point, by the time it's inspected, by the time the product is, you know, back on the shelf, if it's in that condition, in that condition.

It's already end of season. You already have to mark it down, even if it's in a perfect scenario. Now, if you buy it like mid-season, there's basically zero chance of reselling that product again, it for full price. So optimizing for how long it takes the product to get back in stock. You know, getting it back on the shelf, inspecting it fast, you know, another data point that you can use, you know, to optimize returns.

Lori Boyer 18:21

Okay. So let's talk a little bit about the solution for that. So let's say that you pull your data and you find out that a large percentage of your returns are not really resellable because of of timing are, what are the kind of hints, what do you do to try to address that issue?

Virgil Ghic 18:42

To get the product back on shelf faster?

Lori Boyer 18:44

Yeah. To either get the product back on shelf to just, you know, how do you avoid those costs?

Virgil Ghic 18:49

We don't have to reinvent the wheel. You know, there are like other bigger stores, but they have like 30 day return policy. But the first 15 days, 14 days, you know, they give you full money, right? And after that, they give you store credit.

So now they are just incentivizing you to to, to return it faster.

Lori Boyer 19:09

Okay? So incentivize fast returns. Love that. Love, love, love that.

Virgil Ghic 19:14

After you generate the label, you know, 30 day to return it. Like for the other, the other day I was returning some shoes and there was a check mark on the bottom. You know, it says like, I confirm that I will return the product in the next seven days.

I was like, what is this? But it makes sense because they don't want that product to come back in September. You know, they want it back as soon as possible. And even if the customers are not returning it in time, you know. At least majority will see that and will take action or it'll be top of their mind sending them reminders like, Hey, we see that you initiated the return, send it back.

You have only three more days to send it back. You know, stuff like that.

Lori Boyer 19:57

Do you have recommendations around how long? I, I know we said 30 days and then 30 days to. What are, I guess, kind of some benchmarks that people struggle a little bit with their return policies? Do you have recommendations for that?

Virgil Ghic

Yeah. So 30 days is fine, but it, if it's just like simple 30 days and there's no so no strategy behind it, you know, it's not fine. So for example, one of my favorite brands is REI, right? And they used to have a hundred like one year return policy, you know. And I love that, you know, but in their case, you know, maybe it works, you know, maybe it works from margin perspective or the type of products they have, you know so it depends.

But the whole point is just have a return policy that's designed to, for, that is optimized. It's not just like a D for 30 day. End of day, we can't do anything. That that will not work. So based on, you know, industry, there are many ways and maybe you cannot optimize on that part, you know, and it is what it is on that side.

But there are many other ways where you can optimize. When you receive the product back, let's say I have this T-shirt and it's a brand new T-shirt and it still has the tag on it, right? But it fell on the ground, right? And on the ground I have, let's say a dog or a cat, and now it has dog hair on it. So when it gets back at the warehouse, what do they do with it?

They're gonna look at it. They're gonna say like, oh, this product has dog hair on it. If you don't have like a roller to clean it up, you know the product will not be put back in stock as new. It will be as defective. And in order to fix it, all it takes is, you know, maybe with a roller to clean it up. If the tag is missing, maybe they can retag it.

So those are the little things where you can optimize. And the cost of the merchandising is like, is the highest as ever. You know, like the inventory that you already have in your warehouse is way more valuable than the inventory that's gonna come in, you know, in a month because of the current situation.

You know, it might be tariffs, it might be whatever it is. So what you have, you have to look at how can you repurpose?

Lori Boyer 22:14

I loved that. I just gonna pause 'cause I loved how you said the inventory you have in your warehouse is more valuable than the inventory you're gonna have it in a month. And I think sometimes we forget that, and we forget about the importance and so, can we back up just a little bit? You'd mentioned earlier data that they should look at in the re- in the warehouse or, or when it comes to the return in the warehouse, what, what other data should we be looking at there?

Virgil Ghic 22:39

Yeah, so first of all, I think understanding how much return cost, you know, is very basic stuff that's wrong most of the time.

So when most of these reports are coming in, it's like 800 billion is what the value of the products returned. Or the full cost. 'Cause we only look at the full cost. Is the marketing cost to acquire that customer? Is the labor cost to ship out the product? Then the time, the opportunity cost, you know, while it's lingering around, then it comes back.

Then it's the return cost, then it's the return processing cost. Then there's the customer support cost. They're all these costs. So on a hundred dollars return, does it cost you a hundred bucks? Probably not. It's cost you way more than that. And if the product comes back and it's, you know, defective, it doesn't have a label on it or it just has dog hair on it, that can be cleaned up, you know, and resold as brand new.

You know, because it is brand new. It was never worn, it just fell on the ground for a second. If we factor in all the costs, kind of like having a profit and loss, the P and L, you know, in returns, then we really understand and just by understanding the full cost will open up so many opportunities of optimization.

Lori Boyer 23:59

I have to say it again. So Virgil, another huge point there. If you have understanding and visibility of every cost point and it, and it sounds like from what you're saying, each business may be slightly different on where they have, you know, different cost points, but. Look at your own unique business. If you understand the cost in every spot, then you should be looking at each one of those spots to optimize.

Is that right?

Virgil Ghic 24:23

That's correct, yeah.

Lori Boyer 24:25

Oh yeah. That's brilliant.

Virgil Ghic 24:25

The time it takes. Yeah.

Lori Boyer 24:27

Okay. So.

24:28 Virgil Ghic

And the opportunity. You know?

Lori Boyer 24:29

Yeah.

Virgil Ghic 24:30

And when you tie it back, so for example, most of the companies are looking like they, they have departments, right? And interdepartment conversations are, I think, the hardest thing in the world to solve.

I don't know why, but it is, you know? And everywhere I worked it is like the hardest thing. So you have the marketing team that's acquiring customers, right? And then you have the warehousing team, right, that's processing the returns. If we have a real good understanding which channel is generating the most returns, the most fraud, the most, the slowest customers.

Yeah. Maybe TikTok works fine from a cost of acquiring a customer, right? Acquisition cost is really low and it looks phenomenal, but at the end of the day, after the return is done, is it still the best channel or is it, I don't know, a different, Instagram is the best channel or Meta or whatever. Having that understanding brings a lot of clarity.

Lori Boyer 25:32

So it could be that the marketing channel you've chosen brings in 10,000 customers, but 9,000 of those customers return something. That's, that's super smart. So to look at each of those touch parts connected to each other. Kind of brings me back to what ChatGPT had said earlier that the second, you know, big trend was technology.

Obviously it sounds like technology is key to being able to have this visibility for everything. Yeah.

Virgil Ghic 26:02

And, and dig deep, you know, 'cause it's a different thing, you know, like which region you know, is not aligning with the product? You know, maybe some people from a specific area of the country, you know, are more prone to return those products because this just doesn't fit the climate, you know, in that area. Having that understanding is important.

Lori Boyer 26:24

So look at everything. It could be, look at the region that. I guess what you're doing is as you're looking at the data, you're looking for red flags, like, oh, in marketing, this source is getting a lot of returns. Geographically, this area brings a lot of returns.

These specific products are being returned frequently. And then everything from in the warehouse, we're having slow turnover of certain products or, or whatever it is, so that you can then hone in on each of those areas. Can we flip it a little bit, Virgil, and talk about the, making it actually kind of profitable for you.

This is a part that's a little crazy. I was recently reading an article by MIT Sloan and they were talking about a business that had actually changed all of the way they did their returns and, and actually ended up with making an additional profit. I think it was like $22 million of profit just because they switched up returns.

And I think that's just mind blowing to even think of returns as a profit center. What, what does that really mean for you? How, how do you turn returns into kind of a revenue driver?

Virgil Ghic 27:32

Great question. Let me give you an example how you can turn shipping into a revenue center, right? So that, that's like a clear example, right?

So we have this we have a pretty big customer and they have, you know, stores, it's a retail, right retail chain. And they have a lot of stores, and they have same day delivery. Right. So they have ship it home, you know, free shipping, same day delivery, no, same store delivery, you know, it call, it's free.

And then they have a premium version, two hours, same day delivery. The day they announced it and the day they implemented it, more than 40% of all their orders chose same day two day, two hour. Instead of losing money, you know, free shipping because when you have like long time, you know, you have a lot of costs there.

You know, you have customer support costs. Customers are unhappy. Where's my order? When do I get it? Then you might have damaged items, you have packaging, you know, all kind of stuff. When it's fast, you're eliminating a chunk of those, right. Now the customers are paying premium, you know, like 11, $12, you know, for same day delivery.

Super fast. They get it faster. Customer support drops, you know, there's no need for packaging for big boxes because you're just delivering from a store, you know, to, to the customer's location. You are optimizing. Now, not everybody has retail locations, but that's just one little example of like, same day delivery costs us so much money.

Yes. But if you're playing around with it, you know, and you offer a premium service instead of paying, you know, for free shipping, you're making money and they're actually making 2 $3 per each shipment.

Lori Boyer 29:20

And I love that because I love how you mentioned the customer support and the customer service because again, it's keeping an eye on all the costs, and not just thinking about, oh, this was the shipping cost, but the customer support costs went down as well.

And I would have to think, returns have the potential for really boosting that kind of customer lifetime value I that process. If it's bad for me, I don't really wanna shop with people again. So how does that play into it?

Virgil Ghic 29:52

So there you have a customer, they purchase something and now they want to return it.

The easiest thing is, you know, like, yeah, here's the money, but oftentimes the customer doesn't want the money back. They just want, you know, a different size or they want, you know, a different product. Maybe this product is a little bit, you know, just doesn't fit. They need more features or they need, this is an overkill.

Like the other day, I purchased something around the house and the product was phenomenal. It was just this big. I needed a product that was this big because it doesn't fit, you know? It's not, 'cause I didn't like the product, it was just too big. So I purchased a smaller version and guess what? The smaller version, of course is more expensive 'cause it's more, you know, high end, you know, like it's like the turbo, mini whatever.

And that one was more expensive. So now, yes, I tried out, you know, I did an exchange. So I did not give, the company did not give me the money back to go and shop somewhere else. They converted me from the one product to a more expensive one. And when we think about exchanges, it's like you have multiple exchanges.

You have even exchanges. You know, a hundred bucks for a hundred bucks, that's great. You're not losing the customer. Then you have a hundred dollars for $120, right? Then you're making $20 and you can incentivize this. You can give additional like 10% or additional $10 to do an exchange or convert it into a store credit.

One of my favorite is you have a hundred dollar item that you are exchanging for an $80 product item. $20. Yes, you can offer it as a refund, right? But you can also offer, you know, maybe $25 as store credit. And store credit is a new incentive to come back and purchase again, right? Those are like little things.

But $25 is quite significant. You know, like you can actually purchase something with that money, you know? And now you're incentivizing the customer to take store credit over cash. So they're coming for a store credit and then it's less than, you know, you pay for marketing. Yeah.

Lori Boyer 32:05

I had a friend who was considering doing something else, tell me what you think about this, with their returns policy. He was thinking about when somebody exchanges then offering like, hey, as part of your trouble you could have 20% off of any additional purchases. So it just kind of that encouraging them to buy more, but also seeming like, oh, so sorry for your inconvenience.

But in an effort just to boost more sales and I, I, it really does. It seems like there's a lot of creative ways that you could encourage more during this process.

Virgil Ghic 32:40

Yeah, especially if you have physical locations. So most of the brands we work with are retailers, right? Like they have web presence, but also stores.

And if you're returning something to the store, if you're returning something. You want to incentivize returning to store, okay. That's like work, being in Vegas, right? You don't walk into a casino and not spend your money. It's impossible. So that's basically how it happens. You know, you incentivize people, you know, or like invite them, you know, and sometimes you don't have to give them more money back.

It's just faster return, faster cash back, you know, effortless experience, et cetera. And how can you create that environment? Well, very simple. They come to the store. The moment they walk into the store, they're not gonna walk out with more money. The, it's not the so true, but it's true. You know, like there's data that proves it.

You know that as soon as you walk into the store and you get like a hundred bucks back, you are gonna look around. You're most likely gonna find something. And you know, taking that even further, you know, how do you make that again, cheaper? If you ship it back, it costs you money as a brand, you know, $10, you know, $20, you know, the return cost.

But if you have stores, you can have curbside returns. You can, and everybody's busy these days, right? You're picking up the kids from school, they're in the back. You just walk, stop by the store. You open the trunk, you check in, you click the button, they're coming out. They know they have to exchange this product for that, and it's effortless.

As soon as you create an effortless experience for the customers, they want to come back. You know, especially, you know, if you're selling products for people who don't really have time. You know, I don't have time to go. You know, like the other day I have this coffee machine and it's broken now, right?

It's a really phenomenal coffee machine. I have to return it or, you know, warranty it. The first thing that came to my mind, it's big, right? What kind of box do I find in which I can put this. Right now I have to go to, I don't know, Home Depot, find a box, buy some peanuts or whatever, you know, so the product doesn't get destroyed by the time it gets warrantied.

So all that's headache. I don't have time for that. So making it easy, you know, for example, dropping it off at FedEx, you know, and they give you the poly bag. They print out the label for you. It's just easy, you know? And now it's not just true FedEx, you can do it I think at Kohl's, at Walgreens, they're like so many easy.

Lori Boyer 35:11

I had to say my daughter, she always returns her Amazon packages to Kohl's. You know, you have the thing where you return to Kohls. They give her $5 Kohl's cash. She spends money every single time. She never spends $5. She's always buying a $20 blanket. So you are so right.

Virgil Ghic 35:29

And they put the, the, the Kohl's returns, you know, all the way in the back.

Lori Boyer 35:33

Yep, exactly. Hey, that is another great point. It's like sometimes getting through the store, seeing all the things. There are so many different ways. I wanna ask, one of the things actually my daughter just had was she just told me today during lunch, she said, oh, I want to return some tights. And they said, just keep it, okay, just keep it.

Here's your refund, blah, blah, blah. How do you decide when to just say, keep it at it's more money than it's worth, you know, do you have suggestions around that?

Virgil Ghic 36:03

Oh yeah. You just need to know your numbers. So honestly, it's that simple. And so for example, if, but rule of thumb, around 25 bucks, $30, below that, it's not worth it to return because it costs you more, it's cost you more the label to return it, the labor to open the box.

The product to be inspected. What do you do with that product? If it's not good to be resold, then you have to pay for, you know, like destroying the product. So that might cost you more than just. Keep the product and oftentimes, you know, that product is in perfect condition and you know, they can gift it to somebody.

And that's always good. I remember once I purchased some toys for my kid, you know, and for some reason we had to return it and they said, just keep it. I'm like, oh yeah, but my kid cannot use it. Oh, but you know, I have some nieces, you know, so I gave it to my niece, you know, and that was great. So there's always ways, you know, to optimize that.

The other thing is, so what happens quite often you have, you know, a contract with UPS, for example, and you know, like you're using that rate, you know, for shipping, you're using that for returns and everything, and you never even explore, you know, like what's what other carriers are offering. You know, they're cheaper version, you know, maybe specific routes are cheaper through FedEx or through USPS or other local carriers, right.

And doing rate shopping and not just rate shopping for shipping, but also rate shopping for returns. And especially in returns where you want to optimize every penny. 'Cause maybe it's the same thing, 'cause it arrives in two days or three days. It's not that big of a difference. You know, maybe you can optimize there, but if you do the numbers, you know, and you do the calculations at the end, end of the month, at the end of the year or quarter, you might be saving a ton of money.

Right. But it's so easy to just say, oh, we just return everything through UPS. You don't have to.

Lori Boyer 38:05

I love that. That is exactly one of these kind of outdated mindset. And I love that you've talked about rate shopping, not just for shipping, but for returns as well. These are kind of outdated. Ah, it's easiest. I'll just deal. In today's economy, every single dollar matters. It means that you can ship returned. If you can return things way cheaper with one carrier over another, go and do it because it absolutely makes sense. Okay. Virgil, I am feeling sad,, we're running low on time, so I wanna get from you.

If somebody wanted to start today, what is some low hanging fruit? What are like your first steps? If somebody's like, okay, Virgil's right. I'm sure I've got some mistakes here. What, you know, how should, how do you recommend they start today? They can get out and get started on making some changes

Virgil Ghic 38:58

Around shipping and returns or just returns or just ...

Lori Boyer 39:00

On returns specifically.

Virgil Ghic 39:02

On returns specifically.

Lori Boyer 39:03

So let's say they're like, okay, I know I'm bleeding a ton of money with my returns. What should I do? How do I just get started without being overwhelmed?

Virgil Ghic 39:13

Number one question I have usually is like, we have some data, but we don't know what to do with it. That's like one thing, you know? Okay. Because it just says too big, too small. That's not actionable at all. And spending a tiny bit of time, you know, configuring your return policy, your flow when you're returning products, you know, to really understand how is it too big? How is it too small? By product by category, you know?

It doesn't take much. It's like a half a day of job. Within a month, you have more than enough data to really understand what's happening there and give it back to the merchandising team to optimize it. That's like number one.

Lori Boyer 39:53

Love that. You've got to get the data that you need.

Virgil Ghic 39:57

Yeah.

Lori Boyer 39:58

And, and about a month is what you said you need.

So that's, that's fantastic. Great, great. Measurable thing.

Virgil Ghic 40:03

When you're receiving products, you need to inspect it, right? The inspection process for a T-shirt is very different than an inspection process from a water bottle. There are two completely different products, so you must have a res, an inspection process for this product that's different than this T-shirt, and if there's something wrong with the product, you don't just say like, this is not in brand new condition, so we have to dispose it. You know, you have to ask yourself, what can I do with this product? How can I save this product? Can I resell it on a marketplace? Can I start a resell program of used products? Can I just take a lint remover and remove the dog hair from it?

Can I give, you know, like a, a, you know, label, you know, to put the labels back on the product. That's easy stuff. You know, if this product's box is damaged, do I have replacement boxes? But oftentimes in the past at least, and I know some companies who did not took the time to even open the box because it cost them too much to open the box and they were just trashing everything.

Well, they are not doing that anymore, that's for sure. Now they're opening every box. They're inspecting every product, product. And if it's a little bit scratched, they're reselling it as scratched, you know? But have, doing that is so easy. Like you can do it tomorrow. You don't need new technology, you don't need anything.

You just need an SOP and you need to have the willingness to do it. And if you're working with the 3PL, you know, because they are doing their returns, you know, provide them with software or ask them like, hey, can you fix my products? The product, if the box is damaged, let's put it in a brown box, you know, and still resell it at like 20% discount as open box or you know, damaged box or whatever you want to call it.

But don't just discard it.

Lori Boyer 42:06

Yeah. That's fantastic. So have a plan and a process kind of for each product or each category, that you're not approaching every return in the same way. Really smart. I love that. Anything else?

Virgil Ghic 42:17

The policies, you have to look at the policies, of course. You know, like don't just have like a simple 30 day.

Design it. Your life is by design. If you design your life, you're gonna have a good life. If life just happens to you, you know, then you're not gonna have a great life. Right? But if you design your life, you're gonna have a great life. So if you design your return policy, you know, with some, you put some neurons in there, you know, then you're gonna have, you know, like a profitable, you know.

Even if it's not profitable, but you are gonna decrease the cost significantly. Shop around for, you know, easier, cheaper ways of returning products. You know, like have, you know, rate shopping, it doesn't matter. It's coming back at that point, you know. But the most important, look at how can you decrease the return rate. And oftentimes, it's like the answer is so simple. You know, you might have a super talented graphic, you know, like photo processor who just wants to make the red to pop a little bit more, but that red is not the red that when you receive it and looking back why they are returning, you know, and what can you do? And most of the solutions are on the website, just saying too. It runs a little bit big, runs a little bit small, you know.

Lori Boyer 43:32

I just wanna encourage everyone who's listening, start small. You don't have to do everything at once. So start with one of these hints. Get out there and say, I need more data, and now I'm gonna test this, and you can refine it.

So obviously, don't just create a return policy and say, okay, I've done just what Virgil said. I've thought about it. Well, maybe in six months you're gonna want to change it based on what you've learned. So don't leave those things as stagnant. Everything needs to continue to grow. Virgil, I want you to tell us a little bit about WeSupply before we go, we're just about out of time. But tell us what, what, what you do at WeSupply.

What, what the company is.

Virgil Ghic 44:07

WeSupply is a post-purchase experience platform. We're doing order tracking, notifications, returns, exchanges, warranties, product claiming, you know, for warranties. And then we have an entire in, in-store suite, you know, like curbside pickup, return to store store notifications, basically everything there.

And what's really cool is we're taking all this data so you can already imagine the amount of data that we have. Yes, massive. And all this data, it's available in our system, of course, you know, but we're funneling it to BigQuery. You know, BigQuery being this big data platform, right? Database. From there you can come connect it to your business intelligence platform, to your looker dashboards, to whatever, you know, wherever you want to report it.

And you can look into these data points, you know, getting, you know, like very deep into like why customers are returning. Understanding, having the data to back it up and then making changes, understanding which areas cost you much, which little, having the intelligence and then optimizing every part of it.

And at the end of the day, you will make returns profitable. And I truly believe that it's, it's doable.

Lori Boyer 45:29

Love it so much. Virgil, if people want to. Ask you questions about returns or just connect with you in general? Or if they wanna learn more about WeSupply and, you know, get some access to this data.

What, what are the best ways to do so?

Virgil Ghic 45:42

Well, they can reach out to me. Probably LinkedIn is the best place.

Lori Boyer 45:46

LinkedIn is great.

Virgil Ghic 45:47

I'm not even checking my email these days. It's just spam.

Lori Boyer 45:52

So good to know everyone.

Virgil Ghic 45:55

One hour, you know, or whatever. We took us, you know, to talk, I got like five spam messages. You know, like spam phone calls. So LinkedIn is still the last thing that I'm like checking to some degree.

Lori Boyer 46:09

Perfect. Perfect. So connect with Virgil on LinkedIn. Do you have a website for WeSupply?

Virgil Ghic 46:15

Yeah, it's wesupplylabs.com.

Lori Boyer 46:18

Wesupplylabs.com and we'll include that link. So thank you so much, Virgil.

I wish we had about 10 more hours. I think we could cover all of it, but it's been fantastic. So many great takeaways from today. Thank you everyone for being here, and we'll see you next time. Thanks, Virgil.

Virgil Ghic 46:34

Thank you. Bye Bye.