Brexit's really coming this time - is your retail business ready for returned goods after Brexit?
by Laura Gee
Nothing says Merry Christmas like the UK divorcing its European neighbours, but sadly this separation won’t mean two Christmasses with Mum and Dad.
With everything that's been going on this year, you might have almost forgotten that Brexit is still a thing.
But the EU hasn't forgotten – and if you're a retailer selling goods into Europe, you've got less than a month until the transition period deadline of January 1st, 2021.
We'd love to tell you that every UK retailer is prepped and ready for the big changes ahead. But according to the latest statistics, a huge number of businesses don't have the right measures in place just yet.
A recent study from PFS found that only half of UK retailers think they'll be ready when the new rules come into place next month – and nearly a third of retailers have done nothing to prepare so far.
So what do the new rules mean for retailers selling into the EU next year? And what kind of impact could that have on your returns?
Let's get into it:
Why do you need to consider returns?
Despite the looming deadline, it's still not clear whether the government will reach a trade deal with the EU. Although every day the chances of this happening seem less and less likely.
So if you want to be sure you're as prepared as can be, you'll need to be ready for the possibility of a no-deal Brexit. And that means there’s likely to be customs checks at the UK border, not just for your outbound orders but for your returns too.
While the customs clearance for outbound orders is relatively straight forward if you know what you’re doing, the returns leg is much more problematic for retailers, especially if you’re still using in-parcel return slips. This is because the onus then lies with the shopper to fill out all the information correctly for the goods to clear customs. That might not sound too problematic, but when you consider that if they get any information wrong or miss anything out the goods will end up stuck at the border racking up storage fees or land you with a bill for import taxes and duties that shouldn’t need to be paid, the need for a solution suddenly becomes very apparent.
Now, let’s imagine these returns do get stuck at the border. Two key things become a problem for retailers using in-parcel returns forms:
- You’re unable to know what’s being returned as without the parcel you have no visibility.
Because of this...
- You’re unable to refund your customer so they're left waiting on their refund for who knows how long? 🤷
It’s a pretty dire situation all round.
And that could lead to some very unhappy customers
If you're a retailer selling into the EU post-Brexit, you've got a lot on your plate.
But there's a good chance your customers will be expecting the exact same service they've always been getting – with the same delivery times, and the same turnaround on your returns and refunds.
So while you might be painfully aware of all the extra red tape, your customers won't be. And that could mean you'll be looking at a massive upsurge in complaints coming your way.
More than a third of UK retailers (34%) are expecting an increase in customer complaints in the first few months of 2021 as a direct result of Brexit. And to make matters worse, 55% said their contact centres won't have the resources to handle those complaints properly.
So what can retailers do now to prepare for EU returns?
With the January deadline just around the corner, the clock's ticking. And that means it's time to act fast.
We caught up with our COO, Phil Smith, to get his opinion on where retailers should start, how ReBOUND have prepared and why Brexit is extra challenging at this time of year.
Q: What role does ReBOUND play in Brexit planning?
“Lots of retailers are looking to us now to ensure business continuity post-Brexit. So where before they may have either not been using a returns solution at all, or were just using ReBOUND on a SaaS basis, they’re now preferring to take advantage of our managed service and expertise.
A lot of our biggest customers really Brexit-proofed themselves by opening up returns and fulfillment centers in the new EU, so our position there has just been to support that and re-route parcels to these hubs. With that in mind we’ve just needed to make sure that for retailers where opening these hubs isn’t viable, that there’s a robust network there they can rely on.”
Q: What’s been the biggest challenge for ReBOUND whilst Brexit planning?
“The biggest challenge has been having to re-engineer our network in the EU to minimise risk and touch points. It’s not necessarily a hard thing to do, there’s just lots of complexities to pick through. For example, it’s not just EU returns back to the UK to consider, but we also handle returns from UK back into the EU and returns from ROW back into the UK or EU. So there’s loads of combinations we’ve had to pick through one by one and reassess if what we’re doing will continue to work post-Brexit, and what the risks associated with that are.
ReBOUND have been doing non-EU returns for the last 4-5 years now, and cross-border returns were our specialty when we first launched ReBOUND, with our domestic and intra-EU services coming later down the track. That means we’re able to extend what we’ve already been doing for ROW countries for the last 5 years or so into the EU.
So whilst it’s certainly complicated, there’s not many scenarios we’ve come across through Brexit planning that we haven’t already covered in some way or another.”
Q: Does peak pose any additional challenges with Brexit planning?
“Absolutely. I have to say that whoever decided to put the Brexit deadline slap bang in the middle of the busiest trading period of the year has a wicked sense of humour. We’re already seeing carriers start to creak at the seams from peak and Covid volumes, so when you add Brexit into the mix things really start to get interesting.
It’s definitely an unwanted distraction from trying to keep goods moving at the busiest time of year. I think that’s partly why we’ve seen such a large influx of retailers looking to us to sort this for them. By opting for our managed service, they can pretty much wash their hands with returns and not take their eye off the ball with their outbound peak volume.”
Q: Who else have ReBOUND had support from with Brexit planning?
“We’ve done a lot of work with our customs clearance partners, who are all in constant communication with Government advisories. Obviously we’ve also been in constant communication with our carriers to understand their post-Brexit plans too. So we’ve definitely had the right people by our side.
Overall now though we’re as ready as we can be. There’s always going to be unknowns and complexities outside of our control, but as well as having support from people like our clearance partners, we’ve also got a great team internally that knows what they're doing. This has meant that we’ve been able to prepare lots of contingency plans to keep parcels moving when 1st January hits.”
Q: How prepared are retailers for Brexit?
“It’s a real mixed bag. On the whole we’re finding that a lot of our biggest customers were prepared months and months ago for the first Brexit deadline. But then on the flip side of that you’ve got retailers that are only just coming to us now looking for a solution.
I’m not sure if retailers were hoping everything would be okay and a deal would be put in place and now they’re realising that’s not the case, or if they were just too busy and that’s why this late flurry of activity is happening.
For us, it’s not just a case of retailers being ready. There’s also a number of carrier services that are still undecided how they can continue to operate post-Brexit, so have decided to temporarily disable their service. So what we’ve had to do is secure routing with carriers we’re confident have a robust Brexit plan, and then also make provisions for if that falls over for whatever reason.”
Q: Why have ReBOUND opted for a consolidation model for returns?
“We’ve gone down the consolidation route in a number of lanes for a few reasons, not least being cost. There’s also the fact that if retailers want to offer genuine choice then they need to offer those local first mile providers that can’t offer anything beyond delivering to a local in-country address.
From a Brexit perspective, it enables a more streamlined customs clearance process. It allows for parcels to be added to a manifest and cleared in bulk at an in-land clearing station, rather than odd parcels here and there needing to be cleared individually from the back of a lorry at the coastal border. We’re already hearing stories of delays at the border so our consolidation model, in combination with the data that the portal provides, allows us to clear goods as efficiently and as risk free as possible to ensure that above all else retailers get their goods back.”
Q: At what point will we switch to our Brexit ready network?
“There’s a roll out plan that has already come into effect. We’ve already switched over a number of services, and there’s more to come before this year ends. The plan is that by the time 1st January hits we will have already been running our full Brexit network for a week or 2 so will have ironed out any teething issues. This also means that shoppers aren’t going to be able to send their return down a route where it’s just going to get stuck.”
Q: What’s your one piece of advice for retailers who haven’t yet looked at returns?
“Well I think fundamentally they’re going to have issues. My biggest piece of advice would be that you can’t do nothing, or rather, you can’t keep operating in the same way and expect everything to be okay.
We know some retailers are arguing that customers can just use their local post office to send the goods back. This may well be true, but then you’re leaving the responsibility of customs declaration in the customers hands, and they are neither returns nor customs experts. So understandably, doing this can land retailers with enormous import taxes and duties to pay as the goods haven’t been declared properly as a return.
You’ve also got the label in the box argument, which I think a lot of people forget gives them no visibility. So if returns are stuck somewhere, you’re not going to know about it until you’ve got customers contacting your CS agents, and even then you have no idea where that parcel is or what’s included in it. With a returns portal, you at least know what’s in the parcel and where it is so that if unprecedented delays do happen, you’ve got the data you need to refund your customers quickly to avoid a headache and huge costs for your CS team.
Ultimately, there’s still some time left. It’s better to start preparations now and miss the boat by a couple of weeks, than wait for everything to fall apart before you even start searching for a solution. So if you fall into this camp, I recommend reaching out as soon as possible really.”
Q: How do you feel about how ReBOUND have prepared for Brexit?
“I take comfort in the fact that we’ve been doing this for a long time, and that non-EU returns and imports are nothing new to us. If you look at our volume, we probably do more Non-EU returns than anything else, so we know what we’re doing. We’ve done everything we can think of to prepare, so now we just have to deal with whatever unknowns are thrown at us that will be beyond our control.
Covid proved to be a great test for us in terms of finding new routing at a moments notice and having to monitor the network so closely and we came through that brilliantly, so from that perspective Brexit should be easier because at least we’ve been able to prepare. We’ve got a fantastic team that knows what they’re doing, so I take comfort in that. We’d all like more time, and we’ve had to make some tough calls and decisions that given more time we may have done differently, but in the grand scheme of things it’s all about business continuity for us and our retailers.”
It’s great to hear from Phil on how ReBOUND have prepared for a no-deal Brexit and get his advice for retailers just starting to look at their returns.
Understandably, Brexit is a huge topic, you may still have some questions or be unsure where to start, so we've got the perfect resource to set you on your way:
We've just released our latest eBook, "Preparing Your Returns Proposition for Brexit" – packed with all the information and tips that UK retailers need to know to help them get prepared for returns after Brexit.
So if your business is hoping for a smooth and painless Brexit transition, it's time to get ready: click below to download the eBook for free.