What is RTO in eCommerce?
RTO stands for Return to Origin, a logistics term used in eCommerce that refers to the situation where a product, once dispatched, is returned to the seller or the warehouse due to certain issues. RTO typically happens when a package cannot be delivered to the customer for various reasons, such as incorrect address information, the customer being unavailable, or even if the customer refuses to accept the delivery.
In eCommerce, RTO is a common problem faced by online sellers, particularly in industries that rely on cash on delivery (COD) transactions. When a product is returned to the seller, it can lead to significant operational challenges, including lost revenue, additional shipping costs, and inventory management problems. In some cases, sellers may also face increased customer dissatisfaction due to delayed deliveries or failed transactions.
Factors That Contribute to High RTO Rates
Several factors contribute to the high occurrence of RTO in eCommerce. While some of these are within the seller’s control, others are related to external factors. Let’s look at the most common causes:
1. Incorrect or Incomplete Address Information
One of the leading causes of RTO is incorrect or incomplete address details. If the customer provides wrong or missing information during checkout, it can prevent successful delivery. For instance, a missing PIN code or a wrong street name can lead to delivery failures, triggering RTO.
2. Customer Unavailability
In cases where the customer is not available to receive the package, the delivery is likely to fail. If the delivery is a COD order, the customer may refuse to accept the product because they are not available or don’t want to pay for the item. This results in a return to the seller.
3. Refusal to Accept the Delivery
In some cases, customers may refuse to accept the delivery due to various reasons, such as a change of mind, an unwanted product, or issues with the product quality. In COD transactions, the seller may face this challenge more frequently.
4. Poor Customer Communication
Lack of proper communication from the seller’s side can result in missed deliveries. If the seller or courier service fails to provide proper delivery updates, such as estimated delivery times or notifications of delays, the customer may miss the delivery, leading to an RTO situation.