Prepaid Return Labels vs Scan-Based Return Labels

By James Messer
Dec 18, 2020 every carrier treats returns differently. By default, if you pay for an outbound label upon creation, you also pay for any subsequent return label upon creation, too. Subsequently, any carrier whose outbound labels are scan-based also creates scan-based returns. There are advantages and disadvantages to both, while scan-based returns are preferable, they do tend to have stipulations. Whereas prepaid return labels can be cumbersome, but ultimately have very few other stipulations to be aware of. We’ll discuss all that and more! ShippingEasy is here to make your returns process as simple as shipping customers their packages. 

Scan-Based Return Labels

Scan-based return labels are the preferred method of return labels. These are labels that are only charged upon use—when a carrier scans them into their system. If you pay a monthly invoice for your shipping labels, then your returns will follow the same billing. Carriers that offer scan-based returns are FedEx and UPS. If you sign up for UPS through ShippingEasy, keep in mind that our integration is prepaid. We will discuss that more later. 

Advantages of Scan-Based Returns

The advantages to scan-based returns largely come down to convenience. Since they are only charged upon use, you can print them out and include them with outbound parcels. Furthermore, the event of a return requires less back and forth with customers; and saving time of course equates to saving money. As it turns out, including a pay-on-use return label is a major incentive for customers when buying from a merchant. In fact, 78% of consumers prefer to have a prepaid return shipping label with the return cost deducted from their refund. So, while there are some disadvantages to scan-based returns, their pros can outweigh the cons. 

Disadvantages of Scan-Based Returns

Scan-based returns seem like a good thing, no doubt. And overall, they offer a better experience. However, many of the more affordable shipping options for parcels weighing under about 5 pounds don’t have access to scan-based returns. This makes the convenience of scan-based returns a more expensive option for many smaller businesses—particularly if you sell lightweight items. 

Furthermore,  scan-based carriers not only have more expensive initial rates, but they also can add additional surcharges and fees onto your invoice. Frequently, these are things like fuel surcharges and residential surcharges (roughly $3.75 per delivery). One way to look at it is that carriers who invoice are more likely to apply additional charges onto a shipment. 

Prepaid Return Labels

Prepaid return labels are how USPS and UPS from ShippingEasy offer returns. As with their standard outbound labels, you pay for the label upon creation. While there are a few disadvantages to these, there are also advantages to prepaid returns. Furthermore, ShippingEasy gives you the ability to offer these to your customers with ease. 

Advantages of Prepaid Return Labels

Prepaid return labels may require a bit more work to send to a customer, but they also tend to be more affordable—particularly for lightweight parcels. What you pay upon creation is generally the final amount. Take UPS from ShippingEasy for example. While these labels are prepaid, they also avoid many of the common fees associated with standalone UPS accounts. For instance, residential surcharges are heavily discounted with ShippingEasy. 

Disadvantages of Prepaid Return Labels

The obvious disadvantage of prepaid return labels is that you pay for them even if you don’t use them. Furthermore, printing prepaid return labels require more action on the customer’s part. If a customer doesn’t have a printer, it may be challenging for them to print a prepaid label out. Luckily there are ways to provide customers with a returns process that they want! 

Email Customers Return Labels

The most common way to authorize and send a customer a return label is to do so through email. ShippingEasy makes that process straightforward by providing you with default return shipment email templates. Additionally, scan-based return labels may be preferable for large retailers, but many small businesses don’t have the order volume to effectively offer scan-based returns. 

We’re behind you

Here at ShippingEasy, we understand that these are trying times for small business owners across the country and world. Our team has been working to help business owners adapt—whether that means better understanding fulfillment processes or getting started with their first online store. Click below to read our tips on surviving COVID-19 as a small business.

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James Messer

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