When people purchase items online, they do so more often from companies that offer a comprehensive returns policy. In most cases, customers see a generous returns policy as the ultimate in online customer service. After all, shopping online lacks the tangibility of shopping in person and while most, if not all, companies will take something back if it’s damaged, the ones who offer a broader returns policy are seen as being especially customer friendly.

While it’s a great selling point for customer service, it also actually benefits the company itself in another way. More and more companies are using liberal returns policies as a way to gain insight and data that can improve inventory management and even vendor relationships.

Whenever a person does a return on an item, they are invariably asked why they’re returning the item. For companies that promise you can send something back for any reason that means they’re getting honest and frank feedback on specific items. By studying these returns, companies can learn about:

Flaws in entire shipments from a vendor that the warehouse or receiving team may have missed. They can then use this data to flag other items in the shipment and reach out to customers who haven’t placed a return. These customers may not have noticed the flaw or maybe they just didn’t care. But having a company reach out to them strengthens the relationship and makes customers feel wanted and appreciated.

Changes in materials used by vendors. This often happens in clothing where a company will begin using a different fabric on an existing line. For some customers, the change isn’t a welcome one and they begin to return the product. Online retailers can spot this trend and then identify alternative vendors who offer something similar in the original fabric.

Planning for future inventory. Online retailers can use returns data to spot products they thought would be extremely popular but which fall flat. They can associate returns data with their inventory solution app in order to change future orders for the product or kick start a more aggressive campaign to sell overstock quickly.

A company that offers great returns gets double their efforts in return. Not only do they appear as being customer-centric they can also use the data to tweak and refine their inventory. Using returns information this way is a smart way to do business now and a great way to plan for the future.