A manager wanted to know what’s causing the increase in return rate (from Dec’15 to Jan’16). Root cause analtsis (RCA) was performed to figure out what’s happening with return rates.

1. Root Cause Analysis (RCA)
Amaron Case Study
Shu Tsao
10/10/2016

2. Seasonality vs Total Orders
• ↓ 8.6% from Oct-Nov
to Dec-Jan.
• No ↓ from Dec to Jan.
• Seasonal issue.
31.0%
27.6%
20.7% 20.7%
Oct-2015 Nov-2015 Dec-2015 Jan-2016
Order % by Seasonality

3. Top 10 Categories
Product ID Rank Super-Categories Categories
PRD109 1 Electronics Geysers
PRD155 2 Home & Kitchen Air Fryers
PRD108 3 Electronics Geysers
PRD154 4 Home & Kitchen Air Fryers
PRD152 5 Home & Kitchen Air Fryers
PRD106 6 Electronics Geysers
PRD156 7 Home & Kitchen Air Fryers
PRD153 8 Home & Kitchen Air Fryers
PRD107 9 Electronics Geysers
PRD147 10 Electronics Trimmers
Geysers in the Electronics
and Air Fryers in the Home &
Kitchen categories are top 10
popular items.

4. Stock-Out Days among Top 10
• PRD153 (Air fryers) &
PRD 107 (Geysers) had
the most stock-out days,
but not significant.
Product ID Stock-out Days
PRD109 0
PRD155 0
PRD108 0
PRD154 0
PRD152 0
PRD106 0
PRD156 0
PRD153 2
PRD107 1
PRD147 0

5. Internal Changes: AVO from Dec to Jan
• Women fashion
overall had the
best AVO.
• Mobiles & Tablets
overall had the
lowest AVO.

6. Return Reasons • Top 5 reasons:
• No longer needed
• Inaccurate website
description
• Performance or
quality not adequate
• Missing parts or
accessories
• Better price available
• “Better price
available” is not
disproportionately
increasing.
10.34%
11.60%
12.16%
14.01%
14.44%
14.84%
15.16%
15.58%
15.97%
16.10%
16.14%
16.80%
16.93%
16.95%
Received extra item I didn’t buy(no refund needed)
Product damaged but shipping box OK
Item arrived too late
Bought by mistake
Incompatible or not useful
Item defective or doesn’t work
Wrong item was sent
Didn’t approve purchase
Both product and shipping box damaged
Better price available
Missing parts or accessories
Performance or quality not adequate
Inaccurate website description
No longer needed
Return Reasons % Increases from Dec to Jan

7. Product Mix and Returns
• The product mix had
not changed from
Dec to Jan.
• However, Jeans had
a disproportionate
surge in returns.

8. Conclusion & Recommendation
• Jeans has been the No.1 sales overall, but had the highest
return rate & longest stock-out rate.
• Root causes to be solved:
• “No longer needed” could be contributed to seasonality
• Promote alternatives to reduce the number of returned products, such as
gift cards or rental service during festivals?
• “Inaccurate website description” & “Performance or quality not
adequate”
• Review website descriptions & correct them by providing facts without
exaggeration, so clients would not feel cheated or disappointed.