Supply Chain Resolution 2020: Fix Returns

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By Gary Forger ·

January 17, 2020

It seemed like such a good idea at the time. Why not pick up something not on your must-read list. And besides, the five-volume set of “Game of Thrones” was on sale. Buy it.

And then reality set in. The five books are roughly 3,500 pages. Are those tomes really going to get read? This year or next? Probably not. Back they went to the store with a couple days left on the return period.

There were no hassles at the counter. The person there just took back the set and instantly refunded your card. That’s exactly how returns should work—from the consumer’s perspective.

It was even easy to manage your return from the retailer’s perspective. It just went back onto the shelf and was added to the store’s inventory. All relatively straightforward.

So, why all the eye rolls by supply chain professionals when it comes to returns?

To begin, that scenario accounts for only a small percentage of returns in today’s retail environment. It is the low-hanging fruit.

Furthermore, the return occurred within the specified returns window, and did not require special handling or processing. It didn’t even have to go back to a distribution center and be re-integrated with existing stock. The return didn’t really cost the retailer much, if anything, to make it available once again to another consumer. Even the internal accounting was simple, as was the immediate credit to the consumer’s card.

But for the vast majority of returns, their complexity is so overwhelming that they get pushed off to an obscure corner of the distribution center. “For many organizations, the returns management process has remained a cost center with low visibility that contains products to be restocked, repaired, recycled, repackaged or disposed of properly,” says Adam Robinson, director of marketing at third-party logistics provider Cerasis. Trouble is, returns are not going away. Sure, there are times when Amazon and others tell you to keep your purchase and credit your card anyway. But that’s just a stopgap. It is not a trend.

 

By Gary Forger ·

January 17, 2020

It seemed like such a good idea at the time. Why not pick up something not on your must-read list. And besides, the five-volume set of “Game of Thrones” was on sale. Buy it.

And then reality set in. The five books are roughly 3,500 pages. Are those tomes really going to get read? This year or next? Probably not. Back they went to the store with a couple days left on the return period.

There were no hassles at the counter. The person there just took back the set and instantly refunded your card. That’s exactly how returns should work—from the consumer’s perspective.

It was even easy to manage your return from the retailer’s perspective. It just went back onto the shelf and was added to the store’s inventory. All relatively straightforward.

So, why all the eye rolls by supply chain professionals when it comes to returns?

To begin, that scenario accounts for only a small percentage of returns in today’s retail environment. It is the low-hanging fruit.

Furthermore, the return occurred within the specified returns window, and did not require special handling or processing. It didn’t even have to go back to a distribution center and be re-integrated with existing stock. The return didn’t really cost the retailer much, if anything, to make it available once again to another consumer. Even the internal accounting was simple, as was the immediate credit to the consumer’s card.

But for the vast majority of returns, their complexity is so overwhelming that they get pushed off to an obscure corner of the distribution center. “For many organizations, the returns management process has remained a cost center with low visibility that contains products to be restocked, repaired, recycled, repackaged or disposed of properly,” says Adam Robinson, director of marketing at third-party logistics provider Cerasis. Trouble is, returns are not going away. Sure, there are times when Amazon and others tell you to keep your purchase and credit your card anyway. But that’s just a stopgap. It is not a trend.

 

 

 



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2020-01-17 06:51:00

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