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Returns & More Returns

The holiday sales season is in full swing, and that means extra demands on your product fulfillment services arm.

As eCommerce sales continue to break records, it would seem that it’s all coming up roses, but there’s a flip side to sales of this magnitude: sometimes-significant amounts of merchandise returns. According to the National Retail Federation, about 10 percent of last year’s holiday retail purchases were returned, amounting to over $63 billion worth of merchandise!

Handling Returns and Staying in the Black

Although the holiday shopping season is the most exciting for shoppers and retailers alike, it’s the January that follows that is the most stressful for reverse logistics. Not only do eCommerce outlets have to brace themselves for the sheer volume of returns coming in all at once, they need to figure out a way to cut their losses.

Your reverse logistics team should be prepared to sort your returns into a variety of bins:

  • Resellable As Is. Holiday gifting can make it easier to resell certain items, since recipients often know right away if their gift won’t work for them. Items that haven’t been worn, have all the packing intact and are still in season can be put right back into inventory and sold as a new product, only costing you the shipping.
  • Resellable With Modifications. Sometimes merchandise comes in soiled, broken or otherwise dysfunctional. In these cases, your reverse logistics team will need to be savvy enough to determine if these items can be fixed, cleaned or repackaged (or all three!) in a reasonable enough time frame to return them to the sales floor.If they’re simply out of season or discontinued products, the goal is to figure out if they can still be sold at a discount. You’ll still get something back and may even break even on the returned items in this case.
  • Truly unsellable or broken items can sometimes be sold elsewhere for scrap, it should always be an option in your reverse logistics chain. Although scrapping things like computer systems can be time-consuming, the materials do have some value and you’ll be keeping some amount of waste from the landfill. You may not break even on these items, but you’ll recoup some amount of your cost, depending on what you have for the scrappers.
  • Items that are returned and are deemed garbage are the least desirable from a retailer’s perspective. Even though it’s inevitable, a good reverse logistics team can help minimize the percentage of returns that go this bad.

As holiday sales start to slow, it’s time to think about holiday returns. The faster your company can respond to that incoming merchandise, the more you can return to your shelves, reducing your overall loss to the inevitable flood of unwanted, ill-fitting and wrong-color gifts.

March 02, 2017
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