Returns processing, also known as reverse logistics, is a subsection of third party logistics that deals with minimizing costs of returns. With as much as 30% of some buyers returning goods, it’s important to have a reverse logistics operation in place for any retail or manufacturing operation.
The amount of people returning items is higher than ever. With money tight with most United States citizens, and the Internet providing a common barrier between buyer and seller, there have been high returns all across the board. This means that there must be a system in place to handle excess returns, but also a system to solve the problem of why returns are occurring.
Many returns aren’t because the customer didn’t like the product- it might be because they didn’t receive it! Getting an address wrong or failing to verify address data is a leader in causes of wrongly addressed packages. On the front end of things, it’s nice to verify address information before accepting any new orders. For the back end, it’s best to have a system that is well organized and can handle mass addressing operations.
Repairing defective products is less expensive than replacing a product on average. An example would be with a mobile phone that costs several hundred dollars. Troubleshooting and replacing the defective part would cost much less than having to replace the entire device. That’s why a business needs to setup a repair department as soon as possible.
The refurbished market is a common one. A tactic used in this market is to cycle through refurbished products as needed. If the business selling the product receives a request to repair a certain item, they might instead put the item they receive in a warehouse to get ready for troubleshooting. They would then send an already repaired device back to the consumer to save on repair time. This doesn’t work for personalized devices, but does for most retail electronics.
Remember that you are competing with other businesses that could potentially take business away as a result of dissatisfaction. One way to reduce confusion or communication errors within customers is to spend extra time making a manual and operating booklet that goes with the product. A mobile phone should have a detailed list of every feature and button. If it doesn’t, the buyer will probably return it and trade it in for a different model that is easier to learn.
In Conclusion
The logistics of returns processing isn’t simple to master. Outsourcing to a third party logistics service is necessary for when you outgrow your basic business model. Third party logistics services seek to save money, not waste it, so they are a great business investment. Consult several for a quote or consultation.
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