Retail Returns and Customer Confidence

return policy.jpgAs we begin the new year, and the holiday are behind us.  In the reverse logistics world, things are just heating up.  I was in the returns line the other day at Costco, returning an item I did not give as a gift.  In line a man was talking to his wife about how much returns there are after the holidays.  He stated, "I wanted how much there is in returns after the holidays".  Funny, I do not think he was expecting an answer when I turned around and told him over $260 billion.  His eyes grew as large as lemons.  I had just read an article "Holiday returns push retailers to optimize reverse logistics processes" by The Strategic Sourceror.  This article not only stated this number, but also went on to talk about some of the issues that will become problematic this year.

Dr. Dale Rogers was quoted in the article stating, "Nearly 70 percent of retailers lack a cohesive plan for handling the returns and reverse logistics of omnichannel purchasing."  This is troubling when you consider the number of returns.  The sheer number alone will overwhelm a retailer's bottom line, inflate a companies balance sheet, and even inflate the GDP.  With this amount of returns, and many of these coming back from online channels, fraud will take its place in this process as well.  And this will eventually trickle down in some way to the end consumer.  How often have you purchased something you think is new, only to end up at home with an already opened package, and sometime a package that has a used item in it.  This is a real problem, as retailers tend to put unopened looking items back on the shelf or online for resale as new stock items.

There is a unique trust factor and reputation that is at risk here.  I tend not to shop at stored who give me new product and it is not.  I will not shop at stores who sell me new product and it is not, and will blame me for the return.  Having a thoroughly thought out plan as a retailer, and creating processes to help avoid this risk to them self and frustration to the end customer is key.  Using Third Party Service Providers (3PSP's), experts at handling these sort of returns an situation dispels the risk and ads confidence to the retailers new stock sales moving forward.

All of this is about the end user, customer, and protecting your brand.


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