A 2017 report by the National Retail Federation revealed that every year, shoppers return some $260 billion worth of products they purchase in brick-and-mortar stores. That accounts for about 8 percent of their total purchase. For returns of items bought online, the estimate is nearly 30 percent.
For some companies, returned items would represent losses. This is why businesses need a system or a process that will effectively handle customer returns and get as much value as possible from returned items. Through this process of reverse logistics, businesses can turn the loss into profit.
A reverse logistics platform helps businesses manage, process, and sell returned items and excess inventory in an efficient and cost-effective manner. It also helps reduce the environmental impact and costs of having to dispose of inventory, even those items that can still be resold.
Logistics services make use of different methods of handling customer returns depending on the company. They can help you with your returns process, communicate with your customers, and manage your reverse logistics for you.
Reverse Logistics Program
There can be a lot of waste and depreciation with products on their journey from the retailers to resellers. To avoid simply disposing of these products in landfills, these should be made accessible to people who want to reuse them.
If companies are able to recover value from the goods returned to them, this can lead to a worthwhile revenue stream. They can do this by engaging the services of logistics companies that can help them plan, implement, and manage their reverse supply chains.
Businesses with good reverse logistics programs find ways to get value from returned items, such as through refurbishing, recycling, and reselling, and can dispose of those that can’t be resold. A reverse logistics program will help a retailer resell goods for around 40 percent of their retail value, as well as reduce landfill expenses while avoiding the environmental impact of throwing away inventory.
Benefits of the Program
A good reverse logistics program allows companies to leverage the data collected from the return process. Retailers may ask customers why they returned an item and the answer can be used to drive decision-making and improve business processes.
The returned merchandise can also be used by companies for their CSR initiatives. Businesses can donate serviceable items to civic organizations, nursing homes, churches, and other institutions or charities that can benefit from a product-giving program. In return, the company can receive tax benefits for their donations and also avoid storage costs.
Logistics professionals can also help companies offer customers end-of-life recycling methods for their merchandise. Recycling options create a positive impact among environmentally conscious consumers, making them more likely to keep doing business with you.