Organizing Returns Processes With Reverse Logistics

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 current state of the American economy has led to a rise in returns for many businesses. It's an unfortunate side effect for business owners, who are now being forced to rethink how the address their returns process. When customers are short on money, each product they purchase must be expected to work perfectly and within warranty: and when they don't, replacements should be ready.

If a customer doesn't receive a product, the business that shipped it just lost money on shipping and handling. That's why the process of obtaining the address and organizing the business back end is important. Customers should always verify their address before placing an order, and the database of information should be well laid out, and able to flawlessly print out address labels onto packages. Outsourcing is a good option here for most businesses.

Some products are better off being fixed than replaced- such as what Microsoft does with its gaming consoles. With the gaming console fiasco Microsoft went through, it was apparent that fixing consoles for the price of shipping and low labor costs was much more effective than missing out on lost profits and enduring new restocking costs.

Where repairs are concerned, there are different systems to choose from when deciding how to get the product back to the buyer. A large operation of returns would best be suited by a system that immediately sends back a refurbished product to the buyer, and then the team repairs the one sent in once they get the opportunity to do so. Cycling through products like this will help bring down the customer dissatisfaction that comes from requiring a repair job on the product.

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 miscommunication in 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.

Closing Comments

Third party logistics companies have operations, software, and the man power ready to take on any reverse logistics operation. Medium and large businesses are better off outsourcing their operations, rather than attempt to do an in house logistics operation and cause a clear cut disaster instead.

by: Alan Edsboro

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