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ASCM Insights

Better Returns Management

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With a total of $428 billion worth of merchandise returned in 2020, it’s easy for a company to get buried under cumbersome or inefficient returns processes. Plus, if items are not disposed of in an environmentally friendly manner, the sustainability impacts can be massive. Returning an item to its original shelf is an inherently costly and complex process. More often than not, the cumulative steps required often outweigh the value of the actual item. As a measure of controlling expenditures, companies regularly find it better to tell consumers to keep the incorrect or undesired product, then ship the corrected item; or to simply discard returned items instead of taking the time to reshelve them. But there’s a better way to achieve sustainability in reverse logistics.

Improving returns management

In any system, network or organization there is almost always room for improvement. Using a returns management system (RMS) reinforces policies, claims rules, vendor entitlements and approval hierarchies. By pairing an RMS with other supply chain software, organizations can efficiently manage returns from beginning to end.

An RMS is focused specifically on product returns and enables company decision-makers to think beyond picking, packing and shipping products. This system also adds value to the customer experience by providing a service that other companies cannot effectively manage themselves. By offering returns processing, you can help your customers improve profit margins, conversion rates and their own customer satisfaction. By leveraging a single end-to-end, centralized system that commences the moment a return is initiated and continues full cycle until completion, companies can gain complete control over returns, boost revenue and gain a competitive advantage.

Key features of an RMS

An RMS’s disposition capabilities can handle everything from recycling to repackaging and scrapping to liquidating an item immediately upon receipt. Depending on a company’s cost parameters and sustainability needs, the system can get an item back to stock for resale, returned to the vendor, recycled or disposed of in a quick and decisive manner. With an improved return-to-stock process, a business can maximize recovery and boost net sales while supporting recycling and donation programs. Workflows can be configured in a way that best fits each company’s method of doing business, focusing on specific priorities and financial goals. When it comes to recycling, strict limits for disposals can be created through standardization processes implemented across teams and locations, guaranteeing returned items are handled consistently.

Some other key RMS features include the return on behalf of (ROBO) and the return-to-vendor (RTV) modules. ROBO capabilities allow for targeted locations to be used as an authorized return point. Instead of consumers having to ship items directly to the company, they have the option to send to a trusted partner at a predetermined, nearby and easy-to-access location. These authorized partners are in the same system and have access to the synced data necessary for completion and fulfillment.

The RTV feature streamlines the process when one single vendor is the original source for multiple products by allowing various items to be shipped all at the same time and arrive together at the same location. Businesses can set their own rules for specific consolidations in order to save on freight costs. The rules can be set by type, size or age. By shipping more efficiently, the result is fewer trucks on the road, fewer planes in the sky and less carbon emissions polluting our environment.

When integrated with other supply chain software, an RMS can provide detailed analytical reports across a spectrum of varying metrics including receiving, handling, repairing, replacing and shipping. In addition, an RMS offers insight into supplemental aspects in the returns process, including return rates, product quality, shopper preferences and targeted sustainability measures.

Built-in automation tools help guide employees on how best to handle returns based on business objectives and sustainability goals. In addition, an RMS can help companies streamline critical processes when it comes to warranties, repairs and claims. That extra step often leads to greater consumer satisfaction and an increase in return business, as well as the benefit of receiving positive online reviews.

No more “trash first" returns strategy

When a business processes consumer returns, it must grapple with an operation laden with a multitude of moving parts, shifting regulations and a legion of various geographic locations — all while keeping track of its bottom line. Implementing an effective RMS enables an organization to maximize sustainability and carry out a broad, holistic returns approach from a central location, ultimately supporting financial goals and protecting the environment. The result is a business that can be laser focused on customer convenience — in particular, ensuring returns are as effortless, straightforward and environmentally friendly as possible.

About the Author

Gaurav Saran CEO, ReverseLogix

Gaurav Saran is CEO of ReverseLogix, a provider of integrated returns management systems for retail, e-commerce, manufacturing and third-party logistics organizations. Prior to founding ReverseLogix, Saran led enterprise sales for Fortune 500 companies at Microsoft. He may be contacted through reverselogix.com.

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