How Returns Spark Consumer Relationships

The holidays are over, sigh, and it’s that time of year where returns are more prevalent than ever.  Did you know the value of products that U.S. consumers return to the nation’s retailers each year exceeds 100 billion U.S. dollars? Here’s a fun fact: if one billion one dollar bills were laid end-to-end it would extend around the earth almost 4 times! However you choose to grasp this astronomical number, product returns are inevitable for sellers and makers alike. This is why understanding how to appropriately manage returns, or shall we say manage reverse logistics, is extremely important.

If done right, returns spark consumer relationships and enhance contact with suppliers. For example, Zappos implemented a liberal return policy that makes it easier for customers to return merchandise. This helped create braver, loyal customers that feel more comfortable making less familiar purchase decisions.

Additionally, proper reverse logistics can significantly reduce costs.  The cosmetics manufacturer, Estee Lauder, found out how to re-add returned products back into the distribution pipeline before the end of the selling season. This resourcefulness reduced production and helped save the planet by eliminating waste. Some companies have even seen great success by providing prepaid shipping labels, redistributing product and reusing scraps from faulty or old products. If done properly, a nice little profit can even be achieved.

Are you wondering how your business can benefit and what needs to be in place to do so? Well, there are a few matters you should begin to understand.

1. Find Your Audience

Returned goods should be equally as important as goods for sale. Do not discredit them. The main difference is, returns require a different approach. First off, keep your audience in mind. Are you marketing your returned products to the right audience? In order to stimulate the return process, interact with resellers, scrap merchants and charities. Sometimes the market you need to cater to is not always the most obvious choice. On the other hand, maybe the company that would benefit most is your own? For example, a manufacturer of engines and pumps realized that even their defective goods were still better quality than those on the market. Hence, why they decided to resell them for a fair penny themselves instead of parting them out.

2. Optimize Routes

Returned goods need to have an optimized process. Meaning, return facilities should be located where it logistically makes most sense. Unlike large quantities of the same good, returns typically deal with smaller quantities of many different goods. This could potentially be seen as a problem, but instead view it as an opportunity. The system you instill is unique to your business and could even be taken as a competitive advantage.

3. Returns Require Their Own Turf

If you are striving to take back control of your returns, returns need to become a priority. Create a team or department dedicated strictly to returns. Consider the layout and processes, as these need to be efficiently streamlined. Also give the department its own leader, preferably someone with an operations or business management background. That last note is especially important if you want to generate profitable returns.

4. Returns Overall

Naturally, returns should be prevented. Better forecasting or striking special arrangements with retailers can help save your company from headaches. Proctor & Gamble is a great example of this with their zero-returns policy. However, perfecting your return handling is much better than ignoring them and suffering the consequences.

As you have read above, great returns spark consumer relationships. Loyalty can be earned and profits can be created. The more efficient your company becomes at processing returns, the happier your customers will be, substantially increasing the likelihood of repeat business.  Readjust the way you see returns. Within each return, lies opportunity. Finally, the most important question to ask yourself is not, “what can you do with your returns?”, but “what can your returns do for you?”.

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