A day—or month—in the life of a product return
Let’s look at the typical journey of a returned e-commerce product that’s being shipped back to the warehouse. If the consumer is an influencer posting their fashion haul on TikTok or a serial returner, the merchandise might be held until the last possible day designated on the retailer’s online return policy. Then the consumer slaps a label on the package and puts it on their front porch for pickup, or drops it off with a carrier.
Meanwhile, up to 30 days have passed. No one at the warehouse knows the product is being returned. If it’s a trendy item, it might be out-of-stock online now, and potential buyers have been turned away. The inventory aging process is already well under way for this item.
When the product finally shows up at the warehouse, a small, dedicated team is probably tasked with handling returns. Team members are typically overwhelmed and overworked, because no one knows how many returns will be arriving on a given day. If it’s a busy week, packages may sit for days before they’re even opened. Meanwhile, consumers are waiting for their refunds, decreasing their satisfaction
With no standardized process to guide them, team members open packages, then assess the condition of merchandise using their own judgment. It’s contingent on them to recognize clothing that’s been worn, broken or damaged products, missing tags, incorrect items in the package, or other cases of returns fraud. They may have to match thousands of SKUs with different return rules and policies—which is not only time-consuming, but also nearly impossible to accomplish with 100% accuracy.
Next, products that are deemed sellable land in a big pile of similar returned merchandise. It might take additional days for these products to be sorted, repackaged, reshelved in the warehouse, marked as available on the website and ready for resale.
That big pile is taking up valuable physical space in the warehouse, and the products in it are getting even older. It might take a total of 40-50 days from the time of the original delivery to get returned products back into inventory. With every passing day, the chance of a full-price resale—or any resale at all—plummets.
How can retail warehouses do better?
This all-too-common scenario begs the question: How can retailers optimize their warehouse returns processes to maximize resale opportunities and margins, while also minimizing landfill waste?
The answer lies in digitalization. Returns management software can help retailers enable consistent, standardized processes across the end-to-end returns journey that increases speed, visibility and the potential for a full-price resale.
Imagine if the returns journey looked different, supported by a rules-enabled digital process—complete with intelligent tools, policies and checklists.
With return labels in the original package eliminated, retailers not only reduce costs and paper waste, but they also increase their own awareness and control. When the consumer goes online to start the returns process, the retailer knows the merchandise is coming back, as well as its condition. And, when the consumer scans the item at a kiosk, the retailer knows exactly when the product will arrive at the warehouse.
Now the warehouse can schedule the appropriate number of employees in advance, based on actual returns volumes. Popular merchandise can be relisted online immediately, with a get-by date that allows for receipt, processing, and re-delivery. The returns journey is accelerated and informed via modern software.
At the warehouse, returns processing is also faster, guided by a standardized process and agreed-upon checklists. Employee burnout is replaced with energy and efficiency. Team members opening packages know exactly what should be in every package and can quickly confirm it, based on rules and not best guesses. Products that are in demand, and perhaps already promised to another consumer, are prioritized. Refunds can be issued immediately and automatically.
With plenty of staff resources in place, merchandise is turned around quickly and back in available inventory. It’s fresh, in good condition and still relevant to consumers. Waste and costs are significantly reduced, while revenues and customer satisfaction are maximized.
