PRLog - Feb. 20, 2012 - CINCINNATI -- Here’s a sobering thought: Companies spend an estimated $100 billion dollars per year on processing returned merchandise. Why is it so expensive and how can companies control these costs?
Product returns are problematic since it takes considerably more effort to process returns than to get an initial order out the door. Processing returns involves assessing the item, refurbishing, repackaging, relabeling, restocking, reselling or disposition, account reconciliation – all adding up to a lot of time and labor. And if the process is too complicated for consumers, they will probably take their business elsewhere.
“With careful planning, distributors can more effectively manage their returns process. You may not be able to eliminate returns, but you can minimize your costs while making it convenient and quick for the customer. The goal is to process returns within 72 hours of receiving the item and credit the customer’s account within 7 days of receipt,” states Rich Hite, President of QC Software, a leading provider of warehouse control software.
Guidelines for improving reverse logistics in the distribution center:
Analyze your current returns process. Understand what, how much and why product has been returned, as well as length of time it takes to complete the process. Do you have adequate resources? Once you understand the current process, Identify and implement improvements.
Reduce inventory levels. Be sure to fill new orders with resalable returns. The quicker you process returns, the quicker you can get them out the door.
Minimize the number of touches. Advanced software applications are essential for streamlining the returns operation.
Employ properly trained employees to manage returns and complaints. Personnel trained in handling returns will better manage the process and improve customer service.
Reduce the volume of damaged goods. Distributors should improve packing procedures to minimize damage during transit. They can also work with manufacturers to improve packaging design.
Provide pre-printed return labels with outbound orders. Return labels with bar codes provide the necessary product and order information needed for efficient returns processing.
Post forms and procedures on the website. Simplify the customer’s forms and procedures and make sure they are easily accessible on your company’s website. In addition, make sure return policies and procedures for employees are accessible.
Provide cross-channel return options. Allowing the customer to buy an item online and later return it directly to the store can be more convenient for the customer and eliminate shipping costs. However, keep in mind the retailer will use additional resources to process returns.
Cross-dock returns when feasible to minimize storage and improve on-time delivery of outbound orders.
Consider outsourcing some or all of the returns process. You can often save money by employing companies that specialize in reverse logistics.
QC Software is recognized as an industry leader in providing innovative and adaptive software solutions for order fulfillment and distribution centers. Their RFID–enabled warehouse control system provides advanced management capabilities for inventory control, resource scheduling and order management. For over 16 years, these solutions have enabled customers in North America and Europe to streamline their warehouse operations with the lowest total cost of ownership in the industry.
For more information, contact Jerry List
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QC Software’s warehouse control system, the QC Enterprise, is a leading Tier 1 suite of applications that is backed by over 16 years of research, development and rigorous testing. The QC Enterprise is modular in nature, easily configurable, platform independent and scalable to suit a wide range of user requirements. QC Software’s innovative solutions are leading the way in profitability, efficiency, and customer satisfaction.