Reverse logistics improve the returns process, but there's still a long way to go

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Dive Brief:

  • For the 2016 holiday season, UPS predicted a return rate of more than 5.8 million packages, though actual numbers won’t be released by the company until its fourth quarter earnings announcement at the end of the month, DC Velocity reported Tuesday.
  • Returns have become far more convenient for customers since 2012, with a 16% reduction in return shipping costs, a 16% decrease in restocking fees, and a 14% decrease in return credit delays.
  • However, that convenience requires specific steps by retailers, including directions for easily printed return labels or the inclusion of a return label in the box. Reusable packaging helps keep costs down.

Dive Insight:

The variety of methods available to manage holiday returns continues to expand, resulting in deals for consumers who are willing to hunt for them.

Reverse logistics start-ups like Optoro, which recently paired with UPS, resells retail returns on its websites and, determining where the retailer is likely to see the most profit. Another, similar option is with Liquidity Services, which accepts goods from almost any retailer, then resells the items from its warehouses around the country. Liquidity touts its 100% turnover rate every 30 days as an indication of its success. One Liquidity warehouse in Indiana is approximately 190,000 square feet and employs 100 workers, all of whom process more than a dozen truckloads of merchandise each day.

Returns don’t just sit in the back anymore, but instead the reallocation of those returns is building previously untapped revenue streams. Through reverse logistics, retailers have learned how to reap profits from unwanted items while still allowing them to please their customers by easing the returns process. 

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Filed Under: Logistics

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