The returns processing encompasses all work steps which the returns recipient must execute after the buyer has expressed his wish to return goods and/or has sent back the goods. The processing is done in-house internally or externally.
Possible results are the repeated sale as new goods, the reprocessing in order to obtain fully-functional used goods, the recycling of individual components or raw materials, the donation or the disposal of the goods.
The partial steps include: Issuance of a returns authorization (returns label, online registration); returns delivery; integration into the process; opening, identification and integration into the system; verification, e.g. in order to prevent fraud; status assessment with a categorization into the four return types; purchase price reimbursement; restorage (A-returns), otherwise processing and/or repackaging (B-returns), sale as used goods (C-returns) or scrapping (D-returns).
Minimization of the costs through effective handling processes.
Positive experiences with the take-back increase the customer value, the customer loyalty, improve the brand reputation and ideally have sales-increasing effects.
Customer-oriented return conditions are perceived as being a sign of high product quality.
Because many return shipments have avoidable causes, they stimulate an organization’s continuous improvement process.
The usage of the data obtained regarding customer requirements enables the customer-centered continued development of products and processes.
The returns management enables the development of competences based upon which competitive advantages can be obtained.
Positive balance sheet effects resulting from advantages obtained during the inventory valuation.
Logistical, procedural and organizational costs are created.
High percentage of manual work steps and minimal automation potential.
Efficient processing requires a top-class logistical, organizational, technical and procedural environment.
Difficult to forecast the return volume, thus complicating the related planning of the handling processes and handling infrastructure.
The assessment of the returns status is labor-intensive because automation is possible only to a limited extent owing to the heterogeneity of the goods and the statuses.
The identification of the best utilization alternative is frequently difficult in practice.
Short product lifecycles and the minimal negotiating power of dealers prevent positive change processes.
The returns prevention is a preventative strategy in order to dissuade potential returners from their intention and to reduce the returns rate. In order to accomplish these goals, targeted incentives are created via compensation: The buyer receives financial compensation if he forgoes making a return. Alternatively, the return efforts are increased via time, financial or emotional hurdles: Not providing a return voucher with the shipment; restriction of the payment options (no purchase on account); tightening of the return policies; return fees; return upon a voucher basis; an upstream authorization procedure; consistent refusal to take back goods if returns are not justified; enlightenment regarding the ecological consequences.
The number of returns is reduced.
Costs can be saved if the return costs exceed the replacement costs.
Ecological contribution.
Without compensation, the customer relationship can suffer.
The hurdles that have been created can result in dissatisfaction and a loss of image.
The ecologically-oriented usage or processing of the retained goods by the buyer cannot be affected.
Preventative measures for returns avoidance are intended to reduce the returns rate. Measures for returns avoidance require data collection and the analysis of the reasons for the return in order to eliminate the cause. They include detailed descriptions of articles and products; optimized product presentation; top-class packaging; personal consulting; integration of justified, critical customer opinions; incoming goods controls in order to prevent the delivery of defective goods; a focus on quality in the Purchasing and Logistics Divisions; personalization of the ordering process; coordination of the marketing with the returns management; managing buyers in stationary businesses; providing realistic delivery timeframes, their fulfilment and the reduction of the shipping timeframe.
Reduced number of returns.
Improving customer satisfaction because each return for the customer is associated with significant time and/or financial expenditures.
The costs triggered by the returns decrease.
Through the reduced consumption of resources for the return transport and the processing, ecological effects are attained.
Measures trigger high personnel, organizational and technical expenditures.
High loss of value must be compensated for with short internal lead times.
In the case of a positive net return value, prevention is not expedient because the recipient avoids making a value contribution for each return that is not accepted.
The promotion of returns is a preventative strategy in order to increase the number of returns. From a business management perspective, this measure makes sense for a positive net return value. With the goal of sales promotion, for example, old devices are received in payment. For the resulting new sale, the resale of the refurbished device (upcycling) is made in secondary markets.
Additional examples for promotional measures: Very simple returns process; minimal return expenditures; very long right to return; offensive advertising for good will returns; pricing (high price = higher expectation = higher return rate). On third-party platforms such as Internet marketplaces, the return rate is increased through a lower degree of influence on presentation and framework conditions.
New sales markets and revenue sources are developed.
Through the implementation of the economic cycle concept, ecological effects are attained.
Potential for image-building, e.g. through the donation of the revenues obtained from the returns of old devices.
Customers must be sensitized to the options and advances of making returns.