“The returns management is a sub-discipline of supply chain management. It refers to the cross-institutional planning, implementation and controlling of returns flows as well as the associated information and financial flows with the goal of supporting the profit maximization of the value-creation system.
In order to attain this formal goal, the returns management must fulfil four tasks and bring them into harmony with each other: (1) the returns processing, (2) the returns prevention, (3) the returns avoidance as well as (4) the returns promotion.”
The goal is to support the profit maximization of the value-creation system.
A customer-oriented handling of returns increases the customer satisfaction and the customer value.
The cross-divisional function of returns management has positive ramifications on Product Development, Purchasing and additional divisions.
Returns and the related management trigger expenditures as well as costs and generally reduce the margin.
Inefficient processes in returns management increase the costs and expenditures and have a negative effect on employee and customer satisfaction.
Returns and complaint management are very closely related, but not synonymous. The complaints management differentiates itself in one critical point:
“With a complaint, buyers object to the quality of an acquired tangible or intangible product. Thus, they intend firstly to receive compensation for the service restriction that they have experienced – which may range from repairs to a price discount to damage compensation. Secondly, the customers wish to receive a change in the condition and/or behavior which has been criticized.”
Returns Management in the Mail Order Business, Asdecker, 2014, p. 27
Customers are encouraged to express their dissatisfaction.
The information received, directly or indirectly, in complaints can be collected and analyzed in order to determine the cause for and eliminate the defects.
The goal is the restoration of customer satisfaction.
The complaint management makes a contribution towards the continuous improvement process at the company.
Increases customer value.
A clear internal delimitation of the goals and strategies between returns and complaints is required. This is valid particularly for apparent conflicting goals – above all if returns prevention or returns avoidance is being implemented.
In contrast to complaints, a grievance requires no prior purchase. Accordingly, as a rule, the customer can assert no legally-binding claims in this context.
In the case of complaints, this once again constitutes a subset of grievances.
Grievances provide valuable feedback from customers or potential buyers: One is not satisfied with the quality, but presumably nonetheless with the product itself. Otherwise, the feedback would presumably not be provided.
Cross-divisional quality management is needed here: Product quality, communication quality, product presentation quality as well as customer service quality.
The grievance management as the central contact point makes an important contribution whenever products are supposed to be “tested” on the market.
Grievances should always be kept to a minimum in order to not damage one’s image.
During test phases, a fast response and elimination of the problems are required.
The selection and the management of carriers constitute an essential influencing factor in the returns area. Deliveries of goods and delivery options, take-backs, rate-shopping and costs, service level and controlling are central aspects in this regard.
Punctual and fast delivery increases the customer satisfaction.
Flexible take-back options such as pick-up, hand-over in the shop, etc. are perceived as customer-oriented service.
A functioning logistical package provides constant transparency to the customer and the shipper during the shipment and take-back.
The logistics of the “last mile” offer vast ecological potential insofar as suitable carriers are deployed.
Central efficient carrier management simplifies the returns management upon the international level.
Tardy deliveries contribute towards increasing the returns rate.
Transaction problems during the return shipment, e.g. during the packaging, lengthen the process and may possibly increase the internal costs.
Bottlenecks in the IT (insolated solutions, unsatisfactory digital services for the logistics management, insufficient integration of applications) make it more difficult to control the carriers.
Transport Management Systems (TMS) are required which, through the handling of detailed package shipments, create high efficiency and also provide support for multi-carrier scenarios.