Edition 49
Returning Thoughts - Tips from the Reverse Logistics Pros at Vegas 2013
by Paul Rupnow, Director, Reverse Logistics Systems, Andlor Logistics Systems, Inc.

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Even after all the years I have been doing reverse logistics, every time I attend a Reverse Logistics Association conference, I am constantly fascinated with the barrage of brilliant new ideas and approaches that companies are developing to improve their Reverse Logistics. Here are a few highlights from the recent conference in Las Vegas that may help you improve your returns operations.

Return Rules on the Purchase Receipt

Recently the paper receipts we receive at the checkout seem to be increasing in size. Derek Wishart, Manager, Reverse Flow Operations and his Reverse Logistics team at Canadian Tire, a large multi category retailer in Canada, are using that large receipt to provide better information to consumers. Right on the receipt, right next to the purchase price line, they add:

1. Return Policy Exceptions - for example: “Returns of new, unused item limited to 30 days” to clearly outline to the customer that this item does not meet the normal return rules.

2. Special Warranty: for example “2 year repair only warranty”, since not all products in the store have the same warranty rules.

3. After Sales information: for example “Questions? Call 1-800-manufacturer or visit www.manufacturer.com”. This helps direct the customer for assistance, rather than returning the item.

These nice clear instructions assist and remind the customer of alternatives or rules before returning an item to the store.

It’s About Recovery, Not About Cost

Office Max often relies the expertise of third party processors to take advantage of their core competency in Returns Processing. With respect to these external partnerships, Rob Saper, Vice President, Supply Chain Logistics at Office Max cautions us to choose wisely, manage actively. But more importantly he says to “Remember: It’s about recovery, not about cost”. “If somebody will process for $.10/unit less, but cannot properly execute a RTV [Return to Vendor for Credit] for a $500 item, you didn’t save $.10, You lost $499.90”

Allowance in Lieu of Returns

There has been a recent shift in return terms between suppliers and Walmart, with manufacturers moving more towards an Allowance in lieu of returns, rather than the Return to Vendor method used historically by most. Troy Kubat, Sr. Director Specialty & Reverse Logistics at Walmart, tells us that this shift has been accompanied by more restrictive return terms, such as setting of return caps, detailed return reasons and serial number capture. As a side note, it is interesting observe that this trend of shifting the responsibility to the Retailer to manage the returns is not shared by many of the members of the RLA Consumer Electronics committee, who have been experiencing much higher return recoveries and better control of their brand in the secondary markets by processing the returned goods themselves.

As our Reverse Logistics industry matures, it becomes more and more evident that one size does not fit all and that the return rules and processes we apply to some products are not effective on other products, especially when we start to measure the cash recovered by different disposition methods, even with very similar product lines from the same manufacturer. Hopefully these tips will help you improve your processing and recovery rates.
Good Luck!

Paul Rupnow - Director, Reverse Logistics Systems, Andlor Logistics Systems Inc.

Editor - Reverse Logistics Professional Report
Business Insights and Strategies for Managing Product Returns

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