Return products are a fact of life for most organizations that ship goods to customers. Some organizations build the returns process into their business model
from the start. For example, Warby Parker and Zappos
encourage customers to order multiple products, knowing
that only one clothing item, eyewear product or pair of shoes
will likely be purchased, with the others being returned.
Too many companies, however, still see reverse logistics and
returns management as a problem. Failing to understand the
value propositions of effective returns management can cause
irreparable harm to a company’s long-term profitability and
Let’s consider three separate — but interrelated — “flows” that
must be managed for effective returns management.
Efficiency is key when managing product flow. Customer
returns often come back in dribs and drabs, poorly packaged,
and with limited information attached.
First, recognize that not everything returned by a customer
should be returned. Smart organizations institute a gatekeeping
process to determine what to accept back from customers.
A cosmetics firm I have worked with has analyzed the
Effective returns management requires
handling product, information and financial
ISM Mastery Model®
Core Competency: Logistics Management
BY DIANE MOLLENKOPF, PH.D.