MDF Systems, Inc.
780 James P. Casey Road
P.O. Box 917
Bristol, CT 06010-0917
Tel:800-426-3752
Tel:860-584-4750
Fax:860-584-4759
www.mdfsystems.com
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Industry News
There is a new opportunity for 3rd Party Fulfillment companies to offer a supplementary service to those companies that traditionally do not outsource their fulfillment. This new category is returns processing.
As consumer commerce (both e-tailers and brick-and-mortar companies) continue to grow, returned products have become a big issue (and a drain on profitability). Not all returns are headed for the scrap pile, and with some innovative management and repackaging, these items can be resurrected and put back into stock.
The whole returns process should be painless (and some say even cost-free) for the customer. This includes issuing call tags for UPS/FedEx pick-ups or sending out pre-paid shipping labels. And of course, a credit should be issued immediately.
Typically, when an item is returned, it needs to be opened and inspected, and the item is then processed according to its condition and the business rules in place. It can be returned to inventory, destroyed, recycled, or sent back to the manufacturer. The new thinking is that it can be put through a “reverse logistics process” to be repaired, refurbished, repackaged, relabeled and restocked using the same SKU. Alternately, it could be repriced as used/overstocked or renaming it as a different product. This is especially useful if an item was originally part of a set. Often customers return only a single item from that set, rendering the item difficult to resell.
If the Returns Processing is outsourced, then reports become critical. Data usually includes transaction-related information such as original source, shipped-to information, reason for return, value of the returned item, and credit refunded.
The benefits of having a 3rd Party handle returns include:
- A dedicated focus on the process
- Additional capabilities added to the process
- Use of additional manpower and technology
- Potential cost savings
An interesting side note – an emerging trend is asset recovery services such as Internet-based auctions to recycle the returned item and recoup some of its costs.
© Copyright 2004 MDF Systems
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