Operations and Management: Back on the Shelves

When a customer returns a product, the best-case scenario is getting the item back into stock and selling it to someone else. But you can’t restock a returned item that is torn, stained, broken, or otherwise damaged. If you have a refurbishment program, however, you can restore distressed product and get more of your returned items back on your shelves and ultimately into customers’ homes.

The multistep refurbishment process at Warren, PA-based general merchandise cataloger Blair Corp., whose apparel titles include Crossing Pointe, 220 Hickory, and Scandia Woods, allows the company to turn around returns quickly and get distressed product into saleable condition, says Randy Scalise, vice president of merchandise handling. Refurbishing returned product be it sewing a pair of pants or removing makeup from a blouse means that Blair doesn’t have to order new merchandise, a key advantage in peak periods.

When Blair receives an apparel return, one of its 40 workers responsible for handling returns opens the parcel and adjusts the customer’s account. The employee then performs a cursory inspection of the garment, looking for damage such as rips, tears, or spots.

The returned item is then sorted into one of several totes labeled by category, such as menswear or blouses, “so we don’t have a tote going to 30 SKU locations in the warehouse,” Scalise says. Each tote is affixed with a barcode, which allows the cataloger’s computer system to keep track of returned merchandise.

Next, the tote is unloaded at an inspection station where CRT screens enable employees to check the merchandise characteristics, such as the number of buttons on a blouse. Employees again inspect the product to check for damages and, when possible, fix them, Scalise says. Once repaired, a garment is cleaned, pressed, and polybagged at the station before being restocked back into the warehouse.

Along the same lines, Groveport, OH-based Distribution Fulfillment Services, a subsidiary of Spiegel, has several spot-removal stations and a steam tunnel to refurbish returned apparel, says vice president Brad Grimsley.

Of course, apparel isn’t the only returned merchandise in need of repairs. Rye, NY-based Lillian Vernon Corp., which sells gifts and housewares, also has a refurbishment program. Workers at the cataloger’s Virginia Beach, VA, national distribution center inspect each returned item and repair the goods if possible.

If a customer returns a set of three kitchen canisters because one canister arrived broken, the remaining two in the set are shipped to one of Lillian Vernon’s 15 outlet stores or sold to a liquidator, says spokesperson David Hochberg. And while personalized returned goods cannot be resold, they are often used for replacement parts for other returned items. All told, about 45% of the cataloger’s returns are refurbished and put back in stock.

Missed opportunity

Framingham, MA-based operations consultant Wayne Teres says catalogers that don’t inspect and repair returns are at a disadvantage. And such catalogers may be in the majority.

In most catalog operations, Teres says, “quality-control inspection is not at the level it should be. I’ve gone into distribution centers where there wasn’t an established returns process in place.” Instead, returned product was discarded to some remote place in the distribution center.

A good refurbishment program involving a seamstress, a dry-cleaner or another repair expert enables you to salvage a number of damaged returned items that you would ordinarily dispose of, Teres says. But if you can’t repair them, you certainly don’t want the damaged returns sent back to the picking stock for shipment. “The last thing you want to have is your customer finding out that you sent them a garment previously worn by someone else,” Teres says.

Of course, it’s not possible or feasible to try to fix every damaged return. At Blair, for instance, products with major defects that were clearly not caused by the customer are returned to the vendor, or Blair may take a fee from the vendor to destroy the distressed goods, Scalise says. Some returned items have relatively minor problems, such as an irregular fit or barely visible stains, yet they can’t be sold at full price, so Blair sends these products to its outlet stores.

If you don’t have an outlet store, you could also sell such items on a “scratch and dent” page on your Website, says Marietta, GA-based catalog industry consultant Debra Wilson Ellis. “You’ve bought the product and in some cases, you now have no market to sell it,” she says. “So why not discount the product and put it on a Website?”

A Few Small Repairs

Sometimes merchandise needs a nip and tuck literally before it can be sold. For instance, this past fall Warren, PA-based Blair Corp. overprojected the demand for long-sleeve shirts. So rather than have the inventory take up space in its warehouse, the multititle mailer tapped Duncansville, PA-based Quality Casuals to convert the long sleeves to short sleeves.

“Blair had already paid for the merchandise,” says Mark Shaw, vice president of operations for Quality Casuals, which specializes in apparel refurbishment. “So why not try to move it?”

In another case, New York-based cataloger Brylane discovered that a shipment of about 1,000 imported dresses were two inches too long, so Quality Casuals came in to measure the dresses, cut off the excess material, and rehem the garments to Brylane’s specifications.

You don’t always have to call upon an outside refurbisher to modify merchandise. For instance, you can set up a “spare parts” shop in your warehouse so that you can replace outmoded or subpar buttons and buckles on last season’s apparel to make it fashionable and saleable this season. You should also train someone in your warehouse to treat minor stains and spots.

Did you miss a previous Operations & Management article?

You can find it along with other stories from past issues on the Catalog Age Website at www.CatalogAgemag.com