Return to Retailer

Many more multichannel merchants accept in-store returns than offer in-store pickup, in large part because handling returns is simpler than implementing cross-channel pickup systems. But one dilemma for retailers that accept returns of direct merchandise is what to do with the products.

Furniture merchant The Bombay Co. will usually place returned items on the store selling floor. But if an item is out of date or damaged, says Matt Corey, vice president of e-commerce for the Fort Worth, TX-based company, the store may try to sell it as a clearance item “or even trash it. The store managers have to make the call on each returned item.”

Outdoor apparel manufacturer/marketer Recreational Equipment Inc. (REI) has a similar philosophy. If the returned product is from the current season and in good shape, “we can just put it on a hanger and try to sell it at full price in the store,” says Joan Broughton, the Kent, WA-based company’s vice president of multichannel programs. Older items or products from REI’s outlet Website are put on the store floor at a discounted price.

Perhaps a bigger problem than what to do with returned merchandise is how to deal with resentment on the part of the store managers. “When a retailer gets a catalog or online return,” explains Sid Doolittle, cofounder of Chicago-based retail consultancy McMillan Doolittle, “all of a sudden the retailer has a cost it hadn’t planned on and received no revenue from.”