The holiday shipping rush is winding down and it’s time to start prepping your operation to handle returns and exchanges. Dealing with returns is a costly necessity of doing business. The key is to make sure that the process is handled in a way that keeps customers coming back.
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Most retailers see an uptake in returns the week after Christmas through mid-February. While there may not be time to make major changes to your operation before the inbound starts to arrive, there is time to implement the following practices so that your distribution center greets returns and exchanges with increased efficiency and exceptional customer service.
Here are five tips for dealing with returns during the post-holiday season.
Prepare your team
Unhappy gift recipients will want to know how to return or exchange an item. Check your staffing levels to make sure you are ready to handle the influx of calls and emails that will be coming your way.
Returns coming back from stores require personnel to strip that product from returning trailers before they can be put back into service. Be prepared to add additional yard jockeys and personnel to the trailer “clean out” process. Failure to have the right staff may make the difference of having the right equipment to put at the door at the necessary time to load outbound shipments.
Unfortunately, people often think of returns as unwanted. Therefore, all too often, it becomes an area of temptation and theft. Situations where personnel find themselves caught up in this temptation is extremely heartbreaking but the problem can be overcome with a clear message and communication regarding the value of returned product to the profitability of the company.
Test your inbound procedures and software
Make sure you have a well-documented process for receiving returns. This will ensure that you can easily add labor to the returns area and produce efficient and accurate results.
Returns have the potential to back-up receiving docks. The end of December is a good time to have your quality assurance team complete a review of your processes. Review and communicate guidelines for actions to take on returned items. If the merchandise is sellable, does it go back to inventory stock in a prime location to eliminate additional touches? Will a slower moving item be returned to reserve storage?
A multichannel fulfillment center has to deal directly with the returns from consumers as well as the returns coming from the retail channel. The direct-to-customer channel requires additional processes and quality assurance measures in place in order to provide the track ability of the returned package and the traceability of the product within. Have your tracking software, scanning equipment, and procedures in place and well tested so that you can easily account for all D2C returns. Give priority to D2C versus the retail channel. Customers are easily lost over a “bad” return experience.
Improve your product inspection process
The “product inspection” is often the most labor consuming portion of the return process. And often this need for labor comes at a time when operating budgets are the tightest. Deal with the returns in cascading levels of inspection so that damages and “out of date” products are identified immediately saving some of the more detailed inspection to be handled in a downstream process.
Closely identify and evaluate the cost added to each type of product as they go through the returns process in comparison to the value of the product. Use these evaluations to inform and make decisions that may lean more towards bulk “buy out” or disposal opportunities.
Review vendor return guidelines
In addition to reviewing your own processes, it is important to make sure that supplier return guidelines are well established and documented. What is the cut-off date for returns? What does the quality of the merchandise need to be to qualify for a return?
When coming out of a large season, products no longer in your inventory are often returned. Since returning this merchandise to stock is not cost effective, preplan an agreed upon benchmark of the cost-to-value relationship when dealing with products that are not return to vendor or return for credit.
The space required to process and hold returns while awaiting Return Authorizations from vendors can tie a significant amount of valuable floor space and inventory locations. End of season RTV authorizations are often large quantities and sometimes take several weeks for approval. Work with your merchandising managers to get intermediate approvals at various major completion states.
Optimize use of equipment and space
Optimize facility layout by staging a quality inspection at the receiving dock to make restocking decisions and to return products back to inventory as quickly as possible.
Use outbound picking technologies for inbound logistics to get SKUs back to their location as quick as possible for resale. This can deliver a greater return on investment. For example, if sortation equipment is only used during the first and second shifts for normal outbound operations, the equipment can be used during the third shift (late-night shift) for returns. Utilize every free minute your equipment has.
Chris Arnold is vice president of operations and solutions development and Luther Webb is director of operations and solutions development at Intelligrated.