New Industry Group Seeks to Tackle Growing Issue of Product Returns

To combat the growing problem of retail and ecommerce returns, which continue to eat away at profit margins, the Retail Value Chain Federation and returns prevention software provider Newmine have joined forces to create the Product Returns Council and work on solutions.

“All I listened to in the last 30 years is CFOs and retail companies saying, product returns are a cost of doing business,” said Kim Zablocky, founder of RVCF. “Well guess what, no one can afford the kind of cost returns are creating without trying to stem the erosion of profit. It’s a worthwhile endeavor, helping to spread the word. This should be an industry-wide initiative.”

According to research from Appriss Retail, product returns represented $369 billion in lost sales in 2018, while Statista estimates return deliveries will cost $550 billion in 2020, a 75.2% increase from 2016. eMarketer estimates return rates for store-bought products average between 8% and 10%, doubling to 20% for ecommerce orders.

Zablocky said membership in PRC is open to members of RVCF, which includes 50 top retailers as well as 300+ brands and manufacturers as well as vendors and suppliers.

The PRC will focus on three primary areas in 2020: Returns prevention and reduction, returns handling and returns resolution. It will also work on reviewing return policies, reason codes and EDI transactions associated with returns; review returns prevention processes and technology; and how returns are managed and handled, including processing costs.

Felton Lewis, principal of worldwide alliances and business development for Newmine, said the idea for PRC grew out of a workshop at a RVCF conference, where a consultant asked the 35 participants to apply design thinking to solve the returns problem.

“That led us down the path of, can we apply design thinking to this issue?” Lewis said. “People who took part in the workshop were very interested in the idea of a product returns council, having a focus group to share what they’re learning as well as best practices.”

Newmine and the RVCF will take part in a returns workshop at Ecommerce Operations Summit 2020, to be held April 14-16 in Orlando, FL. Participants include representatives from FedEx and Fruit of the Loom, with others to be added shortly. More than 100 speakers will be taking part in 40+ sessions at ninth annual show, covering fulfillment operations, shipping and delivery, omnichannel, the customer experience, robotics, e-grocery and the last mile. You can register here.