Know the reason for returns

By Staff -- Modern Materials Handling, 5/1/2007

It didn’t fit. It doesn’t work. It’s not what I ordered.

Customers return products for a variety of reasons, and documenting those reasons is an important part of a reverse logistics program, says James Stock, professor of marketing and logistics at the University of South Florida. Stock and a research partner, Cheryl Harridy of APQC (www.apqc.org), delivered the findings of a reverse logistics study at last month’s Warehousing Education and Research Council (www.werc.org) annual conference.

“If we know why something happens, we can develop strategies to respond to it,” Stock says. That’s why he recommends assigning reason codes to all returned products and then using that data to solve the problems that cause returns.

Once companies have captured and analyzed return data, says Stock, they can correct errors in data entry or handling, correct defects in product design, develop new products or educate customers who send products back for the wrong reasons.

Carolina Logistics Services (www.cls.inmar.com), a third-party logistics provider that took part in the study, scans reason codes on all returned items and reports those reasons to its clients. One manufacturing client used that data to design buying and returns programs that reduced returns by 60%.