60 Seconds with Tony Sciarrotta, Executive Director of Reverse Logistics Association

Tony Sciarrotta
Reverse Logistics Association
Title: Executive director
Location: Alpharetta, Ga.
Experience: More than 20 years of experience in reverse logistics and returns, including 6 years as the executive director of RLA

Modern: How did you become involved in reverse logistics?

Sciarrotta: Around 2001, I was working in sales and marketing at Philips when I was asked to fix the returns problem. As I was looking for a solution, I discovered the Reverse Logistics Association and a community of people just like me. I joke that my job at Philips was to work myself out of a job. By 2013, we had a well-run returns organization and I retired.

Modern: When did you join RLA as the executive director?

Sciarrotta: I joined the organization as a board member while I was at Philips. After I retired, I saw an opportunity to reorganize RLA, and with the support of some of the board members, I became the director in August 2016.

Modern: How do you describe RLA’s mission?

Sciarrotta: Our elevator speech is that RLA is the global voice of the reverse logistics industry, primarily because no one else is doing it. Half our members are the manufacturers and retailers that make and sell stuff and then get it back. The other half are the solution providers that help them do that.

Modern: What has kept you in this aspect of the industry?

Sciarrotta: I just fell in love with the idea of doing something good for the planet, my company and the consumer. It was an absolute win-win, and it’s a real passion of mine.

Modern: Given the rise of e-commerce, how do you describe the state of returns today?

Sciarrotta: According to NRF, there was $761 billion in returns in 2021. That’s bigger than Amazon’s and Walmart’s sales. If the returns industry was a country, it would be No. 18 in terms of GDP. By some estimates, one in four retail packages are coming back. No one can keep up with it. It’s just too much. Unfortunately, it’s still the dark side of retail, hidden in the backrooms. Too much of returns is still treated like junk.

Modern: If that’s the case, what’s the biggest change you’ve observed in how companies are approaching returns today versus when you were a practitioner?

Sciarrotta: In the late 90s, when digital was taking off, Philips and many manufacturers took everything back from the retailer. I’d estimate that 75% of the returns to Walmart or Target went back to the manufacturer. Now, 75% is liquidated by the retailer and only 25% goes back to the manufacturer. The manufacturer has moved the responsibility to the retailer. That makes the ESG score better. That’s a huge flip.

When it comes to technology, returns are so unpredictable and the products are so variable, that you don’t see a lot of robots running around return warehouses. But, real strides have been made in software to help retailers determine how to dispose of an item at the start of the process: Can it be resold as is and at what price; can it be refurbished; can it be donated. There is no profitability in the returns industry, but software is helping companies increase their asset recovery and minimize losses.

Modern: When should a company consider outsourcing its returns program and when should it bring it in house?

Sciarrotta: If you’re not willing to invest in the structure you need to do it internally, it’s better to let a third party handle your returns. But, if your brand is important to you, and if you care about the customer experience, you need to empower a director at the VP-level who can manage the end-to-end process of reverse logistics. We offer a roadmap on our website that illustrates why we’re all part of the circular economy.