Maximizing Returns: Unleashing the Benefits of Processing for Brands and Retailers
Anyone responsible for returns understands the importance of minimizing financial loss. Returns are usually looked at as a losing game, a necessary but costly process that drains financial resources and time, especially for companies with a global presence. But there are ways to make returns more cost-effective and minimize the losses from returns. And in today’s competitive market, this is more important than ever when bottom lines are under pressure. One of the most impactful ways to lower the cost of returns and increase efficiency is not discussed very frequently. The secret lies in how you process returned items. Processing is an often-overlooked area that can have a strong impact on your bottom line and make a significant dent in your losses if done right. In this blog, we will dig into the countless benefits that processing offers to brands and retailers, and how to execute it in order to gain the most benefits possible.
Maintain product value
Item devaluation can occur quite quickly while an item is within the return cycle. Our research shows that on average, a product loses 0.5% of its retail value per day that it is not back on your shelves. Especially in the fashion industry where seasonal items come and go quickly, if your processing time is too slow, you’ll be forced to sell the product at a discounted rate—or worse, send it directly to an outlet store. To maintain product value and have the best chance of reselling at the original price, return lead time should be as short as possible.
Advanced processing can dramatically shorten return lead time, helping you maintain product value (as mentioned above) and reduce internal workload. At ReBound, this is one of the most impactful ways that we help our clients. In our network of local warehouses, we have the capability to rework returned items to bring them back to a resellable state. This can include light cleaning, refolding, repackaging, retagging, relabeling, and more. With our foolproof digitization of client SOP documents, we can ensure that each item is reworked in exactly the way any client wants.
By restoring items to a resellable state, we are able to help our clients get items back on their shelves as quickly as possible to be resold for maximum value. This is a huge benefit not only because it helps prevent and reduce item devaluation, but also because our clients no longer need to allocate warehouse space and staff to reworking items.
Another way that processing impacts efficiency in a positive way is by using logic to grade and route items to their next destination in the smartest way possible. We work with our clients to choose grading criteria which can be done either by A, B, C or by pass/fail. Each grade can have an associated end destination. For example, a client may want all A-grade items sent back to their distribution center, all B-grade items sent to one of their outlet stores, and all C-grade items sent to a local recycling facility. The routing can also be done on other item specifications, like brand, item type, product category, etc. This reduces parcel movement, which is not only more efficient but also more sustainable and cost-friendly.
Decrease carbon footprint and increase sustainability
Many brands simply do not have the capacity to rework items. They may lack the warehouse space and/or staff, which means that any returned item that is not in perfect condition can end up in a landfill. By incorporating advanced processing into your returns lifecycle, you can divert items from landfills. By minimizing waste and maximizing the value of returned products, businesses contribute to a circular economy while meeting the expectations of eco-conscious consumers.
Improved customer experience
Another major benefit of processing is improved customer experience. You might be wondering, how can processing affect the customer? Well, we created a product specially designed to help our clients refund their customers without risking fraudulent returns. We call this product refund trigger. When a returned item first hits one of our warehouses (usually within 3 days of being sent back by a customer due to our robust network), we scan the parcel and open it to check what is inside. If the item passes the check, we send our client a refund trigger, indicating that it is safe to send a refund to the customer because they have sent back the expected item and it is in good condition. Our clients can then issue fast refunds, without needing to wait until the item hits their central distribution center. This has helped our clients to significantly improve customer experience, since refunds have a huge impact on customer loyalty.
In today’s dynamic retail landscape, returns management plays a pivotal role in shaping customer experiences and brand perception. Processing solutions, such as those offered by us, provide brands and retailers with a powerful arsenal of tools to transform their returns processes. By embracing smarter ways of processing returned items, brands can enhance efficiency, reduce costs, improve customer satisfaction, and drive long-term success. As returns become an opportunity for growth rather than a burden, processing solutions emerge as a game-changer for brands and retailers, paving the way for a seamless and customer-centric returns journey.