Merchandise returns are a fact of life for many companies, and one that is nearly impossible to avoid.

Returns can substantially affect a company’s gross profits. How much your gross profit falls depends on the mechanics of how you handle returns. But did you know that your return policies and procedures can also affect the future profitability of your business?

You’ve spent substantial time, money and effort into your logistics on the supply chain side. But how much have you paid attention to your reverse logistics? If the answer is “not much,” paying more attention to your returns could be the key to future profit growth.

What Is Reverse Logistics?

Although this important concept is becoming more well-known, many businesses are not familiar with reverse logistics or have confusion about it.

Much like the logistics of the supply chain leading up to the point of sale, reverse logistics pertains to all activities that occur after the point of sale. This could include customer support, warranty service or, for the purposes of this discussion, product returns.

The more efficient your reverse logistics processes, the more successfully you can manage returns.

Challenges of Product Returns Management

Once you reach the point of shipping a product to the purchaser (or handing it to them in the store) all your hard work has been done, right?

Although that’s often the case, some percentage of your customers will need to return the item. And, when they do, your company must provide some level of additional customer service.

Before technology provided consumers with so many ways to purchase, returns were fairly straightforward. The customer brought the item back to the store, handed it over and got a refund or an exchange. At the point of return, the disposition of the item was also straightforward. It went back to inventory whenever possible, it went back to the manufacturer or it was disposed of in some way.

Today, your customers may need to return an item by shipping it. Others want to return it in person at a location that is convenient to them. They may want you to issue a refund, send a replacement item, provide repair or take some other action depending on the circumstances.

To provide a positive experience, you must make this process as simple as possible for the customer. To minimize the negative effect this has on your profitability, you need clear policies and procedures for handling every facet of returns.

Using Reverse Logistics to Improve Product Returns Processes

The truth is that the supply chain does not stop at the point of sale, at least for most businesses. And, whatever emphasis you place on logistics, reverse logistics deserve a similar level of attention.

In the realm of returns management, you must find ways to streamline the processes and maximize the recovery of value. Reverse logistics can enable you to accomplish both goals. As a result, you’ll earn the loyalty of the customer and you will recover as much value from the return as possible.

A reverse logistics technology solution – like ReverseLogix – is one of the simplest and most cost-effective ways to unlock the value of the returns process. We developed ReverseLogix specifically for the reverse chain, with the goal of helping our customers maximize accuracy and value reclamation while reducing the costs associated with returns management.

ReverseLogix is the industry-leading returns management solution. Contact us today to learn more about how we can help you manage product returns for your business.