Logistics Wordbook

Returns Management

Logistics Glossary

Due to the volume and frequency, returns management has become one of the biggest challenges for logistics managers in mail order and logistics companies. E-commerce offers the customer an extremely flexible return policy, which is now standard in the industry. It has proven to be an effective strategy to eliminate potential downsides of buying online and increase sales.

However, reverse logistics consumes resources and complicates the processes along the supply chain: How can returns management in mail order be tackled successfully? Let’s look at some measures:

1. Integrate returns management as a fundamental part of the supply chain

Before Logistics 4.0 , returns were the exception to the rule. In e-commerce logistics, however, they are now standard and part of daily warehouse operations. The returns management of the mail order business must therefore play a corresponding role in the supply chain.

This requires coordination between the various links in the supply chain , which requires full integration of the software active in each phase. This means that the information must be available and managed in all systems involved. These systems typically include the WMS in the warehouse, the TMS (Transport Management System) of the transport fleets, and the ERP (Enterprise Resource Planning) that provides a common database for all.

This enables better control and planning of the flow of goods . In fact, the traceability of orders is not only important for communication with the customer, but also for the warehouse to know when it receives return orders and to organize transport operations accordingly.

2. Identify the causes of returns to limit them

After receiving the products, it is important to know the reasons for the return . In this way it becomes clear:

  • which points in the process should be optimized in order to reduce the costs caused by the returns . If the causes are known, measures to avoid them can also be taken, e.g. B. the systematic verification of delivery addresses or the possibility to cancel the order within a certain period of time to counteract impulse purchases that end up being returned.
  • what steps to take next: For example, if a customer returns a product but at the same time wants an exchange, the new order can be delivered and the package to be returned picked up in the same way.

One must not forget that returns management in the mail order business is part of the customer ‘s shopping experience. Therefore, only strategies that build a relationship of trust with him should be used. The offer of different collection points ( omni-channel logistics is important in this context) or the provision of specially prepared packaging for returns are, for example, measures that strengthen returns management in the mail order business.

3. Adapt the warehouse to the returns management in the mail order business

To keep the warehouse from falling into chaos after promotions like Black Friday , it should be prepared to handle a steady volume of returned products. The first step is to set up a dedicated area for quality control of returns as part of returns management .

In addition, the warehouse management system plays an important role, as it allows:

  • Establishing clear procedures for conducting quality control and minimizing situations that can lead to disruptions in the supply chain. Therefore, the goods receipt process must also take returns management into account.  accelerating the entire process.
  • Re-labelling of the goods for later storage and management of the new locations dedicated to these products.
  • Updating the information in the warehouse database to have a better control of the available stock.

Successful returns management in ecommerce business is based on process integration and effective communication between all those involved in the supply chain. If you want to work with a professional fulfillment service with returns management capability, sign up with Waredock today.

 Get weekly insider tips, how-to-guides and latest news in our online magazine.