Recent delays in delivery, congestions at ports and stock shortages have drawn our attention towards supply chain challenges. The challenges that are discussed are mostly the ones faced in the forward supply chain, whereas, the reverse supply chain is often overlooked. The prevailing ‘return culture’ is what contributes significantly to the delays and congestions that we witness today.
Most of the post-purchase costs that are incurred by retailers are because of returns and refunds. While ‘easy return and exchange’ makes online shopping an attractive option, it comes with far-reaching implications. The lenient return rules that are set by the companies allow customers to return products at random times and in small batches.
It is a nuisance for companies to accept returns and it is also an inefficient and costly process. Despite this, companies continue to offer such services to be able to retain customers.
According to a survey, dreadful return policies have proved to be a dealbreaker for many customers and most customers read the return policy even before initiating a purchase. A whopping 55 per cent of shoppers admit that they were likely to return one or more of their purchases even before they receive them. Most of these products, that the retailers work hard to bring to their customers, are returned and sent back instantly.
What happens to the items that are returned?
Opposed to what we might believe, most of these items do not re-enter the market for resale. There are several layers of work involved before an item re-enters the market, including quality checks, repairs, repacking and restocking.
These processes are so tedious that sometimes it is more cost-effective to completely dispose of these items than to refurbish them, causing them to end up in landfills. Products that do manage to make it back to the market spends several months in transit.
There are ways in which this problem could be tackled:
Several costs can be cut down if customers choose to return to the stores.
To foster in-store returns, retailers could develop incentives like coupons or store credits.
Companies that are purely online should initiate centralized drop and pick up points to avoid local courier costs, especially for smaller packages that are scattered over the town.
E-commerce giants must also strive to direct their ‘waste returns’ to charities instead of landfills.
Better digital tools like virtual clothing could help customers get a ‘real feel’ of the products before purchasing them, which could thereby reduce the need for return.
Finally, a huge chunk of the damage can be placated by us, the customers. By being sensitive towards the environment and other related resources, we would not only reduce wastage but also alleviate supply chain congestions by making smarter choices.
Shoppers must strive towards - ‘shopping to keep and not shopping to return.’
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