What is reverse logistics?
When you’re an eCommerce seller, returns can occur for a number of different reasons, but they are sometimes just simply inevitable. But, returns don’t mean you’ve lost a customer, its how you handle the returns process that can determine if they’re going to come back or not
What is reverse logistics?
Reverse logistics refers to the process of a customer returning products they have ordered back to the retailer or manufacturer for resale or disposal. The steps within the reverse logistics process will be dependent on the reason for the returned item.
For example, if the item is being returned for damage then it will need to be inspected and disposed of, or if an item is simply being returned because the customer ordered the wrong item or received the wrong item, then the item will need to be inspected and placed back in inventory for resale.
Regardless of the reason, once a customer creates a return, this is where the reverse logistics process starts.
Why is reverse logistics important?
Reverse logistics is important because allows businesses to offer a good level of service to their customers, which is extremely important since the customer experience is what contributes towards your overall customer satisfaction, retention and loyalty.
It helps to minimise the cost of operations, while also ensuring that any damaged or faulty items can be resold without needing to be unnecessarily disposed of.
Let’s take a look at a typical reverse logistics process…
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What is reverse logistics?
Reverse logistics refers to the process of a customer returning products they have ordered back to the retailer or manufacturer for resale or disposal. The steps within the reverse logistics process will be dependent on the reason for the returned item.
For example, if the item is being returned for damage then it will need to be inspected and disposed of, or if an item is simply being returned because the customer ordered the wrong item or received the wrong item, then the item will need to be inspected and placed back in inventory for resale.
Regardless of the reason, once a customer creates a return, this is where the reverse logistics process starts.
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Why do customers return their orders?
There are various reasons why a customer may decide to return their order. Sometimes, this may be attributed to a mistake on the part of your business, while other times it could be a matter of personal preference. Here are some common reasons for returns:
- The product that arrived doesn’t match the description or images used in the advert
- The product was damaged
- The wrong item was sent
- Their order arrived late
- Wrong size/fit
- Item was not as expected
- They found a better deal on a different site
- They had a bad customer experience with your brand post-order (this could be something such as poor customer service experience)
- They just simply changed their mind and want to return their order
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Why is reverse logistics important?
Reverse logistics is important because allows businesses to offer a good level of service to their customers, which is extremely important since the customer experience is what contributes towards your overall customer satisfaction, retention and loyalty.
It helps to minimise the cost of operations, while also ensuring that any damaged or faulty items can be resold without needing to be unnecessarily disposed of.
Let’s take a look at a typical reverse logistics process…
1) Return is requested
During the first stage of the reverse logistics process, your customer will request a return via your website, store front, or even directly through customer service.
2) Return is transported
Once the return has been confirmed, the customer will then send their order back to you via your designated transport option. This could be through the post office with Royal Mail, through a store drop off point, etc.
Some brands choose to offer free returns labels and shipping, while others require the customer to pay.
3) Return is processed
The final step occurs when the return is received back at your warehouse or 3PL centre. Upon receival, the items will be inspected and either placed back in stock, repaired, or disposed of. Then the actual refund will be processed and placed back in the customers account, usually within 3-5 working days.
1) Returns policy
Regardless of the sector you’re in, you should have a returns policy in place that clearly states the terms and conditions of your returns.
Having a returns policy in place will ensure your customers are informed on what classes as a valid/invalid return, how the order will be returned, how long the refund will take, etc.
2) Returns Management
As mentioned, your returns management covers a large fraction of your overall reverse logistics process and will include things such as; how the return is initiated, how it is physically transported back, and how you will process the return once it is sent back to you.
3) Resale
As mentioned, if the item being returned is not faulty or damaged, this item can be resold. It is important that you book these items back into your inventory as soon as possible so that they can be resold. You may consider re-packaging the item in fresh packaging since customers are usually able to tell when an item has been opened before receiving it.
The 5 ‘R’s of Reverse Logistics…
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Use TSP for reverse logistics
There are ALOT of things that you need to do and consider to ensure your business is successful and that you maintain a high level of customer satisfaction, retention, and loyalty. Handling everything in-house can overload your plate and result in neglecting other crucial aspects of your business.
By outsourcing your returns management, reverse logistics and order fulfilment to a reliable 3PL such as TSP you will have the ability to streamline your operations effectively.
What are the elements of reverse logistics?
There are different components that make up the reverse logistics process, each business is different and therefore may require a different set of components, but as a general rule the components include;
1) Returns policy
Regardless of the sector you’re in, you should have a returns policy in place that clearly states the terms and conditions of your returns.
Having a returns policy in place will ensure your customers are informed on what classes as a valid/invalid return, how the order will be returned, how long the refund will take, etc.
2) Returns Management
Your returns management covers a large fraction of your overall reverse logistics process and will include things such as; how the return is initiated, how it is physically transported back, and how you will process the return once it is sent back to you.
3) Resale
As mentioned, if the item being returned is not faulty or damaged, this item can be resold. It is important that you book these items back into your inventory as soon as possible so that they can be resold. You may consider re-packaging the item in fresh packaging since customers are usually able to tell when an item has been opened before receiving it.
The 5 ‘R’s of Reverse Logistics…
Use TSP to effectively manage your returns…
There are ALOT of things that you need to do and consider to ensure your business is successful and that you maintain a high level of customer satisfaction, retention, and loyalty. Handling everything in-house can overload your plate and result in neglecting other crucial aspects of your business.
By outsourcing your returns management, reverse logistics and order fulfilment to a reliable 3PL such as TSP you will have the ability to streamline your operations effectively.
