By applying robotic automation to optimize reverse logistics processing, eCommerce retailers and 3PLs can change the equation for eCommerce returns.

ESG & Sustainability Action Mapping

For Your Organization. ESG conversations with companies, we tend to hear about more visible transformative factors—such as technology and research & development (R&D) investments, policies and regulatory compliance.

But in the process of driving change for all this good, they forget to address the true drivers of transformation—people.

Learn everything you need to know about reverse logistics, including the types of logistics, the process involved, steps, benefits, challenges and how to use reverse logistics to create value for your business. Plus, get advice on what it takes to be successful at reverse logistics and reduce the costs that come with returned products.

In this article:

Reverse logistics explained step by step

Six strategies to optimize reverse logistics

Reverse logistics and the supply chain

Companies and their supply chain managers can no longer afford to treat reverse logistics as an afterthought. There is just too much at stake in terms of brand protection, sustainability requirements, and ultimately profitability.

Managing product that does not sell, is entering the end of its life, or has been returned due to buyer’s remorse is now generally understood to be a critical part of product life cycle management.

Yet this has not always been the case. Historically, most of the attention paid to product management has focused on the introductory phase or on the volume-shipping portion of the product life cycle.

The leaders have greatly broadened this perspective. They know that the difference between a product’s success (and profitability) and failure often depends on how the end of life is managed.

The leaders understand, too, the business importance of taking good care of consumers. They know that customer satisfaction holds the key to long-term success and that enabling them to return products without penalty is a big part of the equation.

Policy abuse can cause retailers to lose more than 2% of their revenue each year, and yet only 46% of firms use internal technology to automatically identify repeat abusers, making it easier for unscrupulous customers to get away with fraud.

In Beyond eCommerce Fraud: How Retailers Can Prevent Customer Policy Abuse, a PYMNTS study done in collaboration with Forter, researchers found that 39% of retailers rely on manual review to identify repeat offenders, including over 63% of small firms making up to $250 million annually. Another 24% of companies rely on third-party technology, including 37% of the largest retailers.

The findings come from a survey conducted in late August and early September of 100 executives representing businesses in the retail sector that generate at least $100 million in annual revenue. The most common types of policy abuse include item not received (INR) abuse, in which a customer falsely reports theft or non-delivery of an eCommerce purchase; return abuse, when a customer returns items that are not eligible for return; and promotion abuse, when a consumer uses multiple accounts to take undue advantage of rewards, sales or other promotions.