Have you ever noticed how much you rely on electronics in everything you do? Did you know that consumer electronics is one of the fastest-growing industries? In 2020, the consumer electronics market size was estimated to be over $1 trillion with a projected growth of 8% annually!

With the COVID-19 pandemic, there was a huge jump in buying behaviors of consumers. Items like bread makers, air fryers, and freezers have become increasingly more in demand as people shift to working from home. With this trend, staying connected has become a priority, so sales on Chromebooks, laptops, computers, and monitors have also skyrocketed.

As a result,  electronics returns management is becoming an important issue in the industry. Many companies have opted to outsource electronics returns management in order to reduce costs in the triage of returned items and to mitigate loss. Believe it or not, returns amount to 8.1% of sales. Through a well-designed electronics reverse logistics strategy, vendors hope to regain 4% of this loss.

Why Are Electronics Returned?

More than 41% of consumers report that if they return a non-defective electronic device, it’s because they were having problems unboxing and setting up the item. Many also reported that it was because of the difficulty and complexity of installation or use.

You can avoid this type of return with good customer service both pre-sale and after-sale. Remember, the customer journey doesn’t end when they’ve entered their credit card information and hit purchase. Nor does it begin when they’ve added an item to their cart. 

Product manuals and visuals are often not enough to prevent a return. Many customers need a “try before you buy” opportunity to feel confident. Unboxing and installation videos are also helpful, as well as having access to live video consultation during the process.

Other reasons for the return of electronics include:

  • The electronic product was defective
  • It was a gift and the recipient didn’t want it
  • It didn’t accomplish what the buyer wanted
  • Fraud

This last reason is the most difficult to deal with. It can involve “wardrobing,” which is difficult to identify. For example, a customer will purchase a big screen TV to watch the Super Bowl, then return it after the game has ended and their guests have left.

Fraud can also involve purchasing expensive electronics with a stolen credit card, then returning them for cash. It can also involve returning an item after the removal of key components that are not immediately visible at the time of the return.

The problem of fraud can be mitigated by more stringent return policies. Costco, which has one of the most lenient return policies on most items, will limit electronics returns to 90 days with a receipt. Carefully weighing the length of time that is appropriate for your customers to commit to their purchase is essential. Too short and you’ll scare away your buyer. Too long and you open yourself up to fraud.

Most electronics merchants will only refund the credit card for a purchase and not give cash. Business rules will also involve customer service examining a returned item before issuing a refund. 

These systems are not foolproof, and fraud can cost vendors millions of dollars annually.

Need help managing your electronics returns?

What Are Good Electronics Returns Management Practices?

The return process for electronics is key to a good customer experience. Having a clear return policy is part of business rules in many states. When effectively managed, it brings the customer back and increases sales and customer loyalty.

The system for good electronics returns management needs to run smoothly like a rules-based engine. It needs to be simple enough that your employees can learn and follow. But it also needs to encompass the ingenuity of the consumer. Game out the returns policy with your team to identify potential loopholes and risks for your company.

Keep these 6 considerations in mind:

1. Establish Clear Policies

With clear policies and procedures on returns, staff assigned to dealing with the items will be able to get them back on the shelf or out the door quickly and efficiently

2. Manage Profit and Loss On Returns

There needs to be accountability on reverse logistics with it being worked into the budget. This would include staff time managing returns and loss on defective devices.

Pay attention to which devices customers return most often. Share this with engineering and purchasing. Some electronics are prone to defects in certain areas and should be discontinued or pulled from shelves. Others lack clear instructions for set-up and use and need more customer support before and after the sale.

4. Automate Data Collection

Keep track of warranty validation and processes through automation. It will reduce the time required to meet the needs of the buyer. Automation will also identify patterns in the electronics product returns that will help you make informed decisions to reduce returns.

5. Customer Support

Are customers returning electronics out of frustration or inability to set up or use the device? Maybe providing more technical support pre-sale and after-sale will decrease returns and increase customer satisfaction with their purchase.

6. Outsource Electronics Reverse Logistics

Instead of dealing with this in-house, you can use a more efficient way. Consider calling on a third party to deal with electronics returns management.

What Is Electronics Reverse Logistics?

Industry experts report that consumers return between 11% and 20% of electronic devices. This becomes challenging and overwhelming to merchants whose objective is sales. Refunding or replacing up to 20% of all sales can be a logistical nightmare. That’s where reverse logistics come into play. Outbound logistics involves pallets of boxed and shrink-wrapped products. Reverse logistics is far more complex with returned items requiring repackaging, palletizing, counting, and shipping.

Vendors outsource returns management so they don’t have to dedicate specialized staff to the complexities of returned items. Once triaged, the returned electronics products need to be dealt with quickly and efficiently.

If the device is not defective, it’s a simple task to rebox the item and return it to the shelf. If it is defective, checking for a warranty is the first step. Depending on the warranty, the product will need to be replaced or repaired.

If the device needs a simple repair, it can be done by specialized staff. It can then be refurbished, repackaged, and sold to a secondary market. Secondary markets such as outlets, salvage centers, and auctions are a growing industry in many parts of the world.

If the electronic device can’t be repaired or needs replacement parts in order to get it back on the market, it will need to be disposed of. The disposal of electronics is increasingly regulated due to a growing concern about hazardous wastes ending up in landfills. This may involve the removal of parts and disposal in any of several methods.

With all the demands of dealing with returns, maybe it’s time to outsource reverse logistics.

The Best Option for Electronics Returns

To recoup losses, you want to get your electronics products back onto the shelves as quickly as possible. A third-party electronics reverse logistics company that specializes in doing so is often the answer. Contact G2 Reverse Logistics today so our team of experts can take away the stress of returns management from you, allowing you to focus on growing your business.


Written By:

Eric’s 25-year career has been entirely centered on supply-chain management, starting as an intern from Middle Tennessee State University, as an Inventory Control Specialist at the nations largest private-label healthcare manufacturing company.