How to Maximize Your 3PL’s Recovery

Processing returns is time-consuming and costly for retailers. Deciding whether to restock, liquidate, donate, or discard a returned item drives up costs and can eat into sales numbers. Gartner retail analyst Tom Enright told WSJ that returns will become a “trillion dollar problem.” Looking at the National Retail Federation numbers, he may be right. 

In 2023, the NRF found that total returns as a percentage of sales were 14.5%, totaling nearly $740 billion in returns. While those numbers are down from the year before ($816 billion of merchandise was returned, making up 16.5% of total sales), they are still big numbers for retailers. 

Retailers must learn how to assess returns quickly and decide what to do with them to take advantage. Reselling helps recoup some of the expense but even donating or scrapping the returns can be cheaper if done quickly. 

4 Key Elements of Returns Management

Setting up an efficient returns management strategy is important for retailers. Four main factors affect how well it works: 

• Speed: Returns must be received quickly, assessed efficiently, and then relisted for sale, donated, recycled, or scrapped as fast as possible.
• Visibility: Retailers must know where returned items are at all times during the process to ensure fast assessments and restocking.
• Control: Retailers with full control over the returns process generally have more visibility and efficiency. 
• Cost: Returns must be managed efficiently throughout the lifecycle to control costs and support the company’s bottom line.

Some retailers may have a fast assessment and restocking process but need more visibility. They may not know where returns are until they show up for resale or appear in their reporting portal’s “scrapped” column.

Many retailers turn to a third-party logistics provider (3PL) to ensure high efficiency, speed, and control over their returns. They enjoy the benefits of an efficient returns process without dealing with the overhead. These 3PLs are a single point of contact for retailers, offering the expertise they may lack and the chance to recoup revenues on resale items and reduce scrapped losses. But there’s more to just engaging a 3PL if retailers want to maximize their returns recovery. 

The Secret That Optimizes Returns for Maximum Recovery

Cloud-based, purpose-built reverse logistics software is the secret to maximizing returns recovery for today’s retailers, whether they use a 3PL or manage returns themselves. No matter who made the initial sale, tech-forward returns management software helps companies manage everything from return pickups and drop-offs to tracking returns end-to-end and product assessment, grading, and disposition to customized return reporting, often in real-time. 

For example, with the right reverse logistics management solution, companies can know: 

• Where a return is in the overall lifecycle
• What is the assessment outcome 
• How much inventory they’ll have for resale
• How much inventory they’ll have for other purposes, such as recycling or breaking down for parts resale
• The amount of product loss they’re dealing with through return donations and waste
• How long it takes for returns to be received, processed, and resold
• The total cost of a product, from manufacturing to sale, return assessment to final disposition (resale, breakdown sale for parts, recycling, etc.)
• The time and cost breakdown of the return lifecycle  

No matter the industry or business model, all companies can gain an advantage in their return management with the help of return management software. 

The Benefits of Optimizing Your Returns Recovery

Businesses that use return management or reverse logistics software see immediate financial benefits with a more efficient process that reduces or eliminates manual processes, identifies areas for reallocated headcount, and reduces inventory cycle time. 

Over the long term, companies using reverse logistics solutions on their own or as part of a 3PL partnership enjoy more visibility into their returns process, empowering them to optimize things even more. Staff will be able to identify new processes and product opportunities and take action since they’ll have more time to do so. 

Customers appreciate efficient return processes because they feel more supported by the retailers and companies throughout their buying journey. Not every product is a 100% winner, so they should be able to return the product quickly and get a refund or replacement item. 

Both companies and customers will enjoy the benefits of an optimized returns experience that builds stronger customer loyalty and drives continuous improvement, ensuring long-term success for everyone. 

Upgrade Your Returns Process

Maximizing returns recovery is essential for retailers looking to reduce costs, improve returns process visibility, and increase customer satisfaction. Adopting the right purpose-built solution for your business can enhance the speed, transparency, and management of the returns process. Your business saves money, generates additional revenue, and shows off your commitment to environmental responsibility with an optimized returns process. 

Adding the latest returns management technology to your returns process benefits your bottom line and builds customer trust and loyalty, making it a win-win for everyone. 

To learn how to optimize your returns process and maximize your recoveries, contact G2RL today.