Originally published in Twice Magazine
The WEB, the information super highway, the Internet! It’s like a portal to the universe has suddenly opened up and everyone can’t wait to go through it! In a way it reminds me of the famous Twilight Zone episode, you know, the one where the giant bald headed aliens come to earth in friendship offering gifts. They present to the government and the people of earth, a book written in their language "To Serve Man". Well everybody saw how friendly they were and accepted their invitation to visit their planet. Hordes of people lined up to go visit their planet. In the closing minutes, as one of the main characters was about to enter the ship his colleague, drove up shouting, " Don’t get on…. "To Serve Man"…. It’s a COOK BOOK! Well he couldn’t get off and yes was later dinner for some alien family.
Here’s a little quiz to test how well your company is managing the returns problem. As fast as you can, name the person who runs Store Operations, Marketing, Merchandising, Returns Manager (not the Centralized Returns Manager or the Warehouse Manager). If you struggled on the Returns Manager join the group. Most companies don’t have someone who manages the returns process in its entirety. But why not? Returns will be a major factor influencing the profit of your company. Why a returns Manager? For the same reason you have a store manager or District Manager, to manage the company’s assets. Before you dismiss the idea of a returns manager, write down last years $ figure for returns. A returns manager should be able to reduce this number by 20%! Now is it worth it? An effective Returns Manager must interact with the following organizations on a daily basis to successfully manage and reduce returns: Manufacturer/Buyer, Marketing, Finance, Whse., Store Ops/ Field Reps, MIS, Human Resources, Training Dept., Repair Service, Delivery Dept., Replenishment and Loss Prevention.
Companies fail to substantially reduce returns because they let each of the aforementioned groups, do their own thing instead of appointing someone to coordinate efforts and follow the process all the way through. The return problem actually starts before the merchandise is purchased from the manufacturer and continues through to the end when product is returned.
Returns occur during one or a combination of five different phases:
To reduce returns and improve margins you need to treat returns as a business and manage it as a business. People who believe returns are a cost of doing business are living in the dark ages! Returns are a result of not managing your business properly. High Return Percentages are shouting to you that something is wrong with how you are handling the customer and/or the merchandise. Returns are not only a drain on profits but also on future business as the improper handling of a return can and will cost you customers. All the same problems exist for the manufacturer, my question for you, whether you are the retailer or the manufacturer is this:
Who is managing your returns?