DC Velocity - February 2017

newsworthy

Holiday returns volumes reach new high, UPS says

E-commerce returns were on track to reach a new high following the 2016 holiday season, pushing retailers and carriers to search for ways to control the soaring costs of reverse logistics, according to data from UPS Inc.

An unprecedented volume of online sales drove another record year for returns, with holiday shoppers projected to return more than 5. 8 million packages via UPS during the first full week of January 2017, including 1. 3 million packages on Jan. 5 alone, the Atlanta-based transport and logistics giant predicted. The company had yet to disclose actual peak-season volumes at press time.

The rising volume of returns presents a challenge for retailers as well as carriers, since e-commerce sites need to strike a balance between reducing the cost of handling returns and meeting consumer expectations for an easy shopping experience.

“Online shoppers want the same level of choice, con-
trol, and convenience making their returns as they do
making their purchases,” UPS Chief Marketing Officer
Teresa Finley said in a statement. “While returns can’t
be eliminated, an easy-to-use returns experience should
be one of several retail strategies to enhance customer
loyalty and manage the cost of returns processing.”
Over the past five years, retailers have taken signifi-
cant strides to improve the customer service experience
of their returns programs, according to UPS’s most
recent “Pulse of the Online Shopper” study. Comparing
conditions between 2012 and 2016, consumers report-
ed fewer issues paying for returns shipping (decreasing
from 66 percent to 50 percent), paying restocking fees
(decreasing from 43 percent to 27 percent), and experi-
encing a delay in receiving credits or refunds (decreas-
ing from 41 percent to 27 percent), that analysis shows.

E-commerce companies achieved those improvements through a number of steps aimed at assuring an efficient returns experience, UPS said. Those steps include free returns shipping, a hassle-free returns policy, easy-to-print return labels, timely refunds, and packing a return label in the box.

NOT THERE YET

Still, most companies have a long way to go in holding down the cost of returns, said Ken Chrisman, president of product care for Charlotte, N.C.-based packaging giant Sealed Air Corp.

“If you’re an e-commerce company, there are four
primary costs: labor, shipping, damage or returns, and
packaging. Handling those costs determines whether
you’ll be profitable or not,” Chrisman said in a phone
interview. “How do most companies handle that effi-
ciently? The answer is, most don’t.”
The simple step of packing a return label with each
original shipment can make a big difference in han-
dling returns efficiently, Chrisman said. He added,
however, that there is no one-size-fits-all approach.

Companies with high return rates can reduce costs with reusable packaging, Chrisman said. That is crucial because carriers now charge by dimensional weight standards that could run up a big bill if consumers pack their own return parcels using oversized boxes, he said.

To encourage consumers to reuse original packaging, Sealed Air recommends that retailers automatically insert a return label with the original shipment, include peel-off adhesive backing on that label in case consumers don’t have packing tape, and ship resealable packing envelopes for smaller items so customers can return the product in the original wrapping.

—B.A.

Logistics Plus Inc., a provider of transportation, logistics, and supply chain solutions, has opened a new 272,448-square- foot warehousing and fulfillment operation in Ontario, Calif. … Indianapolis-based 3PL Pro Trans has expanded its North American network with the opening of a new facility in Houston.