stores. That’s because they very often are unused, and are
unopened and still in the original packaging, says David
Vehec, senior vice president, retail for Genco, a third-party
logistics company (3PL) and reverse logistics pioneer. Store
returns are more likely to have been removed from the
packaging and to show signs of use.
Historically, e-commerce purchases, especially consumer
electronics, have yielded more “no defect” or “no fault
found” diagnoses than other types of returns, says Steve
Sensing, vice president and general manager of high-tech
operations at Ryder Supply Chain Solutions. One reason is
that online shoppers don’t have the opportunity to physically examine an item until after they have paid for and
received it. “You get a higher percentage of buyer’s remorse
with someone who buys on the Internet than you would
with someone who goes to a store and makes a purchase,”
he observes.
Another reason for the high rate of “no defect found” e-commerce returns is that the consumer typically obtains a
returned merchandise authorization (RMA) by filling out
an online form. “At a store, associates have the opportunity
to challenge the customer and ask questions about why they
are returning the item,” Vehec says. “When you’re dealing
with a Web purchase, you don’t have that [face-to-face]
engagement with the consumer.”
SEPARATELY OR TOGETHER?
All that creates some challenges for facilities that accept
returns of merchandise ordered online, particularly in a
multichannel or omnichannel environment. “How you
handle [returned merchandise] depends on whether it is
coming back through a storefront or through e-commerce,”
Vehec says. “When you combine the two, that’s where the
complexity increases.”
Carrie Parris, who as director of corporate strategy at
UPS is responsible for the company’s reverse logistics strat-
egy, cites the example of “noncongruent” inventory—items
a customer buys online or in one store location and returns
to a store that does not carry that particular stock-keeping
unit (SKU). When that happens, the store staff must accept
an SKU that is not in their system, be able to track its
whereabouts, and make decisions about its disposition
based on the retailer’s policies. “Some of our retail cus-
tomers have a clearance strategy [putting all returned mer-
chandise on the clearance racks] and call it a day, while
others pull noncongruent inventory back to the DC,”
Parris says.
Another challenge involves refunds and credits.
Consumers usually receive them on the spot when they
return merchandise to a store. But in e-commerce, the seller must verify that the specific items that were authorized
for return have actually been received before it can issue a
refund or a credit. That can stretch things out and color the
online shopper’s perception of service quality. Some e-tailers, therefore, rely on certain shipment tracking events to
trigger refunds. Others wait until the items have gone
