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Companies and individual consumers have always returned products for reasons ranging from item defects to incorrect size or color to simply a change of heart about the purchase. And when those transactions took place in small numbers, the companies would handle the returns in whatever way made sense at the time. Often, there was no clearly defined process.
That somewhat haphazard approach has changed dramatically in recent years, giving rise to the field of reverse logistics. Exactly what it sounds like, reverse logistics is the term for the sum of activities that take place between when a buyer takes possession of a product and when it has been returned and disposed of in the appropriate manner.
As TechTarget defines it: “Reverse logistics is the set of activities that is conducted after the sale of a product to recapture value and end the product’s lifecycle. It typically involves returning a product to the manufacturer or distributor or forwarding it on for servicing, refurbishment or recycling. Reverse logistics is sometimes called aftermarket supply chain, aftermarket logistics or retrogistics.”
Today, there are third-party logistics (3PL) companies that specialize in this discipline and technology explicitly designed to simplify it. Reverse logistics software and systems are necessary because tracking, accepting, categorizing, and processing returns is challenging. So is determining how to maximize the value of returned merchandise since many options have to be weighed—restocking, recycling, refurbishing, donating, selling on the secondary market, etc.
But retailers are getting an assist from advanced systems—often powered by artificial intelligence (AI)—that can take several factors into account to quickly and effectively determine which return channel benefits the company most.
Reverse Logistics: More Important Than Ever for Businesses
One of the primary reasons that reverse logistics is such a high-stakes endeavor is that return volumes have…
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