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Happy Holidays, Happy Returns
No period is worse for product returns than the holidays.
But returns - now estimated to exceed $100 billion annually in the United States - are an increasing burden year-round not just for retailers, but for almost every company that makes and sells a product.
There are lots of reasons for this trend - the rise in electronic retailing, the increase in catalog purchases, more self-service in stores, says Thomas Speh, associate dean of Miami Universitys Richard T. Farmer School of Business and co-author of a recent article on returns in the Harvard Business Review.
When U.S. consumers return goods each year whose total exceeds the GDP (gross domestic product) of two-thirds of the worlds countries, its time to pay attention to the issue, says the Miami business professor.
Although many companies view product returns as a costly nuisance, some savvy businesses are making the process profitable, says Speh.
What does it take to recast a backwater operation like returns processing into a profit center? Speh and co-authors James Stock of the University of South Florida (Tampa) and Herbert Shear, chairman and CEO of Genco Distribution System (Pittsburgh), outline three steps:
Companies that are leaders in dealing with returns, according to Speh, include Sears, Estee Lauder, eBags and Roadrunner Sports.
Speh is president of the Council of Logistics Management and co-author of a leading textbook on business-to-business marketing.