After New Year’s Eve comes and goes, it’s tempting for warehousing and fulfillment professionals to pause and take a breath. Unfortunately, a new year brings a different volume spike as holiday gift returns pour in.

Gone are the days when warehouses could let returned items pile up in an empty corner for a week or two until someone had time and energy to sort through them. Instead, the returns experience has become critical to the overall customer experience. Many consumers will abandon a brand after just one bad return experience, which means good return policies and practices are now a competitive differentiator for online retailers.

How to Win at Returns Management

Handling returns can prove difficult in some warehouses because it diverts labor from other tasks, which may create undue stress on the rest of the fulfillment operation. However, you can make a few changes to level up your returns management game.

Dedicate permanent resources to returns management

For decades, returns coming into the warehouse were placed out of the way until operations slowed down enough to deal with them. That strategy no longer works in an era where consumers expect everything to happen fast. Delaying refunds and damaged item replacements due to poor returns management practices is a good way to lose customers.

Modern fulfillment centers should have dedicated space for processing returned goods to avoid interfering with other processes and functions in the warehouse, and to keep returns from getting misplaced. In this space, associates can inspect returns, scan them into the system, repackage them for sale, or dispose of damaged items as needed.

Along with that dedicated space, you should dedicate warehouse associates to work in it. Pulling associates from picking and packing operations to handle returns reduces the capacity of the fulfillment operation. It also places unwanted pressure on the pickers and packers, who must make up the difference while shorthanded. This practice can harm the employee experience and directly impact your retention rates.

Use technology to improve returns management workflows

You’ll need to turn to technology to maintain speed and efficiency in your returns management processes. Here are some options that can help to reduce errors and improve efficiency to ensure you get useable items back into inventory as soon as possible:

• Warehouse management system – A warehouse management system (WMS) is the cornerstone of any good returns management program. Most modern WMS solutions should include at least some automated capabilities for returns processing and offer data on why goods are getting returned. For example, you can analyze your returns by the carrier who originally delivered them to see if one specific carrier is damaging your shipments. If you’re using a legacy WMS, however, you might find it has limited functionality for returns processing.
• Returns management system – A returns management system (RMS) specifically manages the end-to-end process for product returns. Good RMS solutions integrate with your order management system (OMS) and WMS to help you coordinate every step of returns management.
• Barcode scanners – Scanning barcodes is a staple of returns management. For smaller operations, handheld barcode scanners are usually fine. For facilities that process hundreds of returns daily, automated scanners give warehouse associates more bandwidth and keep returns flowing. Some AI-powered scanning solutions can even update inventories and determine the best warehouse to restock the returned item.

Getting Returns Management Help from Your 3PL

If you use a third-party logistics (3PL) provider to handle some or all of your brand’s order fulfillment, asking them to handle returns can reduce strain on your internal resources. A 3PL should be well versed in handling returns for the industries it serves, so your customers will benefit from the knowledge and efficiency the logistics partner can provide in the end-to-end returns process. Furthermore, a 3PL should have dedicated returns management space and the technology needed to run it efficiently, which lets you reap the benefits without the upfront investment.

About Phoenix Logistics

Strategic Real Estate. Applied Technology. Tailored Service. Creativity. Flexibility. These fundamentals reflect everything we do at Phoenix Logistics. We provide specialized support in locating and attaining the correct logistics solutions for every client we serve. Most logistic competitors work to win 3PL contracts, and then attempt to secure the real estate to support it. As an affiliate of giant industrial real estate firm Phoenix Investors, we can quickly secure real estate solutions across its portfolio or leverage its market and financial strength to quickly source and acquire real estate to meet our client’s need.