3PLs need rock-solid returns management in today’s ecommerce landscape

The growth of ecommerce returns

The numbers tell a compelling story: ecommerce return rates are significantly higher than brick-and-mortar returns, often ranging from 20% to 30% for apparel and accessories. This amounts to hundreds of billions in annual returns. For retailers and brands, managing this reverse flow of goods presents both operational challenges and significant costs.

Watch the video to learn how Logiwa IO streamlines returns management.

Consumer expectations have also evolved dramatically. Today’s shoppers demand free returns, quick refunds, and transparent tracking throughout the returns process. These expectations put increased pressure on 3PLs to deliver seamless returns management services to their clients.

Returns management can make or break 3PL success

For 3PLs, the ability to handle returns efficiently can be the difference between winning and losing major clients. Today, companies looking for logistics partners prioritize returns management, understanding that returns directly impact their bottom line and customer satisfaction.

Modern warehouse management systems like Logiwa IO are adding returns management functionality into their core offerings. This integration allows 3PLs to process returns more efficiently while maintaining accuracy and providing real-time visibility to their clients.

Creating an efficient 3PL returns process

A successful returns management operation requires several key components working in harmony:

Returns authorization and tracking

Modern 3PLs leverage automated returns authorization systems that generate unique tracking numbers and provide customers with shipping labels. Logiwa’s returns management module streamlines this process by automatically generating return merchandise authorization (RMA) numbers and updating inventory systems in real-time.

Warehouse space optimization

Dedicated returns processing areas are essential for efficient operations. Leading 3PLs designate specific zones for returns processing, inspection, and disposition. Optimizing fulfillment warehouse layout  prevents returns from disrupting regular fulfillment operations while ensuring returned items are processed quickly and accurately.

Quality inspection protocols

Standardized inspection procedures help determine whether items can be restocked, need refurbishment, or should be disposed of. Logiwa’s fulfillment management system (FMS) supports this process with mobile scanning capabilities and customizable inspection checklists.

Inventory reconciliation

Accurate inventory tracking is crucial for returns management. Integration between returns processing and inventory management systems ensures stock levels remain accurate and clients have full visibility into their inventory status.

Logiwa IO’s WMS software supports an efficient returns process

Technology plays a pivotal role in modern returns management. Cloud-based WMS solutions like Logiwa provide the necessary infrastructure to handle complex returns processes efficiently. Key technological capabilities include:

• Real-time tracking and visibility
• Automated returns processing workflows
• Integration with client systems
• Data analytics for process optimization
• Mobile scanning and processing capabilities

With these tools, 3PLs can handle returns faster, with fewer errors, and greater transparency.

Value-added services 3PLs can offer

Leading 3PLs are expanding their returns management services to offer:

Refurbishment capabilities

Many 3PLs now offer basic repair and refurbishment services, allowing items to be restored to sellable condition quickly. This service can significantly reduce losses from returns and provide additional revenue streams.

Repackaging services

Professional repackaging services ensure returned items that pass inspection can be efficiently restored to inventory. This includes replacing damaged packaging, adding new tags, and ensuring items meet all quality standards.

Secondary market management

Some 3PLs have developed expertise in managing the disposition of items that cannot be returned to primary inventory. This might include selling through outlet channels, liquidators, or recycling partners.

Sustainability initiatives

With growing focus on environmental responsibility, many 3PLs are implementing sustainable returns practices. This includes minimizing packaging waste, optimizing transportation routes, and finding environmentally friendly disposition options for unsellable items.

ROI of investing in returns management

Investing in returns management capabilities delivers measurable returns:

Labor cost reduction

Automated returns processing systems can reduce labor costs by 25-30% compared to manual processes. Logiwa’s mobile scanning and processing capabilities, for instance, significantly reduce the time required to process each return.

Improved inventory accuracy

Real-time inventory management and automated reconciliation can improve inventory accuracy by up to 99%, reducing costly errors and improving client satisfaction.

Faster processing times

Advanced returns management systems can reduce processing times by 40-50%, enabling faster refunds to customers and quicker return-to-stock times for sellable items.

Enhanced client satisfaction

Efficient returns processing leads to higher client satisfaction and retention. Many 3PLs report significant improvements in client satisfaction scores after implementing comprehensive returns management solutions.

Best practices for returns implementation

Successfully implementing an effective returns management operation requires attention to several key areas:

Staff training

Comprehensive training programs ensure staff understand both the technical aspects of returns processing and the importance of accuracy and efficiency. Regular refresher training helps maintain high performance standards.

Process documentation

Detailed documentation of all returns processes helps maintain consistency and provides a foundation for continuous improvement. This should include standard operating procedures, quality control checkpoints, and troubleshooting guides.

Performance metrics and KPIs

Key metrics to track include:

• Returns processing time
• Accuracy rates
• Inventory reconciliation accuracy
• Customer satisfaction scores
• Cost per return processed

Continuous improvement strategies

Regular analysis of returns data can identify opportunities for process improvement. This might include adjusting workflow patterns, updating technology solutions, or modifying staffing levels to match return volume patterns.

Logiwa IO helps turn returns management into an advantage

In today’s ecommerce landscape, efficient returns management is no longer optional for 3PLs—it’s a crucial capability that can determine success or failure. By streamlining returns management processes, supported by advanced technology solutions like Logiwa IO, 3PLs can turn returns management from a necessary evil into a competitive advantage.

The investment in proper returns management infrastructure, including technology, training, and processes, pays dividends through improved operational efficiency, enhanced client satisfaction, and increased profitability. As ecommerce continues to grow and evolve, the importance of effective returns management will only increase, making it essential for 3PLs to develop and maintain strong capabilities in this area.

Schedule a call with one of Logiwa’s fulfillment specialists to learn more about how Logiwa IO can help you to fulfill brilliantly.
 

FAQs about returns management