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How Consumers and Retailers Can Reduce Returns

[email protected]: “Americans return about 30% of their online purchases, costing retailers billions of dollars and creating mountains of environmental waste. Gad Allon, a Wharton professor of operations, information and decisions, wants to change that. He’s working with companies and researching ways to improve the reverse supply chain. He also believes that raising consumer awareness is key to reducing the massive rate of returns. “During your holiday shopping, do your part to stem return culture by choosing carefully and aiming to buy for keeps,” Allon wrote in a syndicated editorial. He joined Wharton Business Daily on SiriusXM to talk more about the issue. The reverse supply chain is clunky because it lacks the efficiency of scale that is achieved in the forward supply chain, Allon explained. From manufacturing to distribution to the last mile, an entire system of logistics is activated when products are sold in quantity. But returns are processed one at a time. A sweater that was purchased in November and returned in January, for example, doesn’t have much value for the retailer. The item is likely to be resold at a deep loss, liquidated, or sent to a landfill for disposal…

Returns also create a hefty consequence for the environment. Allon said about 25% of returned items end up in landfills, so reducing returns will help shrink the carbon footprint created by so much waste. In addition to the toxic side effects of manufacturing, greenhouse gases are emitted from shipping back and forth…”

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