How to minimise returns and maximise value: interview with Andrew Starkey of IMRG

How to minimise returns and maximise value: interview with Andrew Starkey of IMRG

A new shirt is born: a fashion designer designs it; a manufacturer agrees to make it. Materials are sourced from all around the globe: cotton from the banks of the Nile, plastic buttons from the oilfields of Saudi.

It is shipped from the factory, stored and marketed; then sold, packaged, shipped, delivered and worn.

But then the customer decides that they don't really like it. Cornflower blue just isn't their thing. Under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, they return it within the statutory cooling off period.

So that's it: game over. A great deal of effort for nothing?

Not necessarily.

The increase in e-commerce means that handling returns is an increasingly important fact of life for retailers.

Recently, we spoke with Andrew Starkey, head of e-Logistics, IMRG. He discusses developments in this field and how retailers can minimise their losses on returns:

https://twitter.com/imrgupdate/status/496285408976986112

Is there a common way for retailers to manage returned goods to recover maximum value, such as through the contractual arrangements with their suppliers?

Retailers have a range of ways of dealing with returns.

Ideally they take them back and put them on sale again as quickly as possible and at as high a price as possible, but the process can be complex. Goods have to be quality inspected and may need some work—like laundering—before they are resold.

When they have gone through this process:

  • they may be offered for resale online or through a store or sold through a third-party even including eBay at a discounted rate
  • they could be sold to buyers in other countries—if some time has passed and they are season sensitive, this may be the best option, and
  • they could be sold to a pound shop, given to a charity or destroyed

Retailers often have an agreement with suppliers and manufacturers for the goods to be returned to them. They may, for example, have a sale or return agreement for a percentage of the total of goods sold.

To what extent are suppliers playing an active part in any reverse logistics operations?

They do play an active role, as mentioned above, through their agreements with retailers. Some retailers in fact don't even try to sell the goods again themselves but return them straight to the suppliers. Suppliers may then sell the goods again through another channel.

Are retailers using methods to minimise returns? Have the information provision requirements in regulations had a

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