An interesting new study by Accenture looking at the rising return rates in the consumer electronics business. They estimate that returns are costing retailers and manufacturers $17 billion this year (up 21% since 2007). Included in that are costs associated with “receiving, assessing, repairing, reboxing, restocking and reselling returned products,” Accenture reports. Product return rates over the past three to five years have increased for 57% of the retailers and 43% of the manufacturers surveyed by Accenture.

Interestingly, Accenture notes that just 5% of returns are related to actual product defects. They determined that 27% of returns reflect “buyer’s remorse” and 68% of returns are characterized as “No Trouble Found.” Accenture calculates that just a 1% reduction in the number of “No Trouble Found” cases could save a typical large manufacturer about $21 million in return and repair costs or $16 million for an average consumer electronics retailer.

While Accenture makes some recommendations about how retailers and manufacturers can work to lower this return rate through consumer education and assistance programs, I think they miss the lowest hanging fruit. Utilizing a Liquidation Sales Management solution like B-Stock’s could net substantially higher resale values on those returns, swamping the other costs mentioned above. To do this requires little to no additional overhead, simply a shift in how liquidation electronics sales are managed. Any company wanting to implement wholesale lots electronics solution could have it up and running in a matter of a few weeks.

Companies should look at their secondary market volume and ask themselves if a 30%-50% increase in that revenue (with virtually no incremental expenses) is worth spending a few hours on.

Here is a link to Edward C. Baig’s USA Today article on the Accenture study.

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