As we round out 2021, the bar for retailers is set quite high. It’s now do or die when it comes to developing and keeping customer-friendly policies. One key aspect of this expectation is the returns process. World-class product returns management is quite difficult to execute. It’s quite an expense for businesses looking to stay in the good graces of very demanding consumers.

E-commerce and online shopping is more popular than ever and customers have come to expect free and unlimited returns on the items they purchase. With an estimated 30% of all online purchases returned, retailers should expect to spend plenty of resources handling all this merchandise.

Read on to learn more about why exactly returns are so inefficient for retailers and what they can do to relieve this business burden.

The Pandemic’s Role in Returns

Over the pandemic, the popularity of eCommerce spiked and consumers turned to online shopping for any type of item you can think of.

For example, electronics and home goods were always popular items to buy on the internet. Those trends certainly continued. Online stores have now also become the go-to for items like furniture, appliances, apparel, and groceries. Interestingly, these are things which people might usually prefer to see in person before deciding to buy. With the closures and distancing requirements that have been enforced on and off over the last year and a half, this wasn’t an option for many. Businesses developed new practices or improved existing ones to keep customers buying. In this new environment, generous return policies have become absolutely critical.

And although all returns are ultimately grouped together, there are many reasons why a customer might ship an item back

Why Do People Return Purchases?

Often, a customer will open an item and begin to use it before deciding that it doesn’t quite fit their needs.

It’s possible that the quality isn’t up to their standards or that the item doesn’t work as promised. There are also sizing mistakes—whether they’ve bought shoes, a microwave oven, or even a piece of hardware, sometimes the things they buy sight unseen simply don’t fit them or the desired application.

It’s also possible their issue with the piece is strictly based on taste. Perhaps an item of clothing doesn’t flatter them as they had hoped, or some home decor doesn’t quite work with their favorite accent piece in the room they’re designing.

The item could have been a gift that the recipient already has or simply doesn’t like. This might occur most often around the holidays, but is certainly a possibility any time of the year.

Maybe a customer purchased an item to use at a certain event, but it didn’t arrive on time rendering it useless to them. Finally, the purchase itself may have been a misclick—a simple mistake.

With consumers citing many different reasons, one thing remains true about customer returns: they are a big expense to businesses.

Why Product Returns Management Cost Retailers So Much

As you can see, customer returns aren’t necessarily a matter of fault. This is why minimizing returns is especially difficult. But even though the items we get sometimes aren’t as expected, this certainly doesn’t mean that they wouldn’t be useful to someone else. Unfortunately, reselling thousands or even millions of these items can be a major logistical and financial challenge for retailers.

Here are some of the general steps that retailers have to go through to properly remarket returns.

Receiving and Inspecting

Products come back to retailers in all sorts of conditions. Some may be literally untouched, while others may be lightly used. Some can even be broken—maybe or maybe not the customer’s doing.

If you expect a returned product to be desirable to anyone else, you’re going to have to ensure it’s presentable and usable, or at least be able to accurately describe the condition. This means that you need to inspect each sweater, computer, lawn chair, or whatever else you’ve received. Whether you have workers verifying the condition of these items or you have more sophisticated or automated ways of doing so, this process takes time and resources.

Say that a customer mistakenly ordered an item or needed it for a specific event, but it arrived too late. In these cases, they’ll often send it right back without so much as opening the box it shipped in. The good part is you know the packaging is intact and the product unused. The bad? You certainly won’t be able to store the item in that bulky shipping box. At the very least, you’ll be paying people or building a system to receive and open and sort the returns you receive.

Repackaging for Presentation

There’s a decent chance that if you’re getting something back, then the packaging has been opened and damaged. The next person to purchase that item certainly won’t appreciate getting a torn box, crushed or severed tags, or a clamshell packaging that has been cut open. Even if the item is virtually unused, consumers expect the goods they buy to be presented a certain way. They may doubt the quality of the item or your store’s commitment to customer service if they see packaging in rough condition. Repackaging may be your only option if you want to sell these items on your own shelves again.

And what if you’re planning on reselling out of the package at an outlet or to a liquidator? At the very least, people or automated methods will still have to open and discard all that old packaging.

Tracking With Inventory Management Tools

Stores used to keep inventories manually, either in simple spreadsheets or even by hand. Today all but the very smallest operations will have an inventory management system that track products for financial, logistical, and forecasting purposes.

Even if a return is in pristine, untouched condition—packaging and all—you can’t simply place it back on the shelf. You’ll have to make sure it’s accounted for within whatever inventory or product returns management system you have in place. Modern software, barcodes and QR codes, RFID tags, and scanners help with this process. But again, it takes time and investment in human staff or other automated means to accomplish this.

Reshelving and Rebinning

Do you represent a brick-and-mortar retail space where you place items on display for people to browse? Or an online store with a warehouse full of products in bins? Perhaps a hybrid or something in between? In any case, this step is inescapable if you insist on remarketing returns.

You’ll need to place returned items back in their correct shelf or bin with a high degree of accuracy. This ensures shoppers have a nice time browsing your aisles and that online buyers aren’t mistakenly receiving the wrong items.

If your business processes returns centrally, there is an additional transportation aspect to remarketing them. You’ll have to pack trucks with returned goods and send them to their destinations—all on the company dime.

Again, all of this takes capital—be it human or technological—that you might not have.

Tough Times for Workers, Tough Times for Retailers

Businesses certainly never loved the many steps of this drawn-out process, but may have at least been able to afford them. But between the looming holidays, the post-holiday return rush, and the supply chain issues and labor shortages plaguing retailers across the US, all these steps may no longer be viable.

There are over 500,000 open jobs in warehousing and shipping. The trucking industry reports a shortage of 80,000 drivers. If your business is one of the countless organizations grappling with these challenges, you’re no doubt under pressure to remain on track and profitable with fewer resources on hand than ever before.

The Secondary Market: Your Product Returns Management Solution

Instead of handling all the steps above or trying to minimize returns, retailers should explore alternative options. The best one is the secondary market.

Countless entrepreneurs and small businesses around the world want to buy brand name merchandise and resell it for a profit. Since their livelihoods are built on buying surplus and unsold merchandise, they are willing and well prepared to take on your returns. This saves you some of the painstaking and expensive steps outlined above.

Their customers don’t necessarily expect the same presentation as yours do. Neither will they demand the same level of customer service from you. All that responsibility transfers to the secondary market buyer. This means that in selling all sorts of returned and excess stock to them, you’ve completely washed your hands of problematic inventory, recovered cash quickly, and freed up space and workers to support your core business—selling the latest premium goods to consumers.

B-Stock: the Preferred Secondary Market Solution

If you’ve ever used a traditional liquidation solution, you’re already tapping into the secondary market. But it could be even better for your business.

Liquidators bid low on your surplus and sell to small businesses—or additional rounds of middlemen. B-Stock, on the other hand, connects you directly to hundreds of thousands of small business owners. These are eager buyers that will help your goods find their way into the circular economy. At the same time, you gain recovery rates of 30% or higher compared to traditional liquidation solutions.

How? B-Stock relies on private auctions where a pool of vetted, pre-approved buyers competes over your stock driving the price up and getting you as much money as the market will allow. On top of this, you as a seller have the power to enforce terms upon buyers to ensure your goods are sold in accordance with your hard-won brand image.

If you’re interested in trading the headache of product returns management for an all-in-one solution for recovering cash and clearing merchandise fast, it’s time to give an alternative like B-Stock some serious thought.

To learn more about how B-Stock can help ease the stress and expense of product return management—whether you represent an enterprise or run a small retail operation—contact us today.

Join the largest global network of B2B liquidation marketplace

Request Demo

Editorial Team


B-Stock Editorial Team

More from the B-Stock Blog

B-Stock’s Network Effect

This short video represents the birth and development of a category in B-Stock’s B2B marketplace. This specific animation shows the consumer electronics category, but all marketplaces on the B-Stock platform have grown and thrived in a similar way. Each colored…

Dec 05 2022 · 1 min read

Taking Your Consumer Electronics Liquidation to the Next Level

In the world of online liquidation auctions, retailers and manufacturers of consumer electronics want to get top dollar for their products. But what steps can your business take to maximize recovery? After years of success in the business, B-Stock has…

Nov 18 2022 · 10 min read

Where & How to Buy Amazon Return Pallets

According to a report from Adobe Analytics, consumers are projected to spend $1 trillion online with U.S. merchants. As impressive as that number is, that doesn’t mean that everyone receives their products and lives happily ever after. From 2019 to…

Nov 18 2022 · 9 min read

Like what you see?

Subscribe to our newsletter to get the latest news from B-Stock.