Today, returns are yet another growing logistical challenge for businesses to navigate and traditionally, they’re viewed kind of like another mouth to feed and just another expense to the balance sheet. So, the natural pressures of reverse logistics necessitate an efficient workflow to liquidate returns for whatever you can get, and hopefully exceed the cost of your returns operations.
But when it comes to electronics, returns are a whole other animal. So many devices now contain data, and as soon as that device is plugged in, it connects to the Wi-Fi and when someone logs in to a service, BANG – it’s likely there is data on that device. And with GDPR and other privacy regulations around the world, that streaming TV stick now becomes a data breach risk that could torpedo your brand reputation.
And then there is the issue of batteries in everything. When shipped new, you control the safety of the battery with protective packaging that is removed by the user when they unbox that device. But now they are returning it without that little protective plastic strip between the battery and the contacts of the device and BANG - you have a fire risk to think about.
When it comes to reverse logistics, electronics are much more complicated than clothing or housewares, especially with the added regulations of transboundary movements of e-waste. These regulations really complicate your workflows to take back the electronic products that you sold. And yet, you must make it easy and convenient for the customer while staying safe and legally compliant.
Oh, and by the way, your corporation is now adding ESG reporting to your workflow that requires the reduction of carbon in your reverse supply chain.
So how do you manage all these complex issues with electronics returns? Well, it is going to require ReThinking the equation, because as we’ve shown, it can’t just be about profit. It can’t just be about liquidating returns as quickly and efficiently as possible. It must consider profit, people, and the planet in balance to meet your company's financial goals as well as its social and environmental objectives. And it must do so while minimizing the risks of data breaches, legal non-compliances, pollution, carbon impacts, and safety, of which any failure could significantly damage the brand equity your organization works so hard to build.
Balancing all of these factors is what moves your returns to Sustainable Returns. Ensuring that a perfectly good product’s potential isn’t wasted in the name of efficiency makes your returns sustainable. Making sure the next customer receives a “like new” device and has the full experience they expect from your brand makes your returns sustainable. Guarding against a potential data breach from a returned device makes your returns sustainable. Not only do you need to think differently about returns, but you need to make sure your 3PSP’s (3rd party service providers) practice Sustainable Returns as well, because they also play a big part in achieving a positive or negative outcome, but at the end of the day, it’s your brand reputation that’s on the line, not theirs.
Let’s play this out...
You have a batch of returned items that you need to deal with. The most efficient way to process them and get some money back on the books is to liquidate them to the highest bidder.
In that batch are some sealed box electronics that you know will fetch a high return and present no risk to your brand or your bottom line. But what about those boxes that were opened? Did a customer take one look, decide the color wasn’t for them and send it back for a refund? Or did they power it on, connect their email, their Spotify, or Netflix accounts and return it with some personal data on it? Did they drop it in the bathtub and return it as defective? That phone or laptop might look brand new, but how do you know? A visual inspection simply isn’t enough to make for Sustainable Returns.
If these devices get liquidated, maybe you’ll work with a partner who will test all the devices to ensure they are in good working order, maybe any necessary repairs will be made and maybe any data will get sanitized. Maybe that product will deliver your brand promise to the next user, or maybe it won’t.
Maybe, to be safe, the questionable devices will simply get recycled, but all the potential use of that brand new product and all of its carbon footprint will be totally wasted.
Maybe doesn’t guarantee legal compliance, nor does it consistently deliver on your brand promise. Maybe doesn’t support your organizational ESG or sustainability goals. And maybe doesn’t bridge the digital divide or reduce your carbon footprint, all of which means maybe isn’t sustainable as a strategy for your returns.
In the end, practicing Sustainable Returns with electronics requires looking at the equation differently. Instead of simply trying to offset cost and focus on the bottom line only, Sustainable Returns adds people and the planet into the mix, incorporating the positive or negative environmental and social impacts from returns, and the opportunities to align with organizational ESG and sustainability goals, which drives different, more sustainable decision making in your reverse logistics plan.
It’s time to ReThink returns and make sure you are practicing Sustainable Returns.