Holiday returns are a lot like the Grinch – out to steal your Christmas cheer.

As we alerted TWICE readers in a similar column two years ago, CE returns are particularly inevitable after December 25, when typically 20 percent of tech purchases come back.

But with return rates likely to rise even higher due to the increase in online spending, and mounting consumer expectations of free and easy returns, TWICE believes the message bears repeating.

Fickle buyer behavior (or the challenge of figuring out how to operate the new device) will also play a role this holiday season: of all CE returns, 68 percent are labeled as “no trouble found,” while 27 percent are associated with buyer’s remorse.

Though much of the returned merchandise will be in functionally and cosmetically perfect condition, putting it back on store shelves is logistically inefficient. In the case of CE e-commerce returns, it costs twice the amount for an item to be returned and processed as it does to sell it. In most cases – especially with open box, used, defective, or damaged items – it’s better to mark this “risk inventory” for the secondary market and recover as much as you can. Here is where having a proper secondary channel solution in place can make a major difference to the bottom line.

Most likely you already have a process in place for disposing your merchandise slated for the secondary market (post- holiday and all year long). If that process includes selling to one or two liquidators or wholesalers you may want to rethink your re-marketing strategy. Start by asking yourself:

Do you reap the benefits or does your customer? Make sure you aren’t relying on a solution that creates apparent efficiency by making inventory disappear quickly, but only at the huge cost of getting much less for it than you otherwise could.

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Does it provide the control you want? It’s important to retain control over who is able to buy your excess inventory and how your brand enters the secondary market.

Are you building a strategic advantage for your company? While excess inventory might have little value inside your company, it has substantial value to others outside of your business. By getting smart about the secondary market for your products through robust data and analysis you’ll create a strategic advantage.

Is the solution adequately flexible? The one constant in business is change; this includes priorities and goals with respect to liquidation. Make sure your solution is flexible enough to accommodate changing needs.

Is the solution compliant with public company filing requirements? Public companies have stringent compliance requirements that are often not met by traditional liquidation methods.

Rather than treating liquidation as a reactive event, think about approaching it as a long-term strategic asset, in the form of a solution that is automated, sustainable and scalable depending on your needs. For example, the solution should be able to handle an uptick in returned inventory (like the months following the holidays) without sacrificing the recovery or velocity with which it is sold.

Taking a look at some of the new approaches being used by other multi-channel consumer electronics retailers, big-box stores and gaming companies can also provide clarity and direction. Many are opting to build customized, private liquidation websites; others are leveraging multi-seller b-to-b liquidation marketplaces. These platforms connect the retailer’s returned inventory directly to thousands of business buyers, pushing prices up; they also automate the process, ensuring a faster sales cycle and proprietary market intelligence in the form of real data on market prices.

Let’s be honest, unless you have a zero-returns policy – which in today’s retail environment is unlikely – there is no hiding from holiday returns. By facing them head on and applying fresh thinking to the re-marketing process your returns can become a strategic asset rather than a dreaded post-holiday afterthought.

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Howard Rosenberg
Howard Rosenberg is CEO and co-founder of B-Stock Solutions, a technology-enabled service company powering the largest network of private-label B2B liquidation marketplaces. Hundreds of retailers, including nine of the top 10 in the U.S., are leveraging B-Stock’s technology and service offerings to sell billions of dollars in consumer returned and excess inventory. For more information please visit bstock.com.