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Written by Yitz Lieblich

How to Handle Returns

The Holidays are over. Now comes the hard part...dealing with returns.

All through the holiday season your employees were working like busy beavers. Orders were coming in, and hopefully going out at a faster rate than the norm. With a good inventory management system in place your warehouse probably stayed pretty neat and organized. All your employees are so proud of how they made it through the holiday season with few hiccups. However, now that the holiday season is behind you, you may find that another problem arises.

What to do with returns?

In 2017, 28% of gifts were returned, valued at a whopping $90 BILLION!! What happens to the returned items? Most often they end up back at your warehouse.  With so many returns, you need to have a good process in place to evaluate returns and add them back into inventory. If items are found to be in new condition and able to be resold as is, they need to be immediately scanned back into inventory and physically placed back where they belong. If items are found to be damaged or otherwise unsellable,  there needs to be a system in place for how to deal with those items. However you decide to tackle the returns, you need to choose a method and stick with it. 

Returned Inventory Uses 700 Million Square Feet

Return items are the new users of warehouse space in the United States. According to CBRE (a commercial real estate and investments firm), returned inventory takes up close to 700 million square feet annually.  How can this be? While in store shoppers are returning around 8 percent of their purchases, eCommerce shoppers are returning upwards of 30 percent! These returns can place a huge stress on you if you are not equipped to handle the reverse flow of inventory. 

Path of Returned Merchandise is Lengthy

Customers like to know that their return has been received so they can receive their refund.  You need to know that the return is back in inventory and available for sale again. The path of returned purchases is often lengthy, passing through as many as seven hands before being placed back into inventory. The longer the return remains out of inventory, the more money you will lose due to depreciation.  Consumer electronics depreciate between 4% to 8% per month, while apparel is higher at 20% to 50% per eight to sixteen week period. The faster the return is processed, the faster the item is back in inventory. With more items available in inventory, you will be able to generate more revenue and help sales soar. The point is, you want those boxes unpacked, inspected, and scanned back into inventory as quickly and efficiently as possible.

The Key is the Right Inventory Management Software

The key to all this is having the proper inventory management software. SkuNexus is the only fully customizable order/inventory/warehouse management software that is able to bend to fit your company’s unique needs. Whether you choose to deal with your returns by using a 3PL or handling it inhouse, SkuNexus is there for you!


Tis the season for gifting...and returning.  Click here to see how we can help your warehouse continue to stay organized even during the busy post-holiday return season.

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