PRODUCT RETURNS PROCESSING: AN EXAMINATION OF PRACTICES OF MANUFACTURERS, WHOLESALERS/DISTRIBUTORS, AND RETAILERS

Abstract

Few research studies have published specific empirical data regarding the reverse logistics practices of companies. This multi‐stage study employed interviews, site visits, and a mail survey to collect responses from 230 members of the Warehousing Education and Research Council (WERC) regarding their reverse logistics practices. Results suggest that in spite of the growing importance of reverse logistics, few executives have product return processing as their primary responsibility and often undertake this activity along with other job responsibilities. Most firms handle the product returns process themselves and typically within the same facilities that handle forward logistics. Returning items directly to stock, repackaging and returning to stock, and selling as scrap, were the three top disposition options employed by firms. Results indicate that, contrary to general understanding, the majority of retailers and wholesalers reported a recovery rate of over 75% of product cost. Several hypotheses developed from the published literature on reverse logistics were tested. In many instances, these hypotheses were formulated on anecdotal information or single case studies and had not been empirically tested prior to this research being conducted.