August 28, 2003, 12:00 AM

Eye on returns

(Page 3 of 4)

Another option on ATTWS.com is to search from the home page for “Return Policy.” But that produces a list of more than 300 results. The top one is a PDF file about Blackberry handheld devices. If the shopper scrolls to page 9 on the PDF, she’ll find a returns policy for Blackberries with an indication that the policy applies to all ATTWS products.

One retailer that does a particularly good job of meeting customer expectations regarding returns, Calvin says, is HotTopic.com, a site that sells apparel and accessories to teens. Hot Topic permits returns up to 45 days from the date of purchase, and it pays shipping on returned merchandise.

Just as important, Calvin says, is that Hot Topic does a comprehensive job of spelling out its policy from a single, noticeable link from its home page. Many young shoppers will hesitate to make a purchase before knowing if and how they can return apparel that doesn’t fit, Calvin says, so Hot Topic explains what can and cannot be returned within each of its product categories.

Keep it simple

In some cases, retailers run the risk of making their return policies too complicated, Calvin adds. While Wal-Mart offers free shipping on returns as well as in-store returns of items bought online, its fine print notes that it won’t accept in-store returns of computer hardware or other large items ordered online. And Target.Direct, one of the top 10 in number of visits and the umbrella web site for Target Corp.’s Target, Marshall Field’s and Mervyn’s, lists several differences in its returns policies for each brand. Products ordered online from Target.com can be returned to a Target store, but products ordered online from Marshall Field’s cannot be returned to a Marshall Field’s store. There is no store returns policy stated for online orders of Mervyn’s products.

The Target.Direct site, which is operated by Amazon, also includes a clarification that Amazon products purchased after linking from Target.Direct can only be returned to Amazon.

Retailers like ToysRUs.com, Target.com and MarshallFields.com, however, can confuse customers with multiple returns polices for products purchased through Amazon.com, Calvin says, citing the results of studies she and other analysts have done. “Consumers don’t have a clue that if they buy from one of these retailers through Amazon.com they can’t return products to a store,” she says.

Shoppers of major retail brands often don’t check out returns policies before purchasing because of their familiarity and trust associated with particular brands, Calvin adds. But this runs the risk that shoppers will be disappointed when it comes time to return a product and they realize that they can return it only to Amazon’s warehouse, which may offer a shorter window to make returns. For example, Amazon offers a 30-day policy instead of the 90 days offered directly by Target when shoppers purchase from Target.com instead of through Amazon.com.

Reverse logistics visibility

In addition to affecting customer relationships, a returns system can make a big difference in retailers’ ability to quickly get returned products back onto the market, experts say. With new systems that provide visibility into the returns process, also known as reverse logistics, retailers can be in a better position to redirect a return to a particular warehouse or store or to fulfill a new online order.

“The typical approach is to send a return back to a warehouse picking area, but if you have visibility and automation built into your returns process, you could send the return directly to shipping for the next order,” says Dave Gealy, logistics system consultant for Forte Industries, a provider of reverse logistics software.

“The returns process in the direct business is very complicated,” adds Ray Greer, CEO of Newgistics Inc. “You have to integrate the physical movement of packages with information related to that package, because you really can’t solve the problem of returns without having both.”

Newgistics has partnered with R.R. Donnelley and USF Processing to produce a SmartLabel program, under which a barcoded, pre-addressed shipping label arrives with an order. To make a return, a shopper attaches the label to the original package and drops it at any U.S. Postal Service location. Within two days, Newgistics will receive the package at one of its distribution centers, where it will scan the SmartLabel and e-mail an alert to the retailer about what’s on the way back. Spiegel Group Inc., J. Crew Group Inc., Neiman Marcus Group Inc. and Aerogroup International Inc.’s Aerosole brand are all using the SmartLabel product.

“The returns process begins at the point where a product is picked, packed and shipped, not at the point where the consumer sends it back,” Greer says.

At Home Shopping Network Inc.’s HSN.com, a return processing software system from Optum Inc. automates many of the decisions faced by warehouse workers in the receiving of returned items. Instead of having an hourly dock worker decide how to process a returned item, the Optum system is set up with a retailer’s pre-set parameters on how to handle different types of products, depending on their value and condition, says John Davies, vice president and co-founder of Optum.

Just like bricks and mortar

When an HSN dock worker checks in a returned item, he keys in its basic product information and return authorization number to an application that sits on the corporate intranet. The application, accessible with a browser on a desktop or handheld computer, flashes instructions on where the product should be forwarded, such as to a distribution center or to a liquidator.

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