Return Exchange scales up for reverse logistics market with NewRoads deal

The Return Exchange’s recently-announced designation of NewRoads Inc. as exclusive provider of returns processing in its end-to-end reverse logistics services for retailers signals that it’s scaling up for growth as retailers increasingly turn to third-party specialists to bring down the cost of returns.

“The Return Exchange has partnered with NewRoads to do the physical handling of returned products,” says Mark Hilinksi, vice president of marketing and strategic alliances at The Return Exchange. Hilinksi says his company’s end-to-end solution splits the handling of returns into three parts starting with data collection about returns on the front end and ending with disposition on the back end. “The middle piece is the physical transfer and handling of returns. We’ve always partnered on that, and this relationship with NewRoads as the exclusive provider of that piece will help us in our growth and scalability for customers,” he says.

The Return Exchange’s data collection at the front end focuses on information such as the velocity of returns and the type of products sent back. It also compiles data on which individual customers are making the returns to reveal patterns. “It’s one thing to understand what products are being returned and why; it’s another to understand which customers are making the return,” says Hilinski. The goal of data collection is to identify steps the retailer can take to reduce the returns rate, lower the percentage of fraudulent returns, and recoup more of the cost of goods returned.

Hilinksi says he’s seen little demand for technology to catch and prevent fraud in returns from direct to consumer sales including online sales to date; most of that effort is focused on in-store returns. But e-retailers are looking to reduce offline cost in the physical handling of returns, and increase what they recoup on the returned goods’ value, he adds. Depending on the product category, retailers may now recover as little as 10 cents on the dollar on the cost of goods returned to them.

“We’ve been able to turn that around significantly, cover our costs, take part of the savings for our fee and still turn back upwards of double that in ROI for our retailers,” says Hilinski. “We’ve made the asset and infrastructure investment for the most efficient handling of the physical products and for expediting their release into the secondary market, getting a higher percentage of cost recovery in a quicker amount of time.”