Have you ever bought a new outfit online but sent it back when it didn’t fit right? Then you have participated in the world of reverse logistics. A new Office of Inspector General white paper, Riding the Returns Wave: Reverse Logistics and the U.S. Postal Service, examines emerging trends in reverse logistics. It looks at the current package return services offered by the Postal Service and considers further opportunities created by this booming market.
As ecommerce grows, more goods are being returned than ever before. Online purchases are three times more likely to be returned than in-store purchases. In some cases, online customers are treating their bedroom like a fitting room, ordering multiple sizes and styles with the intention of returning many of their purchases. Some new companies are even using reverse shipment as a key part of their business models. For instance, RocksBox sends out jewelry for rent, after which customers send the pieces back.
Many people think that when they return an online purchase it just travels back to the same place it came from. But that is often not the case. It might get purchased by a discount retailer, go to a facility to be cleaned or repaired, or even be recycled. Reverse logistics is more complex and expensive than forward shipping.
The growing number of returns has caused logistical and cost headaches for merchants, many of whom offer free returns to attract customers. And while consumers appreciate the ability to send back their unwanted purchases for free, boxing, labeling, and mailing them can be difficult, especially since increasing numbers of Americans no longer have a home printer.
Meanwhile, many returns end up in landfills because their value in the secondary market is so low. Returns produce about five billion pounds of trash annually.
As a major shipper of return packages, the Postal Service can help reduce the cost and frustration associated with returns. With service to every address in America six days per week, the Postal Service can pick up returns from a customer’s home when they deliver mail. And their nationwide network means post offices are often closer to people’s homes than are retail stores, making them more convenient as drop-off points.
One opportunity that the Postal Service might consider is to accept loose return items from consumers and consolidate them in bulk to ship back to retailers at a lower cost. Other ideas include partnering with third-party logistics providers to offer add-on services like product evaluation, repair, or disposal.
Share your ideas with us. How can the Postal Service better handle this rapid growth in returns?