Reverse Logistics
Also known as: Returns Management, Return Logistics, Aftermarket Logistics
Definition
Reverse logistics handles the backward flow of products—from consumer back to origin. It includes returns processing, repairs, refurbishment, recycling, and disposal. For e-commerce, it’s primarily about managing customer returns efficiently.
Reverse Logistics Activities
- Customer returns processing
- Product refurbishment
- Warranty repairs
- Recycling and disposal
- Unsold inventory returns
- Packaging reclamation
The Returns Process
- Customer initiates return
- Return label generated
- Package shipped back
- Item received and inspected
- Refund/exchange processed
- Item restocked, refurbished, or disposed
Reverse Logistics Costs
Returns typically cost 2-3x forward shipping:
- Return shipping label
- Inspection labor
- Repackaging
- Restocking
- Value loss (if not resellable)
Reducing Reverse Logistics Costs
- Accurate product descriptions
- Quality product photos
- Size guides and fit tools
- Durable packaging
- Quality control
- Consider “keep it” for low-value items
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