ReverseLogix, Pitney Bowes Want to Consolidate Returns Process
Two more logistics companies are banking on a partnership to reduce escalating returns costs and streamline the process, especially as many companies still don’t know how much returns really cost them.
ReverseLogix, a provider of end-to-end returns management systems, has teamed up with global shipping and mailing company Pitney Bowes to consolidate returns processes and cut returns shipping costs.
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With the partnership, customers using the ReverseLogix returns management system (RMS) will experience cost savings on return shipments to their warehouse or facility. By accessing Pitney Bowes’ competitive shipping rates directly in the RMS platform, brands can leverage a consolidated returns service that allows consumers to return items to Pitney Bowes’ extensive network of national locations or via USPS pickups.
The network of USPS pickup services and drop-off locations offers consumers more choice when making a return, meaning they could receive a refund or credit faster.
The partnership also brands reduce waste and lower emissions. That’s because consolidated shipments trim the number of trips needed to move returned items back to the merchant. The lower emissions, combined with less packaging, can be significant metrics for organizations aiming to green their supply chains.
With the ReverseLogix RMS, Pitney Bowes will sort, process, consolidate and ship the returns to each merchant. This streamlined approach is expected to have immediate, positive impacts on the ecosystem of both companies’ customers. Through this partnership, Pitney Bowes clients can access new RMS capabilities for rapid deployment.
The combined solution would be beneficial to apparel sellers, who typically have higher return rates than other categories. According to ReverseLogix, 67 percent of third-party logistics (3PL) providers primarily process returns for apparel and textile companies, well ahead of the 44 percent that mostly deal with returns for industrial machinery.
Gaurav Saran, CEO of ReverseLogix, called the partnership “the future of returns management.”
“The cost and environmental impacts from rising return volumes are threatening to brands, consumers, and the planet,” said Saran in a statement. “With Pitney Bowes, we’re addressing our customers’ biggest concerns while showing the industry how smarter returns management can be done.”
Cutting returns costs is key in a time when many retailers are clueless about how much they cost in the first place. According to ReverseLogix’s 2023 Reverse Logistics Technology Study, 77 percent of companies surveyed by the tech provider don’t actually know how much those returns cost.
Industrywide, returns have become an $816 billion concern, according to the National Retail Federation’s (NRF) survey of 70 retailers with Appriss Retail last fall. Average return rates were just over 16 percent of purchases, flat from the year prior, with retailers incurring an average of $165 million in returns costs per $1 billion in sales.
Pitney Bowes’ weekly Boxpoll survey, which polls consumers on current events, culture and e-commerce logistics, found that online return costs for retailers average 21 percent of the order value, with several brands reporting ratios considerably higher.
“This is driven by growing return rates, increased parcel volume and higher postal costs,” said Gregg Zegras, executive vice president and president, global ecommerce at Pitney Bowes, who noted that the partnership would “unlock the best shipping rates available for ReverseLogix customers.”
The ReverseLogix study said that nearly half (49 percent) of companies who know their total cost of returns spend less than $100,000 on them annually. But the other half spends more, with 16 percent saying that they spend in between $100,000 and $500,000 per year on returns. Thirty-two percent say they spend more than $1 million per year on this business area.
In the near future, the partnership will expand to allow Pitney Bowes to take advantage of additional returns management capabilities exclusive to the ReverseLogix RMS. The companies say the capabilities can give customers deeper insights and data across the entire returns process while also protecting brands against return fraud and policy abuse.
The 136 respondents to the ReverseLogix study said they use various approaches to returns management, with 66 percent processing their own product returns and 16 percent using a 3PL partner.
Of those that process their own returns, most (52 percent) collect returns at a store, while others rely on third-party locations (21 percent), pick-up/drop-off points (25 percent) or mailing to a central processing facility (33 percent).
Fifty-nine percent of these businesses operate just one site that serves as the central returns processing facility.
