Thanks to great efforts on the part of supply houses, customers have become accustomed to getting almost all the items they want, in the ordered quantities, at the right prices and when needed.
Now, many customers expect to quickly receive credit or a refund for their returns, especially when the return is not the result of customer error. Here are some recommendations for effectively handling returns — the resolution of which will always take a backseat to filling orders and receiving in/putting away purchased items.
Not too far from the receiving area, set up shelves and/or racks to only be used for storing customer returns (including items for which a customer refused delivery) and temporary storage. One or more of these shelving units would be used for storing: uninspected returns; inspected, salable items; items that must be inspected by a factory or manufacturer’s rep; inspected returns that can be returned to vendors; and inspected items that are to be scrapped.
Determine the quantity and purpose of each category of shelving from the recent history of returns. Label each bay/shelf as to its purpose (e.g., inspected items, to be scrapped) and label each shelf and perhaps each slot with a unique storage location ID.
Most distributors “require” returns include a distributor-issued returned merchandise authorization number and sometimes a printed RMA form. But items will be returned without an RMA number or form so print some blank returns information forms. Give several to each driver and keep several in the receiving area.
As returns are received in and before the customer or truck driver leaves, those doing the receiving should determine if an RMA form accompanies the return. If not, fill in a returns information form, including if possible, the reason for each return and use that data to try to prevent future returns due to distributor fault. If there is an RMA form, use it to record the reason for the return.
Next, the newly received items should be placed in the dedicated returns shelving and not on the floor. Each item’s location should be recorded on either the RMA or returns information form. Data from each completed form should be entered into the computer system throughout the day but no later than the next day.
Time permitting, for items in each stage (i.e., storage location), print a list sequenced by the date of data capture for that stage so earlier receipts can be addressed first. The first goal should be to use the list to make a decision for every item in the uninspected storage area(s) and do so within 48 hours of receipt.
For each decision, move the item to the appropriate shelf. Effective customer service requires each return be tracked at each stage so it does not “fall between the cracks.” The result of each decision should be recorded on a returns information form and that data used to update information in the system.
The second goal is to grant credit (or a refund) for items that are salable, that can be returned to vendors and that are to be scrapped but were not damaged by the customer returning them. These items can be identified by information in the system based on the storage location(s). For items that must be inspected by a factory or manufacturer’s rep, be sure to let the customers know credit cannot be given until that inspection occurs, which could take a few weeks. Inform reps that inspections are needed and keep track of contact with reps so it doesn’t take too long for an inspection to occur.
When items are returned to stock or to vendors or are scrapped, use an inventory adjustments form to record the old and new storage locations for each item moved or to record the old location for those returned or scrapped.
After each inspection by a rep, again use a returns information form to record the resolution for each item and customer. Then either grant or deny credit, but in either case let the customer know what happened. If credit is denied, explain why. Finally, when the items are moved use a form to record each old and new storage location.
If this seems like a lot of work for no money, it is. It’s a money loser. To reduce mistakes made by distributor personnel, carefully examine warehouse organization, management and operations (e.g., receiving, put-away, truck loading). For operations, look at procedures, controls, forms, user skills and use of related ERP system features.
Try to identify root causes of the mistakes, and define changes that would prevent most mistakes. Experience has shown that many mistake-prevention warehouse changes can be done quickly and at little or no cost.??