Commentary
Trunk Time
- by Seana Mulcahy , January 12, 2004
Come on, be truthful; I know you got something terrible... a tacky sweater from an old aunt, a novelty neck tie from your brother... fess up.
Some of you might be nodding your heads at this one. I am the worst at remembering to do returns. However, I have a best friend that could teach a class in it. She insists that I place anything that needs to be returned in a bag in my trunk.
When I started researching, I learned a new phrase. Reverse logistics provider Newgistics, Inc. has dubbed the hidden cost of product returns "trunk time." I guess my friend was onto something.
According to Doug Kern, president of product management, trunk time is the time between when a customer decides to return an order and the time it finally gets shipped back, riding around in the customer's car trunk until a stop at the Post Office or other shipping facility is convenient.
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Other results from an analysis of 200,000 product returns found that:
- The items return to inventory faster, which could preclude having to order additional merchandise to fill orders.
- Not having to carry the financial cost of the item while it's waiting to return to inventory.
The National Retail Federation expects between 4 and 6 percent of the $217 billion worth of holiday gifts will be returned (via bricks and clicks) after the holidays.
Product returns can not only skew numbers but become a huge burden to online retailers. American Express conducted a study that found 36% of respondents said they would return holiday gifts after the holiday season.
Many researchers and eTailers say that flexible return policies can enhance sales. What we need to realize is that it can hinder sales as well. Say you received a ski jacket that didn't fit, and don't get around to returning it until a month later. When you returned it did you look around? There were no more ski jackets left. There were bathing suits prominently displayed at the front of the store. Your return costs the retailer money. The same thing goes for eTailers.
Certainly there's nothing we can do about that friend or family member that picks out the bad gift. As people who spend our lives in the digital space, we can realize these numbers, try to provide pleasant online shopping experiences (including return policies), and hope to cut down the number of returns.
How am I doing with my returns? Better, but my trunk is a bit cluttered.
