The Post-Holiday Rush: Best Practices for Returns Processing at Distribution Centers

Just when you think you can pause for a breath after the holiday retail rush, here it comes: The flood of returned gifts, testing the limits of your returns processing system.

Many warehouse professionals worry about the post-holiday returns peak more than the outbound rush itself. After all, you control SKU placement, picking waves, and packing procedures when you fill an order. When those items come back, it's much harder to stay organized.

Then there's the necessary chaos of a busy returns area. Cartons of all sizes — containing SKUs of all descriptions — have to be torn open, sorted, and evaluated before being staged for movement. It's a logistical nightmare.

But it's also necessary. And it's imminent. Here are a few ways warehouse managers can prepare for the coming deluge of retail returns:

1. Provide return shipping labels on all outgoing parcels.

If you have control over packaging, you might even design it to be simple for consumers to repackage for return. The easier you make it for consumers to return items properly, the fewer losses you'll have.

2. Plan to keep seasonal hires on for some time after the holidays.

The complexity of the returns process requires human workers. This is a process we still can't automate away. Make sure you keep enough staff on hand to identify, separate, sort, and palletize those returns without lengthy delays.

3. Organize your returns area ahead of time.

Clearly mark staging zones for returned SKUs based on designation. Pack returns directly onto pallets so that forklifts can easily pick them up and take them wherever they're headed — to warehouse shelves, the original manufacturer, a refurbishing facility, or just to the recycling center.

4. Create more space within your returns area.

Increased throughput in the returns area might demand extra space to work with. Create efficient workstations with a minimal footprint by adding a few Shipping/Receiving Desks from Solus Group. Not only will they provide plenty of space for any number of returns, but they offer ergonomic benefits that can keep your staff safe while they work through the increased post-holiday load.

5. Plan for more forklift traffic to and from the returns area.

Most returns are still saleable. Make sure you don't end up short on outgoing orders while a perfectly good item is stranded in the returns area. Plan to keep a steady line of movement from the returns area to general storage, so that the moment a pallet gets loaded, it can head back into the aisles.

A little planning can save hours of staff time in the weeks and months after the holidays. Nearly a full quarter of a retailer's returns come in after the holidays, according to numbers from the National Retail Federation.

But implementing these changes may well prove useful beyond the typical holiday returns season, as well. Driven by e-commerce buying habits, returns are on the rise year-round. The average retailer loses 8.1 percent of their total yearly sales in reverse logistics spending. That number is worthy of attention, during the holidays and beyond.

References:

Moore, Tobin. “Reverse Logistics: The Biggest Retail Problem Technology Has Yet To Solve.” MultiChannelMerchant. Access Intelligence, LLC, 27 Jan. 2016. Web. 4 Nov. 2016.

Parvenov, Alex. “Reverse Logistics: Best Practices in Warehouse Returns.” SCDigest. Supply Chain Digest, 7 Sept. 2006. Web. 4 Nov. 2016.

Terry, Lisa. “Managing Retail Returns: The Good, the Bad, and the Ugly.” InboundLogistics. Thomas Publishing Company, Feb. 2014. Web. 4 Nov. 2016.