Returning to the Warehouse

Everyone is anxious to return to some form of “normal” at their jobs. When employees return, most business owners will have new policies in place that are designed to keep everyone safe and healthy. These policies will require the cooperation of every employee and the empathy of every manager. While many of these policies will be associated with social distancing and disinfecting, there may also be new ways your company will do business. Now is a good time to evaluate your business return policy.

You can bet that customers will be asking for money back, payment extensions or debt forgiveness. They will want to return product that has been out of the store and warehouse for months, or make good on a service that was cancelled due to the stay-at-home rule. Be sure your employees have answers and understand any policy changes. Here are a few areas that can affect your warehouse profitability and logistics, whether your customer is commercial, professional or consumer:

• Timing of return – If your warehouse services consumers directly, be prepared for calls about how to return an item whose return window may have passed – whether it’s a washing machine or an online clothing purchase. Consider how much leeway the warehouse can provide. If your normal return policy is within 60 days, you may need to be flexible enough to take product back that was purchased 60 days before the start of the shut-down – in early January. Regardless of your decision, be sure to communicate it to anyone who is on the front lines with customers.
• Method of refund – What will be the most profitable way for you to receive the merchandise back into the warehouse? In other words, how can you lose the least amount of money on a returned item? If you pay fees to use credit cards, you may not want to refund directly back to the card. If the customer paid by check, it may be most efficient to refund by check. Consider setting up an electronic transfer system, even if you haven’t used one in the past.
• Shipping fees – Who pays return shipping? If your normal course of business is to pay for return shipping, you may want to stick with it. Or, if it’s out of the return window of time, you may want to have the customer take responsibility for shipping. Do recommend carriers that you know are economical and efficient.
• Restocking fees – Inform customers of restocking fees. Your bottom line is hit for every returned product. If your warehouse doesn’t normally charge a restocking fee, now may be a good time to start. Or, if you do charge a fee, this may be a good negotiating point for you in a return request. Products that are oversized, awkward or need special packaging or handling are easy to explain for restocking fees. But what about smaller items? If they need to be touched by multiple people in the warehouse chain — the shipping dock, the inventory manager, the department manager and the picking person, you’re paying for those employees to re-inventory the returned item. Despite customer objections, these fees are imperative to keep your business healthy.
• Corporate clients – Use the art of negotiation with corporate clients who want to return major items. Because you want to continue a long-term relationship with these businesses, you can offer to credit their next purchase, give them a partial refund or refer them to someone who can use what they have. Try not to bring the products back into the warehouse, using valuable human hours.
• Product Distributors – Again, the art of negotiation works well here. Distributors may have other clients who can use the product instead of them returning it to you. There may be another customer that you service direct to whom the merchandise can be sent. Brainstorm ideas with the distributors – you’re on the same team to solve a logistics challenge.