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January 8, 2001

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Shippers Find That Reverse Logistics Add Up

By Cheryl Rosen

hipping companies and the U.S. Postal Service see dollar signs when it comes to reverse logistics--and they're teaming with retailers to make it easier for customers to return items.

United Parcel Service Inc. launched Electronic Returns last year. Customers visit UPS's Web site or the retailer's site to print out bar-coded labels. They can then drop off the returns at any UPS drop point or facility.

Buy.com Inc. is testing the service, which has cut one part of the return cycle time from several days to just a few minutes, says Travis Fagan, Buy.com's VP of customer support. Previously, Buy.com customers had to call and request a return shipping label, which was mailed; now, they can just print one. The service has been handling about two-thirds of Buy.com's holiday returns, says VP of operations Tom Wright, who expects to see holiday returns coming in through February. "If we're not taking [toll-free] calls that cost $6 or $8 each and returns are being processed in two or three days, it has to be more efficient," Wright says.

A similar program from Federal Express, FedEx NetReturn, lets consumers print out return labels at home and drop off packages at any FedEx location. About 150 companies use the service.

The U.S. Postal Service offers a similar service, which is used by Returns Online Inc. to handle returns for retailers. The postal service gives Returns Online its own ZIP code to speed delivery times. Customers can return goods to any mailbox or post office using a bar-coded label they print out at Returns Online's Web site. "The more people purchase over the Internet," says Shannon Hauser, Returns Online's chairman and CEO, "the more the problem of returns will come up."