Tracking Service Aims to Ease Product Returns

A Texas company tries to take a little bit of the sting out of the biggest online retail nightmare: returns.

One of the most logistically challenging situations for any large retailer is the return. Newgistics Inc., a Texas retail service firm, this week launched a tracking service intended to alleviate some of the uncertainty involved in the process.

When it comes to returns, there are questions on both sides. The retailer might wonder: Is the product being returned because of the wrong size or color or is it an actual defect? How much do we owe the customer and how much does the supplier owe us? Do we have to readjust our revenue figures and are there often returns that we need to make a change? And how do we make the return as effortless and pleasant as possible for the customers so that we can keep them as customers?

At the same time, a customer trying to return a product purchased online faces an equally lengthy list of pain points. Does the online site have a physical storefront? Is it local? Will it accept online returns? Do I have to package the return myself? How strict are they about the original packaging? Who pays for shipping if its the retailers fault?

Newgistics has announced a package that is intended to slightly lessen some of those pains, with a focus on helping shipment and processing. Although Newgistics isnt directly addressing the most significant concerns of either side, its chipping away at what consumers have come to see as the return black hole: What happens after they mail the expensive product back to the merchant?

After the package is shipped, the consumer has no way of knowing where it is, whether its been received and whether the recipient can confirm the consumers story, such as whether the unit is defective or that the shirt labeled green is actually blue.

"Consumers do feel that its a black hole," said Patti Freeman Evans, a retail analyst for Jupiter Research. Even when the customer calls customer service, "all they can tell them is, I havent gotten it yet," Evans said. "Its better to be as transparent as possible."

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Newgistics tries to do two things: pick up and transport the package from a local post office to one of their regional processing centers; and provide a Web site for consumers where they can print out prepaid labels and arrange for their returns. The Web site allows the consumer to confirm pickup of their return and for it to be tracked along its full route, to the point where the retailer acknowledges receipt.

What the site will not initially do is confirm for the user that the package was inspected and confirm that the retailer validated—or, for that matter, contradicted—their actual claim, according to Newgistics officials. The risk is that the retailer could say that the box had something else in it when it arrived and the consumer would have no way of proving otherwise. In a physical store location, obviously, a consumer could demonstrate the problem right there and walk away with a signed receipt.

Next Page: How the return process would work.