NCOF Speaker: Use Data to Trim Costs

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GRAPEVINE, TX -- Retailers can reduce the often-hidden costs of handling returned merchandise by tracking and analyzing returns data, Chris Norek, senior partner at Chain Connectors, said yesterday at the National Conference on Operations & Fulfillment here.

U.S. companies spend about $950 billion annually on logistics. About $43 billion of that, or 4.5 percent, is spent on returns, Norek said. Too often, companies have no idea what is being returned, who is returning products or how much returns cost because they fail to track data.

The issue particularly hits online retailers and catalogers, Norek said. Studies show that 35 percent of all sales -- in terms of sales dollars -- are returned in each of the two categories, which lead all others.

Technology can help collect data and automate the returns process, reducing costs, Norek said. Most retailers have a reactive approach to returns, but data can help them proactively address problems and improve efficiency.

"Get concrete data, that's the No. 1 thing," Norek said. "Cut it, slice and do whatever else."

Another way to reduce costs is to lower the rate of returns, Norek said. Ensuring that returns policies are obeyed is the key to trimming returns rates.

"The best return is the one you didn't have to worry about," Norek said. "I think everybody can do a better job of enforcing existing policies."

Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting

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