Returns management solutions provider Newgistics Inc. today introduces a new solution designed to assist companies faced with a consumer product recall.
Recent high-profile examples like the Sony laptop battery recall have drawn a significant amount of attention, but Newgistics has been working with existing clients for more than a year on how to use its existing SmartLabel technology to improve the effectiveness of consumer product recalls.
“If you can increase your effectiveness, there’s a lot less liability,” said Jonathan Dampier, vice president of marketing and strategic alliances at Newsgistics.
Generally, only 30 to 40 percent of consumer products that have been recalled end up coming back whereas automobile recalls have a 75 percent effectiveness rate, Mr. Dampier said.
Austin, TX-based Newgistics conducted a survey this summer and 3 out of 4 respondents said that would like to be able to return recalled products from home and be able to put them in the mail, he said.
Newgistics clients that are already using the solution have experienced an increase in recapture effectiveness as well as a benefit from a brand standpoint, Mr. Dampier said.
“If you handle the process in a topnotch manner, it can be positive for your brand instead of negative,” he said.
The Recall Solution enables a retailer to mail a pre-addressed, pre-paid bar-coded label to consumers that can be affixed to the return package. Alternately, consumers can go to a product recall Web site that is hosted by Newgistics but branded as if it is the retailer’s site, where they can register and download a label. Consumers can then drop off the package anywhere in the U.S. Postal Service mailstream.
Newgistics pulls the packages out of the mailstream one to two days later, scans the barcodes and sends the information to retailers. This enables retailers to communicate with consumers about their package, promptly send a replacement product and prepare their operations facilities for how much volume to expect.
“This is a good time to do some e-mail message to control any brand damage” that may have occurred because of the product recall, Mr. Dampier said.
For example, with the Sony battery recall, several retailers have taken a lead on the issue and are communicating with consumers about returning the batteries, realizing the recall is more of a brand issue for the stores than it is for Sony.
Recall Solution can be launched within a matter of days, which is important since the government waives a lot of red tape and regulations for companies that put together a recall solution within 20 days, according to Mr. Dampier.
The solution will be available to retailers with an anticipated number of returned products in the range of 5,000 to 10,000 items.