The Spiegel Group expects to accelerate merchandise returns and save on costs early next year when it begins nationwide use of ReturnValet.
The service offers catalog and Internet consumers a physical location where they can return items and receive a receipt.
“We know it will save us money [because of] increased productivity, and we expect it to reduce the time it takes to get merchandise returned to us,” said Allison Scherer, Spiegel's manager of corporate public relations.
ReturnValet was introduced by Newgistics Inc., an Austin, TX-based supply chain management company. The Spiegel Group's Eddie Bauer, Spiegel and Newport News companies began a test Nov. 20 in the Los Angeles, Chicago, Atlanta, Dallas-Fort Worth and New York areas. Scherer expects the nationwide rollout in first-quarter 2002 but said it will begin “when we're satisfied that we have all the processes in place to make sure this runs smoothly.”
ReturnValet will let consumers return items two ways: they can drop off items at more than 4,000 participating mail and parcel centers nationwide or they can affix a pre-paid mailing label enclosed with the merchandise and drop it in the mail.
“No money changes hands,” Scherer said. “The shipping and handling costs of the return are deducted from the customer's credit.”
Return centers usually are within five miles of consumers' homes or offices, Newgistics said. Consumers also can find ReturnValet locations at www.returnvalet.com and at participating retailers' Web sites and toll-free numbers. Scherer said Spiegel customers outside the test areas can mail or send them via United Parcel Service. This system was used in the test areas before Nov. 20.
“ReturnValet is planned to replace the old way of doing things for us,” she said. “There were no problems with the current system. The implementation of ReturnValet is not in response to any customer feedback. Also, Eddie Bauer customers can currently return merchandise to more than 550 retail stores, and that will not change with the implementation of ReturnValet.”
The company's return rate is 20 to 25 percent, “similar to the industry average,” she said.
Scherer described how ReturnValet works.
“They aggregate the merchandise into master cartons at the mail and parcel centers,” she said. “Cartons are bar-coded, and, by using the ReturnValet software, the bar code is tied to information about the items inside. The master cartons are sent to aggregation points, where they are loaded onto trailers and delivered to our warehouse in Columbus [OH]. We also receive advance notice from Newgistics that a specific trailer is coming with a number of cartons containing certain items. We can reconcile this information with the merchandise we receive, and because much of the data about the returned items have been inputted earlier, this speeds the return process. Without ReturnValet, we don't have that information in advance.”
Consumers receive credit in two weeks on returns to Spiegel.
“How much we can speed up that part of the process is also part of the test,” Scherer said.
According to studies done for Newgistics by Arthur Andersen, retailers can save 36 percent to 50 percent of their back-end processing costs on returns through the use of ReturnValet.
Lillian Vernon and Sincerely Yours also will use the service early next year, Newgistics said.