Businesses and individual consumers have always returned products for reasons ranging from item defects, wrong size or color, to simply a change of mind about the purchase. And if those transactions happened in small numbers, companies would handle returns in whatever way made sense at the time. Often there was no clearly defined process.

This somewhat haphazard approach has changed dramatically in recent years, giving rise to the field of reverse logistics. Reverse logistics is exactly what it sounds like, the sum of the activities that take place between a buyer’s receipt of a product and its return and proper disposal.

As TechTarget defines it: “reverse logic is the set of activities performed after the sale of a product to recover value and end the product’s life cycle. Typically, it involves returning a product to the manufacturer or retailer, or sending it on for servicing, refurbishment, or recycling. Reverse logistics is sometimes referred to as aftermarket supply chain, aftermarket logistics, or retrologistics.”

Today, there are third-party logistics companies (3PLs) that specialize in this discipline and technologies that are explicitly designed to make it easier. Reverse logistics software and systems are necessary because tracking, accepting, categorizing and processing returns is challenging. This also applies to determining how to maximize the value of returned goods, as many options need to be weighed – refill, recycle, refurbish, donate, sell on the secondary market, etc.

However, retailers are assisted by advanced systems – often using artificial intelligence (AI) – that can consider multiple factors to quickly and effectively determine which return channel will benefit the business the most.

Reverse logistics: More important than ever for companies

One of the main reasons reverse logistics is such a risky endeavor is that the volume of returns…