ck the status of returned goods. All the customer has to do is call the merchant and request a return authorization. Once the shipper transmits the shipment details, the information system takes over. It even prompts the merchant to follow up when items are not picked up as scheduled.The tax, finance, and credit implications of the program is an area that may not be very visible to logistics managers, but it is one of the primary reasons upper management will support a reverse-logistics program. The act of returning goods sets off a flurry of finance-related activities, including issuing refunds and credits, accounting for inventory costs, and tracking tax liabilities.Logistics can help make those activities easier and more accurate by collecting and providing the necessary information. For example, retailers and manufacturers traditionally have clashed over the issue of credits and refunds for returned products, says Wyland. "Retailers sent back a product and deducted for what they sent back from their payments. For manufacturers, it was an annual nightmare trying to reconcile the physical product with the paperwork," he says. Now, with the proper information gathering and dissemination, manufacturers can immediately reconcile their customers' claims. There are enormous financial benefits to managing returns this way, Wyland says. "Before, manufacturers didn't know their profitability until they reconciled at the end of the year." Now, they don't have to carry unreconciled claims and they don't have to build cash reserves to cover those claims. "The net effect is a reduction in the cost of doing business," he says.The benefits of a reverse-logistics program are legion. To get the greatest payback possible, though, shippers must devote the necessary time and resources to the project.Reverse logistics, in fact, should be part of the overall business strategy for any manufacturer and retailer, says LeMirande of Redwood Systems. Companies ...
