Your Green Returns Are Not Green

Hafback brings the first true green returns solution to online merchants.

By Brian Taylor

Environmentally conscious brands continue to make progressive strides towards reducing their environmental impact. They are focusing on where and how they source their product; is it sustainably made and can they move the origin point closer to reduce carbon emissions. Packaging, fulfillment, and outbound logistics are other high focus areas when brands work towards their sustainability goals.

What has been overlooked for years is what those in the industry call reverse logistics, or the path consumer returns take back to the warehouse. There are two data points that highlight why consumer returns is the key missing piece when solving for full end-to-end carbon neutrality: 6 billion pounds and 10 billions trips.

Global estimates show that nearly 6 billion pounds of returned products end up in the landfill every year. Returning these items from the consumer to the merchant’s warehouse creates an additional 10 billion trips and 16 million metric tons of CO2. That’s the annual equivalent of 3.5 million cars. 

“Do we try to educate consumers and tell them, ‘Well, a lot of the stuff that you return actually ends up in a landfill? Well, that makes us look like idiots.'”

-Joel Rampoldt, AlixPartners

In 2021 alone, $218 billion worth of online purchases were returned. As the share of consumer spending continues to shift from brick and mortar, with single digit return rates, to ecommerce, which sees return rates as high as 40%, how merchants handle their consumer returns is becoming the linchpin in their quest for sustainability.

What Are Green Returns?

Green returns is the concept of minimizing the environmental impact of dealing with the return of consumer goods. This is done by reducing downstream carbon emissions and other negative impacts created by introducing multiple additional touchpoints and resource expenditures to reprocess a return from the original consumer back to the warehouse and through reprocessing for resell or disposal. 

The Current State of Green Returns

Despite Green Returns being the hottest buzzword in sustainable reverse logistics, the “solution” currently offered isn’t a solution at all. You may know it as the “just keep it” return method. We refer to it as the ostrich with its head in the sand. 

This option to refund a consumer and let them keep the product is a merchant washing their hands of the problem and leaving the burden with the consumer. Worse yet, they are conditioning consumer behavior with a very dangerous notion that if they are slightly unhappy they can simple process a return and have a high probability of getting to keep the item and get their money back.

You’re also gambling with your brand equity as many of these items will end up on Craigslist, Ebay, or another secondary marketplace where you no longer control the messaging being presented behind your product. Unhappy customers will use potentially damaging wording in their attempt to offload your items. 

And if the consumer truly didn’t want the product or the hassle with selling it, there’s a good chance it ends up in the landfill.

Through the Lens of a Merchant

As an operations executive I saw first hand the pallets of returns coming into the warehouse daily. At best, we returned around 10% of those to the shelf as new product. The main reason why: damaged packaging. The product itself could be in excellent condition but if the box or internal packaging was less than pristine we knew it would not meet customer expectations. We lacked the material resources to repackage the products to factory quality so our recovery options were limited.

We entertained the idea of selling open box inventory. However, any attempt to create pick locations in our warehouse for every open box SKU would have exponentially grown our storage footprint and distribution overhead. Combine that with the additional burden on our sales and support staff and it became quickly evident that it would be a losing endeavor. 

This is why many companies skip the inspection process completely in favor of the landfill or pennies on the dollar liquidation. Unfortunately, the environmental and financial costs are already sunk.

How Can We Accomplish Green Returns?

Enter Hafback. We are stepping in and taking the lead in providing the first and only real green returns solution. We took aim at eliminating the full reverse logistics cycle while also providing an avenue for merchants to sell their open box returns at their deepest discount by removing all of those associated reverse logistics costs. And all without impacting your warehouse or staff.

How ae we doing this?

Our Returns Management Software pairs directly with our recommerce marketplace. The moment a consumer submits their return your product shows up immediately for sale at your chosen discount level. Once purchased, consumer “A” gets a label to ship it directly to consumer “B” instead of returning it back to your warehouse.

Your reverse logistics cycle is gone! A win for the environment and a win for your bottom line.

Boom! A true green returns solution.

Learn more at: Hafback

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