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Reverse Logistics Solutions: A Shipping Trend Your Business Needs

Streamline your supply chain and boost loyalty for an excellent customer-centric returns experience.
Oct 12, 2023
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Purolator » Reverse Logistics Solutions: A Shipping Trend Your Business Needs

What is reverse logistics?

Reverse logistics is one of the growing shipping trends and refers to the process of managing the flow of goods from your customer back to your business. This adds value to both your e-commerce and sustainability initiatives, as optimized reverse logistics solutions support product returns, refurbishment, recycling and more. But how does this benefit your business? 

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How do reverse logistics solutions benefit your business?

With up to 30% of all e-commerce products being returned by customers, it’s no wonder reverse logistics is on the rise. Once viewed as an occasional inconvenience, returns are now a vital part of the customer journey and an opportunity for your business to improve customer loyalty and retention. Additionally, it can lead to cost savings in the long run. By optimizing your inventory management and reducing the need for new product production, an efficient reverse logistics strategy stands to improve your customer satisfaction rates, minimize waste and enhance operational efficiency.

In this article, we’ll be covering the basics of how your business can start implementing reverse logistics solutions. To start, we’ll address questions like:

Key Takeaways

  • How do hassle-free returns benefit your business?
  • How can you successfully integrate reverse logistics into your business?
  • What are some ways to provide an excellent returns experience?
  • What are some return logistics challenges?
  • How can you avoid refund fraud?
  • How does an optimized reverse logistics system benefit your business?
  • How can the right reverse logistics partner enhance your supply chain?

 

 ideal reverse logistics process looks like

What are the benefits of a streamlined returns process?

Returns play a vital role in building brand loyalty. After all, a hassle-free returns process helps customers feel assured that they can easily return or exchange a product, making them more likely to purchase from your brand again. And on the flip side? As many as 57% of customers said that a negative returns experience caused them to abandon a retailer entirely. That’s why having a seamless returns process is necessary to foster repeat purchases and long-term loyalty.

How to successfully integrate return logistics into your business

The reverse logistics process begins with your customer and ends with the product back through your business’ doors. But when it comes to integrating reverse logistics into your existing process, where do you start? Here are some key factors that any successful reverse logistics company or provider needs:

  • A robust returns policy: A well-defined returns policy reduces any frustrations or obstacles your customers may have while they return products. A clear policy improves the overall customer experience, while also giving enough leeway for your business to efficiently track and handle returned items. This means your policy should spell out time limits for returns, acceptable reasons for returns and any associated fees. On top of that, it should specify available returns options for your customers—like refunds, exchanges or store credits—and be clearly visible and easy to find on your website. After all, a visible and well-defined returns policy is key for any hassle-free returns process.
  • Comprehensive tracking on returns: Tracking isn’t just great for your customers, it helps your business, too. Being able to track your returns lets you accurately assess their volume and frequency, which can provide valuable insights into customer satisfaction and product quality. It also reduces the risk of incorrect refunds or lost items. Additionally, tracking returns can help you identify any potential fraudulent activities, allowing you to take appropriate measures to prevent them.
  • A green solution to process goods returned by customers: Reselling, repairing or recycling returned items is crucial for reducing waste. These are all green solutions that can lower your business’ carbon footprint and promote a more sustainable and circular economy. But how exactly do you start integrating this process in your warehouses? Here’s how:
    • When you receive a returned item, the first thing you want to start with is an inspection. If your goal is to resell the item, you need to check if it’s in good condition. If so, it can be cleaned, repackaged and resold. When items are resold, they have the opportunity to be used by someone else, extending their lifespan and reducing the need for new production. However, not all returned items are fit to be resold. This is when repairs come in.
    • If any returned items are damaged, but repairable, they can be sent to a repair centre. Repairing returned items saves you the resources and energy that would’ve been required to manufacture entirely new products. It also encourages a shift towards a more sustainable mindset by putting value in the longevity of goods. Once repaired, they can be resold. And if they can’t be repaired, you’ll want to consider recycling.
    • When returned items are beyond repair, recycling or donation is your answer. They can be sent to a recycling centre, where they will be properly disposed of or repurposed. It’s important for your warehouses to have efficient processes in place to handle returns in an environmentally friendly and cost-effective manner, because when you recycle returned items you’re actively diverting materials from landfills and towards new supplies and products. 
    • Return shipments can produce a lot of excess packaging materials, and this can turn into a lot of waste if your packages are damaged on the journey to and from the customer. That’s why you’ll want to invest in sustainable packaging. You’ll be able to cut down on waste with recyclable and biodegradable materials. On top of that, try to use the right-sized box for the right item. When each package is designed to perfectly fit an item, it also helps to reduce waste by avoiding excessive layers, unnecessary components and bulky designs. In addition, streamlining your packaging can also reduce transportation costs and emissions by minimizing the overall weight of your shipments.
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  • A marketing solution for brand recognition and trust: Effective supply chain management demonstrates your company’s commitment to customer satisfaction and sustainability, and you can share that success through your marketing. This lets you build trust and loyalty among your customers. Furthermore, you can analyze the data collected from your marketing efforts to determine customer preferences, feedback about product quality and potential areas where your shipping fulfilment process can be further improved. For example, if a marketing campaign that focuses on your reverse logistics solutions is successful, then you know that you’ve hit a major need that your audience is looking for and you can double-down on your returns integration efforts.

What parts of the sustainable shipping experience do your customers really care about?

 

When it comes to building a strong relationship with your customers and improving brand recognition, you really want to focus on the parts of your service they care about most. However, sometimes what a business expects customers to want most can be quite different from what they actually want. Learn more about how customer expectations are shaping sustainable shipping practices.

By consolidating return shipments at Purolator International’s facility, The Orthotic Group cut shipping costs and time, lowered brokerage costs, boosted customer satisfaction and significantly improved reverse logistics processes

Returns done right: Customer-centric tips for an excellent reverse logistics experience

It’s great to be aware of why reverse logistics is beneficial, but let’s dive into more detail on exactly how to run a successful returns process. Check out this list of common tips for reverse logistics companies and providers:

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Complete visibility and tracking on returns: With proper visibility, your business can accurately assess the extent of your returns and the reasons behind them. This information will allow your company to identify patterns, trends or recurring issues with its products or services. Additionally, having good visibility into your returns will help identify opportunities for improvement while allowing you to avoid potential roadblocks with efficient inventory management and supply forecasting.

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Consider free returns: There’s no doubt that free returns will make your customers happy, and it can even encourage more sales. When customers know they can always return a product without any extra costs, it can give them the confidence to make more purchases, increasing your overall revenue despite the costs of providing a free service. On the flip side, free returns can result in hefty processing costs for your business if you don’t have the means to support it. Consider the cost of shipping fees, restocking and labour. All of these factors add up. Whether free returns are ultimately beneficial for your business depends on the size of your company and if you have the resources available to support the costs involved.

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Ask customers why they’re making a return: When your customers return goods, it’s an opportunity to ask them why they’re returning a product. If you don’t, then your business may miss out on valuable insights. Understanding the reasons behind returns can provide key information about your product quality and customer satisfaction. By collecting this data, you can identify patterns, address common pain points and make informed decisions about enhancing your products. To top it off, asking customers for feedback shows your commitment to them and your willingness to understand their needs. It can help you build stronger relationships and improve the overall customer experience.

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Enable omnichannel returns: Give your customers the option to return products online or in-store. An omnichannel retail strategy can improve customer satisfaction overall, as they are provided with a consistent experience wherever they make their returns. There are also many advantages that your in-store employees can bring to the table, too. They can quickly inspect, identify and address product issues directly, and they’re your first line of defense against fraud and returns that don’t meet your policy’s requirements. This saves you on shipping fees and also eases up your warehouse capacity. Additionally, your employees can also offer customers different products that are better at solving their needs, as they’ll have a good understanding of why a return is being made in the first place. Last but not least, in-store returns make the process more convenient for your customer, so there’s really no reason to restrict this option.

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Adjust your returns policy over the holiday season: While you may think your ordinary returns policy can handle the holiday rush, you might want to think again. Not every returns policy is designed to withstand the stress and chaos that the holiday seasons bring. During this time, you’ll notice a jump in gift purchases and an increase in returns and exchanges as a result. By properly planning for peak season shipping and modifying your returns policy to be more flexible, you’ll be giving your customers the confidence to purchase gifts from your business during this period. But why does your returns policy need to be more lenient during the holidays? Consider that customers are looking to buy gifts for family and friends, and some of them may live abroad. The typical 30-day return window becomes too short if your customer needs to ship their gift to a loved one, wait for them to make a decision to keep or return it, ship it back and then return it to your business. And if your customers feel like they can’t return or exchange their holiday gifts easily, they’re unlikely to feel confident about purchasing from your brand.

Understanding the challenges in return logistics

Purolator delivering package

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While reverse logistics can greatly benefit your business, you should also remain aware of its common challenges. By understanding what you’re likely to run into ahead of time, solving them will be an easier task. So let’s dive into these challenges and how you can tackle them.

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Customer expectations: Meeting your customers’ expectations can be a challenging task. They tend to have high expectations when it comes to returns, as well as the overall experience with the reverse logistics process. Try offering faster product replacement times. By partnering with the right shipping provider, you’ll be able to streamline your e-commerce returns process and meet your customers’ demand for faster returns and exchanges. Faster returns lead to faster refunds, which means more satisfied customers who are happy with your brand.

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Inventory management: One of the main challenges with inventory management is efficiently controlling the flow of returned products. These products need to be properly received, inspected and classified. Additionally, reverse logistics inventory management often relies on coordinating with multiple stakeholders, including your customers and suppliers, which can create logistical and communication difficulties.

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Transportation and routing: Reverse logistics occasionally involves handling products that are damaged or defective. That means you’ll need a shipper that can reliably transport returned goods so that they aren’t further damaged in-transit. After all, with more damages comes more costly repairs. On top of that, optimizing transportation and routing becomes crucial. When you’re making a big shipment, you’ll want to reduce your freight shipping costs as much as possible, while ensuring timely and accurate delivery. By working with a shipper who can guarantee that returned products will arrive intact and within a certain time limit, you’ll be able to reduce repair and inventory holding costs.

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Sustainability and environmental concerns: If sustainability is a priority for your company and your customers, then you want to make sure your reverse logistics process doesn’t generate more waste than it recycles. This can be challenging, as it involves understanding the environmental impact of each stage of the process. Once you know that, you’ll need to implement strategies to minimize waste, reduce energy consumption and make recycling a core part of your process. One of these strategies is to use sustainable packaging. A robust, eco-friendly package can protect items shipped to and from the customer, while also being easily recycled or composted. Additionally, you may encounter logistical challenges with coordinating the collection, transportation and sorting of products due for recycling. Partnering with a shipper who champions sustainability can help streamline your recycling process and further bolster your eco-friendly initiatives with electric vehicles and green logistics solutions.

Get expert advice on how your shipping partner can help reduce your carbon footprint.

Fraud in reverse logistics

It’s no secret that dishonest or deceptive practices can occur during the product returns process. To prevent fraud, your business can implement measures such as requiring proper documentation for all returns and implementing better verification processes. The types of fraud you’re likely to encounter include:

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Return abuse or fake returns: This is when individuals or entities submit false or misleading information to claim refunds or store credit that they aren’t entitled to. These fake returns often involve products that don’t qualify for a legitimate return or were stolen to begin with. Depending on how many fraudsters you’re dealing with, this can result in massive financial consequences. That’s why it’s so important to employ proper authentication processes and customer behaviour analysis to detect and prevent fake product returns. You can also use tracking technology to keep track of customer returns and flag customers who return more items than they purchase.

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Wardrobing: Although wardrobing is mostly associated with the clothing or fashion industry, it can apply to other sectors as well. Typically it’s defined by the practice of buying clothing, wearing it once and then returning it for a refund. People who do this are essentially treating their clothing purchases as rentals. This practice not only undermines the integrity of your industry, but also leads to financial losses. To combat wardrobing, try imposing restocking fees or limiting the time frame for returns. Nowadays you can even use augmented reality (AR) to let customers virtually try on clothing and accessories. And with the clearer imagery captured by the latest cameras, the colour and detail of a product can be displayed online with a high degree of accuracy. These solutions discourage customers from wardrobing while also improving your online store’s customer experience.

Benefits of optimizing your reverse logistics system

When you have your returns process all sorted out, the next step is to take it to the next level. By optimizing your existing returns process, you’ll be maxing out its efficiency and, as a result, maximizing the benefits it brings to your business. What does that look like? To start, a well-optimized reverse logistics process allows for faster and more accurate returns. This can result in a better customer experience, and more accurate insights and data to inform your business decisions. By analyzing the reasons for returns and identifying customer return patterns, you can proactively address any issues and even enhance your products based on the information you gather—ultimately improving your bottom line. This leads to further benefits such as:

  • Cost reduction
  • Improved customer retention
  • Faster and better service
  • Loss reduction
  • Improved brand sentiment
  • Waste reduction and greater sustainability

Optimizing your returns can be supported by the right shipping partner

Working with a shipper who is experienced with handling product returns is always ideal. However, if you’re looking to optimize your returns, you’ll want to find a shipping partner who can elevate your existing process. Look for a partner who offers:

  • A sustainable returns process
  • Label-free QR codes
  • Convenient access points, drop boxes or store locations that customers can access from nearby 

Accelerating Efficiency: Strategies to Overcome Bottlenecks in Automotive Shipping graphic

Work with a logistics company that can meet all your shipping and reverse logistics needs

While reverse logistics has undeniable benefits for your business overall, optimizing the process and making it run at its best can be a huge endeavor to tackle on your own. But it becomes a lot easier when you work with a logistics company who has returns expertise. For example, when The Orthotic Group chose to partner with Purolator to fulfil their outbound shipments and returns, they found a partner they could rely on. Purolator provided them with an all-in-one solution that improved the efficiency of their entire supply chain, including their cross-border return shipments, resulting in overall savings of 41%.

“Now with Purolator, we’re getting the information we need to improve our logistics process each month.” – Steve Magirias, VP of Operations – The Orthotic Group

When you’re looking for a reverse logistics partner, choose a shipper who offers:

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Cross-border shipping: When your U.S. or international customers make returns, you can count on our expertise and helpful tools, like the Purolator Trade Assistant (PTA) and Digital Commercial Invoice, to bring reliability and convenience to your cross-border shipments.

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A wide delivery network: Enjoy nationwide reach with the largest number of operating terminals in Canada. Our vast network covers 100% of Canadian postal codes, so you can send and receive products almost anywhere in the country.

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Over 2,500 access points: Your customers get total convenience with an easy pick-up, drop-off and package return experience. They can choose from a variety of accessible shipping locations and access points throughout Canada.

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National hub: With our national sorting hub, your returns will be processed by a sustainable facility that uses world-class automation to deliver shipments as quickly and as efficiently as possible.purolator national hub arial view purolator national hub arial view

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Full tracking from point to point: Need total tracking and visibility? Look no further than Purolator Your Way. Your customers gain absolute visibility into their shipment’s journey and customizable options to suit their preferences.

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Convenient-to-use online portal: Our online portal lets you track shipments and even make special requests to suit the particular needs of your items. Create courier and freight shipments, get estimates, schedule pick-ups and more.

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On-time and on-demand delivery: Trust our Mission Critical service to take your urgent shipments to their destination on time. It’s our fastest shipping solution, and offers best-in-class tracking visibility and 24-hour access to our shipping specialists.

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Competitive rates: Our domestic deliveries offer competitive rates, and when you choose our ground shipping options your items will be delivered a day faster than our competition.

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Reliable returns: As a leader in integrated freight, package and logistics solutions, you can count on us to deliver returns quickly and efficiently. Our label free solutions speed up the process and take the hassle out of returns.

Reverse logistics plays a crucial role in meeting the evolving needs of customers in today’s global supply chain and operations. With the increasing demand for e-commerce and sustainable shipping, your business must embrace the flow of goods from the customer back to your operations and can enhance customer satisfaction. By implementing an effective reverse logistics strategy, your company can save time and costs and improve overall efficiency and competitiveness in the market. You’ll be able to optimize inventory management and sustainably refurbish and recycle returns instead of solely focusing on manufacturing new products. And when you take on these challenges with the right shipping partner, you’ll be able to make reverse logistics a seamless part of your supply chain, creating a circular economy that promotes sustainability while meeting the high demands of end consumers.

Ready to elevate your reverse logistics experience with efficient solutions and faster deliveries?
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