66pc of faulty returns wrongly assigned

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Two thirds of “faulty” returns are actually found to have “no fault found” or be “easily rectifiable”, according to the director of physical distribution and customer care at Philips, Jim Gallagher.

Gallagher took to the stage at this month’s Logistics Manager Summit at The NEC in Birmingham. The free one-day conference was a chance for logistics and distribution managers to hear from industry professionals on the topic of reverse logistics.

During his presentation “Reducing the cost of faulty returns” Gallagher said that Philips never knowingly sells on faulty returned products in the UK.

But needing to recover revenues, the company focuses on repairing the 67 per cent of products where no fault was found.

He said the category of consumer lifestyle goods, which includes personal care, lifestyle entertainment, domestic appliances, and health & wellness products, is the most challenging to repair.

Focusing on domestic appliances, which total 33 per cent of the overall sales within this category, Philips’ UK challenge on faulty returns sees the company state five goals; remove wasted costs between Philips and its customers, create direct intervention with customers where it is sensible, retain brand integrity, make its consumer satisfaction scores meaningful, and enhance its product.

Although the company is seeing success in introduced methods, such as warranty enforcement and testing before credit, and it has reduced faulty returns by £1 million so far this year compared to 2012, and it hopes to introduce further methods to tackle the number of false faulty returns.

For more on Philips’ future plans and the Logistics Manager Summit, please see the November issue of Logistics Manager.

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