Case Study: Consumer Electronics e-tailer

Setting Up Reverse Logistics Program:

Our client, an e-commerce retailer was selling consumer electronics products such as computers, laptops, cell phones, digital cameras, and MP3 players on its website. The products had a 7% return rate and the company did not have a reverse logistics strategy in place. We consulted the client to set up a reverse logistics program that included product refurbishment, liquidation, and recycling.

Regulatory Compliance:

Per FCC regulations, all returned electronics with “memory” need to have all consumer data erased before the product can be liquidated. For each instance where the data is not erased, retailers can be fined up to $1,300. We connected our client with a third party “data wiping service” company that specialized in this area.

Product Disposition:

Once the data had been wiped, the product could be handled in three ways: refurbished, liquidated or recycled. Depending on the condition of the returned product (working/nonworking) and physical appearance (scratches, screen damage etc.), the “data wipe” company determined if the product could be refurbished or not. If yes, the “data wipe” company refurbished the product for resale on the e-tailer’s website.

For nonworking product, we introduced the retailer to a liquidator that could “harvest” parts from the product.

For small devices where parts could not be harvested, we connected our client with a company that specializes in “electronic recycling”, in compliance with EPA (Environmental Protection Agency) guidelines.

Benefits to Client:

The client did not know how to handle returned products but with our advice was able to set up a product return strategy and recover money (25 -50 cents to the dollar) on the returned products. The client was compliant with FCC and EPA guidelines and avoided potential fines.