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Process Steps for Returned Goods From Retail Customers

Regardless of how careful a business is to give the highest quality items and the best customer experience, returns are a must in business. Even in cases where a business has a policy that disallows the return of items, businesses still experience situations where a customer wants to make a return. As such, a business needs to have well-defined steps for returning goods to determine the reverse process. A business should leverage product return to increase repeat sales and improve customer experience and satisfaction (Robertson et al., 2020). How a business handles returns may have a positive or a negative effect on its operations. The product return process starts when a customer wants to return a product for an exchange or a refund. Various steps are involved when the product returns to the business, and the results of each step determine whether the product will continue in the reverse process or be disposed of at a particular step.

Process Steps

Step One: Receiving

The receiving process starts when a customer requests to make a return on the website or via a call. Here the business should allow the customers make the return and ask them to write feedback on why they are making the return (Robertson et al., 2020). The customer then sends the physical product to the retail store or the distribution center. Some businesses collect the item from the customer, which helps enhance customer experience. Once it is at the store, staff check for any visible damages.

Step Two: Verification

The product is verified against the business return policy to assess whether it meets the return criteria. The business staff must check whether the item had been purchased from the store, which is proofed through a receipt of purchase, bank statement, or a confirmation email. For items such as clothes and bags, the staff checks for labels, price tags and if there are signs of stains or wear. The staff also check for the original packaging to attest it was from that store. The results of this step may make the business reject the return request. If the item is legible for refund or exchange, it goes to the next step.

Step Three: Inspection

In this step, the business-trained staff examines the product’s functionality, determining whether a product will be disposed of, whether the issue may be fixed, or initiating another return policy to the wholesalers or the manufacturers. For example, the product’s condition helps prevent more sales by calling off the product. This happens in cases where the product is non-defective and requires more processing. He et al. (2020) state that items that can be salvaged via refurbishment or repair to bring them back to a saleable condition are ideal for the reverse process.

Step Four: Decision Making

It is the most critical step where the business decides whether the product should undergo the reverse process or be disposed. The decisions are made based on the condition of the item, its store policies, the potential of the item for resale, and legal requirements. Based on the information the client indicated when returning the item, they may receive a refund or an exchange. The business also decides on the continuation of the reverse process or disposition.

Step Five: Creating a Return Request

In cases where the customer wants an exchange, the item is processed as a new order and sent for delivery to the customer as per the definitions of the return policy. However, they must assess whether the old and new products have the same prices. If the price is high, the customer makes an additional payment; if lower, they get a refund of the difference (Robertson et al., 2020). When the customer wants a refund, the business accountants or cashiers process the refund. There are various refund options, such as refund via the original payment methods, refund by cash, or refund via vouchers or points to use in the next purchase. The staff should then record the reasons for product return and refund to use in making future merchandise decisions.

Step 6: Reverse Process

A cost-benefit analysis is conducted to assess whether the cost of refurbishing or repairing the defective item matches the potential resale value of the product. The technical experts of the product provide information on whether the repaired item will meet the quality standards of the original product. If the product has a good future value and a market demand, the refurbishing or repair process begins to meet new quality standards. It involves replacing the damaged part and then retesting it (He et al., 2020). The product then goes through a comprehensive quality control inspection to ensure it is safe for resale. Next is repacking and reconditioning to make it have visual appeal and resemble new original products. The product is then returned to the store’s inventory and made available for sale.

Step 7: Disposal Process

If the returned product is deemed unsalvageable, the business route it for disposal per environmental regulations. The business may dispose of it through eco-friendly methods such as donation, recycling, or using proper waste management techniques. The most suitable disposal methods depend on the nature of the product. Some products will require being sent to landfill sites, while others may be sold to liquidators who purchase returned items to resell in their channels in bulk (Taleizadeh et al., 2019). The disposal process occurs when the returned item is considered unfit or of no value to the business. The disposal depends on the local regulations and company policies concerning such items.


The process of returned process goods basically involves seven steps, but this may differ depending on the return policy of the retail business. The results of each step determine the activities of the net step. For example, if a product does not qualify in the verification stage, it does not proceed to the other stages. The decision-making step is the most critical step, which determines whether the returned product will go through the reverse process or be disposed of per available regulations. The decisions are made based on the extent of the damage, its cost-effectiveness, the market demand for the products, and the chances of having the original quality standards to make them in saleable condition. The reverse process enhances brand reputation and improves customer satisfaction. It is also a safe way to manage costs linked with product returns.


He, Y., Xu, Q., & Wu, P. (2020). Omnichannel retail operations with refurbished consumer returns. International Journal of Production Research58(1), 271-290.

Robertson, T. S., Hamilton, R., & Jap, S. D. (2020). Many (un) happy returns? The changing nature of retail product returns and future research directions. Journal of Retailing96(2), 172.

Taleizadeh, A. A., Haghighi, F., & Niaki, S. T. A. (2019). Modeling and solving a sustainable closed-loop supply chain problem with pricing decisions and discounts on returned products. Journal of cleaner production207, 163-181.


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