The holiday season brings a series of challenges to the supply chain industry especially as e-commerce continues to grow. Companies have to efficiently ensure that customers' packages will arrive in a timely matter, putting added stress on the warehouse and transportation sector. However, the peak season does not end once the holidays are over. Reverse logistics make the busy season last even longer as more people return unwanted holiday gifts. Here are three observations from Supply & Demand Chain Executive (Jan 11, 2019):

1. Delivering hassle-free returns is critical to retaining customers, and consumers are looking to shop with brands that quickly provide refunds. Retailers must leverage tracking for returns and offer progress reports on the transaction, which requires an efficient supply chain.

2. Overly consumer-friendly return policies encourage a costly rate of returns.L.L. Bean ended its lifetime return policy this year because it led to "abusive" returns, costing the company $250 million in losses over the last five years. When particular items are consistently being sent back, inaccurate product descriptions or sizing can overburden reverse networks. While the push to use fewer packaging materials can reduce a company's carbon footprint and costs, a delicate balance must also be achieved. If packaging fails to protect merchandise during transit adequately, it is more likely to arrive damaged, prompting items to be returned more frequently.

3. Some retailers leverage dedicated reverse networks to handle returns, grading out products to be entered back either into regular sales or other channel distribution. Designing facilities specifically for reverse logistics allows companies to process returns more efficiently and effectively.

A strategically designed reverse network allows retailers to shrink the time frame from the start of returning to when a customer receives a refund. Organizations that empower their brick-and-mortar stores to process online returns can reduce the stress of returns for customers and decrease the amount of time returned merchandise is in the reverse chain.

2. Why is reverse logistics important?
4. Define a "closed-loop supply chain."