Insight / Blog

Why mastering returns is key to 3PL growth

Posted on 23rd April 2024

Summary: With returns management systems, 3PLs can turn returns from a burden to a competitive advantage.

Returns are one of the biggest problems plaguing e-commerce retailers, and thus one of the biggest opportunities for third-party logistics companies to attract and retain retailers is to provide them with reverse logistics solutions. 

However, while 3PLs typically excel at fulfilment, returns processing usually lags behind in sophistication and value maximisation. Unlike the well-supported fulfilment journey that’s catered to with warehouse management (WMS) and order management (OMS), returns frequently still rely on manual processes, leading to delays and wasted resources.

By implementing returns management systems, 3PLs can completely transform how they handle returns, turning e-commerce returns from a burden that sits untouched in a cage to a competitive advantage that drives growth.

Returns technology to cut costs and drive growth

Returns orchestration will give 3PLs the tools to optimise the entire returns process, allowing them to:

  • Automate workflows for faster processing and reduced errors.

  • Utilising returns data for improved visibility.

  • Facilitate sorting, returns decisions (refund, refurbish and resell), and re-stocking.

The increased efficiency not only equates to cost savings for 3PLs but also improves the consumer experience of returns, a key differentiator in a fiercely competitive retail landscape. That’s a win-win for 3PLS: cost reduction through better workflows and increased revenue by attracting and retaining more retail customers.

Pre-sort efficiency from returns initiation 

Digital returns portals are powerful tools for 3PLs to transform the returns process and enhance their value proposition by streamlining the initiation and tracking of returns for both the retailer and the customer.

From the moment a consumer registers a return, the portal will gather data and insights about each return, including what items are being sent back, by who, and why. The data gathered won’t just inform 3PLs about what returns are coming back, but also allow them to optimise returns processing.

For example, some returns can be automatically rerouted to alternative locations if they hit specific criteria, such as sending damaged items or returns with particular SKU codes straight to repair or disposal facilities. This not only saves 3PLs the act of processing and rerouting these returns themselves but also removes extra transportation costs.

Many retailers are accelerating the digitisation around returns, which puts the pressure on logistics service providers to be ready to access retailers’ returns data and use it to ensure maximum efficiency in their own operation – including ingesting data to other systems like WMS and OMS, enabling intelligent returns processing and a more efficient reverse supply chain.

Turn ecommerce returns into growth

Our returns platform reduces costs, increases efficiency, and improves the customer experience, so you can give your customers a solution to one of their biggest problems.

Find Out More

From manual sorting to automated workflows

Many 3PLs are still relying on manual returns processing that requires workers to scan each parcel and input individual data for each item. This is not only time-consuming and prone to errors, but it also creates a bottleneck in the process.

With returns orchestration technology, the data captured at returns initiation is integrated into warehouse management systems, so all information, such as product details and return codes, are already available for each item before it even arrives in the warehouse. Automated workflows then take over, displaying clear instructions for each item, eliminating the need for manual sorting and significantly speeding up the entire processing cycle.

In addition, parcels can be sorted into designated areas in the warehouse on arrival based on the data collected. For example, items with a high chance of being resold (for example, based on SKU and return reason), can be placed into a priority zone. These items are then processed first, ensuring they are quickly returned to inventory and available for purchase. This reduces processing time for the most important items, and prevents a backlog of potentially valuable stock from accumulating in sorting cages.

Prioritising high-resale items creates a win-win situation for the retailer and the 3PL. Retailers recapture lost revenue by getting sellable items back into stock faster. For the 3PL, faster processing of valuable inventory translates to increased revenue and a stronger value proposition for their retail clients.

Providing 3PLs the tools to level up returns

Returns orchestration provides 3PLs with a more efficient and cost-effective returns management process. Data captured at the point of return registration provides the foundation for intelligent sorting within the warehouse, reducing the operational effort required for returns management. With automated workflows and intelligent sorting, 3PLs can process returns faster and with fewer errors. This frees up valuable resources and cuts costs, allowing them to handle a larger volume of returns and take on more clients.

As a result, returns orchestration doesn’t just improve the processing of existing returns, it becomes a tool for 3PLs to scale their operations and expand their market reach, which will become ever more important as retailers struggle with rising return rates and costs.  

Ready to unlock the power of efficient returns and elevate your value proposition for retailers? Talk to our team about how our returns orchestration technology can transform returns from a burden into a strategic advantage.

Grow volume & cut costs

Get in touch with our team to discuss how we can help you become more efficient in the first and last mile.

Get in touch



Related articles

7 tactics to drive self-service parcel drop-off adoption

Focusing on parcel kiosks, we explore 7 tactics to encourage customer adoption and drive volume into out-of-home (OOH) delivery networks.

Lessons from a decade in the first and last mile

A decade as Doddle taught us some lessons - and Blue Yonder helps us see what will matter in the next decade.

Postal results, reforms, and returns

Posts around the world are seeking reform, but how can they drive improved results in the short term?

Sign up for our newsletter to stay on top of the latest industry trends, challenges and solutions.


Doddle needs the contact information you provide to send you our monthly newsletter. You may unsubscribe at any time. Doddle will not sell your information to any 3rd parties. For more information, please review our Privacy Policy.

Wrong value for the component.
Wrong value for the component.Wrong value for the component.Wrong value for the component.
This field is for validation purposes and should be left unchanged.