This major chain of department stores, with more than $2B in annual revenue, has a complex supply chain that includes inventory from a wide range of luxury goods vendors. When it comes to its returns process, the retailer used to struggle with costly and inefficient handling and transportation as it collected and processed returned items in its distribution centers (DCs) and then consolidated those items over an extended period of time, eventually shipping the items back to each appropriate vendor. 

This made it difficult for the vendors to resell seasonal returned items at full price, given the long transportation times. And, the department store was oftentimes stuck paying additional shipping costs with no efficient way of reconciling with its vendors. 

The chain needed to streamline its return-to-vendor process, so it turned to Narvar,
its long-time returns partner. The experts at Narvar proposed innovative capabilities
that could unlock much-needed efficiency and cost savings: multi-label return shipping
and return-to-vendor (RTV) routing.

Leveraging Intelligent Return Routing With Narvar

The retailer expanded its partnership with Narvar to further leverage Narvar’s intelligent return routing via its returns management system which determines the best destination for each item in a returned order, including retailer-owned distribution centers, local storefronts, vendor distribution centers, etc.

If there are multiple items in a single return that require unique destination addresses, Narvar will automatically generate multiple return shipping labels for each unique location. 

This process unlocks Return to Vendor (RTV) capabilities for the major retail chain, allowing the company to send returned items back to the vendor warehouse directly rather than be routed through multiple retailer-owned facilities first. This helps both the brand and the vendor reduce their overall return shipping and operations costs. Plus, it allows the vendor to restock the returned product faster, increasing the likelihood of a full-price, in-season sale. 

What’s more, the major retail chain relies on Narvar to select the appropriate parcel shipping account when generating its return shipping labels. When an item is marked RTV, Narvar will select the relevant vendor’s shipping account to bill for the label. 

Narvar Unlocks Cost Savings and Efficiencies 

Now, the retailer saves an astounding average of $18 per returned vendor item, since the product is not traveling to two distribution centers during its return journey. 

This process also saves the retailer’s operations team a total of 20 days in labor costs in the first six months of the program—that’s 3.33 days of warehouse labor saved per month.

“Retailers and department stores have the added complexity of managing returns for many different vendor partners. With Narvar’s intelligent routing and multi-label functionality, these businesses can provide an exceptional returns experience for their customers without breaking the bank or causing major headaches in their distribution centers.” 

— David Morin, VP of customer strategy at Narvar
‍

Return-to-Vendor Functionality Reduces Risk of Return Fraud

Fraud prevention is key to this department store’s returns optimization, given the high ticket price of luxury goods coupled with the rise of retail fraud—with more than 1 in 2 shoppers admitting to returns fraud in Narvar’s 2024 State of Returns report.

Beyond the cost savings, this program also helps to reduce fraud, since expertly-trained vendor associates can inspect returned luxury goods and merchandise to validate authenticity versus having the department store warehouse associates inspect them. 

The result? Both the vendor and department store are able to limit their risk exposure from fraud and appropriately handle any deceptive consumer returns.

Streamlining Complex Reverse Logistics Needs‍

“Many retailers have streamlined their inventory and outbound shipping costs through dropshipping and marketplace fulfillment. However, this core fulfillment strategy adds increasing complexity and challenges to the reverse logistics process. With a pulse on retail logistics trends, Narvar is committed to providing innovation that powers growth and efficiency for high-volume brands, including functionality that powers even the most complex return networks.” ‍

— David Morin, VP of Customer Strategy at Narvar