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Product Return Processing


product returns Process

This case study will cover the week five reading material.

Stock, J. R., & Mulki, J. P. (2009). Product returns processing: An examination of practices of
manufacturers, Wholesalers/distributors, and retailers. Journal of Business Logistics, 30(1), 33-VII.
This study will need your full attention to cover the study at hand. Evaluate the study and give a full
report of your understanding of the ten hypotheses developed in the study. Choose one hypothesis
and give your opinion, as well as providing five other citations who agree with your position. Also, as a
graduate student, there must be a way to practice making an educated evaluation of data placed
before you. Please remember this is an academic paper and 3rd person is required.

The case study will be 3-5 pages. The project must include a title page, table of contents, abstract,
and a reference page. The project will demonstrate the knowledge acquired through course work
completed to date. The project is an application of this knowledge and requires the student to analyze
and interpret the topic of interest. For added resources to use on this assignment and the research
paper on APA, writing, and grammar.

Table of Contents Error! Bookmark not defined.
Abstract 3
Product Returns Processing 4
H1: Product returns and Management Handling. 4
H2: Responsible Person for Product Return’s Processing 4
H3: Single Person and Third Party Outsourcing 4
H4: Use of Formal Methods 4

H5: Recovery Rates 5
H6: Return Authorizations 5
H7: Product Returns and Stock or Inventory 5
H8: Products Re-packaging 5
H9: Disposal of Product Returns 6
H10: Refusal of Product Returns 6
Conclusion 7
References 8



The issue of product returns is a significant concern within the supply chain. It is a
crucial activity for organizations. It involves manufacturers, wholesalers/distributors,
retailers, and consumers. A case study to understand the process of product return and reverse
logistics was carried out. Several hypotheses have been suggested to examine the primary
handling of product returns, effectiveness and competency of the stages involved in handling
returns. Reverse logistics also provide the advantages accompanied by product returns (Stock
& Mulki, 2009). Hypothesis results from 230 respondents’ shows this process is generally
assigned to middle level and senior management in organizations. It also shows overall high
recovery rates regarding monetary value from items being returned. It as well indicates the
utilization of return authorizations by firms for products returned. This report provides a
review of various hypotheses within the supply chain that informs more about product
returns. The paper provides an explanation of the 10 hypotheses according to Stock &Mulki
(2009) and a selection of the most significant hypothesis that communicates more about the
handling of product returns.


Product Returns Processing

There have been studies to determine the importance of product returns as well as reverse
logistics within the chains of supply. Several hypotheses have been carried out to justify the
recovered value throughout the return process.
H1: Product returns and Management Handling.
This brings to the understanding that while in the forward product logistics there is a
specific person in charge. This hypothesis was supported as middle or senior management
was delegated to the return processing.
H2: Responsible Person for Product Return’s Processing.
Many firms tend to focus on involving a third party employee to deal with product
return process as well as reverse logistics. This helps in promoting competence and
effectiveness in the handling of returns goods (Stock & Mulki, 2009). The results did not
support this hypothesis .it indicated multiple person responsibilities for product handling
except for the retail sector.
H3: Single Person and Third Party Outsourcing
This means that the tasks of product return process can be delegated to other firms
who have specialized and its employee’s undergone training, which can be formal or
informal. This looks on the enhancement of active processes and competitiveness of end
products, which is crucial in the marketplace. According to the outcomes, many of the firms
have reverse logistics and functions of product return which are done in-house and therefore
it was not supported as well (Stock & Mulki, 2009).

H4: Use of Formal Methods
This implies that a majority of companies use recognized procedures to train their
workers, this makes processing of returned products quicker hence helping in the recovery of
greater values from those goods. Formal methods ensure products do not stay long in the
reverse channels, which negatively affect profits. Results supported that only a few
companies use formal training methods.
H5: Recovery Rates
Retailers are closer to consumers, and therefore they had the higher chances of getting
products back into the stock to be sold. Study results supported this hypothesis.
Manufacturers got the least amounts from returned products.
H6: Return Authorizations
Since it is acceptable to return products and get a refund or a replacement, some practitioners
have reportedly noted retailers forward the non-defective returns from consumers to firms.
This amounts to manufacturers as well sending those products directly into inventory after a
haste examination hence the products getting resold as new. Therefore, studies results
supported this hypothesis (Stock & Mulki, 2009).
H7: Product Returns and Stock or Inventory
In this case, study results showed that wholesalers had the highest percentage of
directly stocked recovery products returned followed by manufacturers, then retailers.
Therefore this hypothesis was false.
H8: Products Re-packaging
In this case, manufacturers are more worried about the loss of brand equity. Once
retailers return the products with defects or damaged boxes to manufacturers, replacement of

defected parts and re-packaging is done whereby these products are then sold to brokers. It
also happens that some retailers are returning the same type of product to the same
manufacturer hence the number of re-packaged and restocked products higher in comparison
to wholesalers, distributors, and retailers. Their outcomes supported this hypothesis as
producers had the uppermost percentage of re-packaged and returned to stock products (Stock
& Mulki, 2009).
H9: Disposal of Product Returns
For customers to return products, they may be in poor packaging conditions, a problem in
using them or may have defects. Many of these products come back to wholesalers and
retailers, but end up to the manufacturer who is at the forefront of production and distribution
chain. Once the manufacturer realizes these products cannot be sold as new goods or be
repaired, they end up disposing it as scrap or damaging it to get raw materials. This
hypothesis was proved right as wholesalers reported the lower percept (Stock & Mulki,
H10: The Refusal of Product Returns
In a recent study, retailers are seen to be more concerned with individual customer
profitability and trying to minimize unprofitable customer transactions. This includes services
to customers that no longer have gained to the retailer (Stock & Mulki, 2009). It means that
retailers are no more willing to carry anyone’s burden such as customers and manufacturers
through straining of product return policies. Test results proved this hypothesis true as a
denial to admit product return was highly tallied for retailers (Schrotenboer, Wruck,
Roodbergen, Veenstra& Dijkstra, 2017)).
Hypothesis h7 states, “that manufacturers will have more products returns placed directly
back in stock or inventory than retailers or wholesalers/distributors. “Consumers hence

increasing items returned to inventory return products that require re-packaging due to
damaged boxes to manufacturers. There are also those products with small defects or
imperfections returned by customers; they end up to the manufacturer who examines them
and after that send back to stock (Chaker, Schumann, Zablah & Flint, 2016). The latest study
also shows that retailers frequently return the non-defective returns from customers to the
manufacturer and therefore I support this hypothesis. Hypothesis 7 is the most significant for
study as it shows the reasons for product returns and how companies can establish strategies
to reduce product returns and other defective products (Subhashini, 2016). The main reason
for supporting this hypothesis is that it deals with product returns, reasons for returns and
opens the field for further studies. According to Rossi & Krey (2017), it provides a way on
how a manufacturer should design products that align to the market and consumer needs as
well as test the products before its use. It also provides avenue on how companies should
track product performance in the market and strategies that can reduce product returns or


In summary, it is essential to establish various hypotheses to test their accuracy within the
reverse logistics chain. This is an important strategy that will help the manager to establish
the best production phase and distribution processes that, if maximized will reduced product
returns and recalls. Companies should efficiently design products product to match with
market and consumer values and specifications as well as test the products in its right market
to ensure that the prototypes are well manufactured. Besides, manufacturers should follow the
design given in the designing phase in order to align the production strategies with the current
market demands. Therefore, more studies should be established to provide more information
that will allow companies to efficiently and effectively handle product return processes.



Chaker, N. N., Schumann, D. W., Zablah, A. R., & Flint, D. J. (2016). Exploring the state of
salesperson insecurity: how it emerges and why it matters? Journal of Marketing
Theory and Practice, 24(3), 344-364.
Rossi, P., & Krey, N. (2017). Marketing Transformation: Marketing Practice in an Ever
Changing World. In Conference proceedings AMSWMC (p. 2).
Schrotenboer, A. H., Wruck, S., Roodbergen, K. J., Veenstra, M., & Dijkstra, A. S. (2017).
Order picker routing with product returns and interaction delays. International
Journal of Production Research, 55(21), 6394-6406.
Stock, J. R., & Mulki, J. P. (2009). Product returns processing: an examination of practices of
manufacturers, wholesalers/distributors, and retailers. Journal of business
logistics, 30(1), 33-62.
Subhashini, S. (2016). An Outline of Reverse Logistics. The International Journal of
Business & Management, 4(2), 8.

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