Overview
Returns are a fact of every retail business and managing returns effectively can improve buying decisions and allocation of inventory, maximizing sell through. Toolio provides return profiles to plan for the effect of returns on both sales and inventory as well as accounting for delays in the processing of returns.
To create a return rate profile, navigate to Settings > Intelligence > Return Profiles and click Add
Name the return profile and set the following inputs
Return Rate - This is the expected number of units that will be returned after being sold, this will vary depending on the category and therefore different profiles can be defined.
Return Delay - The return delay estimates the time in weeks between a sale being made and returns typically coming back from customers.
Reuse Rate - The reuse rate defines the amount of returned inventory that can typically be sold again after quality review and repackaging.
Reuse delay - The reuse delay estimates the time in weeks between the units being returned and the ability to sell the units to customers again, this would include the time taken to process, QA and repackage/label the items
Note that if returns can not be resold, the reuse rate would just be set to 0%
Return Metrics
Return metrics are separated into Sales Returns and Returns (Inventory). The separation allows for the independent measurement of returns effect on Net sales vs the inventory effect of returns on EOP and thus receipt and transfer projection. In the example below, 10% of the sales are returned 1 week later with 50% of those returned units available in inventory the week after that.