Returns Management Gets Smart

Retail forensics has turned the returns counter into a potential CSI episode—either a customer-service intervention or crime-scene investigation, depending on the individual case. Redmond, Wash.-based SIRAS, a wholly owned subsidiary of Nintendo of America, has developed a patented electronic-registration process that tracks the unique fingerprint of registered products. Peter Junger, president of SIRAS, talked with Chain Store Age senior editor Connie Gentry about how the process can simplify returns management, enabling the retailer to provide better customer service, identify fraudulent returns and address loss prevention.

#b#How does the SIRAS program work? 

When a registered product is purchased, the retailer’s POS system prompts the store associate to enter the product’s serial number and that unique serial number along with the UPC number are printed on the consumer’s receipt. The record of the transaction is captured at that POS register and the data is transmitted to the national SIRAS database. If the product is returned, then the store associate processing the return enters the serial and UPC numbers and instantly the record of the original purchase comes up.

#b#What if the person returning the product doesn’t have a receipt? 

The retailer can easily accommodate the return the same way, just by entering the product’s serial number and UPC number. When the information from the original sale appears, the system tells the associate the original sales data, such as date of purchase, as well as additional necessary information such as if the product is still covered by a manufacturer’s warranty. Typically, retail return policies expire after a certain date, so the associate can see if the item being presented for return is within the allotted time frame. However, if the product is outside the retailer’s return policy or was purchased from a different retailer, the system sends a code that stops the POS from accepting the return and alerts the associate to the exception. We call this process a “smart” return. The information provided by electronic registration and the “smart” return system can reduce returns by 30%.

#b#Does the SIRAS system keep personal data to help retailers identify “repeat” returners? 

We only collect product information. Personal data, such as the consumer’s name or credit-card information, is not captured. However, there are a number of ways our system integrates with loss prevention to identify fraud and deter theft. For instance, recently a retailer had a rash of returned iPods that consumers claimed didn’t work. Our system showed that each of the returned iPods had actually been purchased and returned in their original packaging a previous time, then resold. It turned out the first purchaser had removed the electronic chips inside the iPods, replaced the chips with ceramic tiles that were essentially the same size and weight as the electronics, and then resealed the packages so the product looked as if it had never been opened. Using our electronic registration and smart-return process, we were able to identify the exact time and location of the first purchase and the first return. We linked that information to the retailer’s surveillance cameras, which enabled law enforcement to identify the perpetrator.

#b#What products are best suited to the SIRAS program? 

We started with video games, consumer electronics and appliances—products that are serialized by the manufacturer and are costly returns. But serialization applies to a wide array of products that you might not expect, for instance sporting-goods equipment, vacuum cleaners and bicycles. Even items that are not traditionally serialized can benefit from this program and we work closely with manufacturers and retailers to add serial numbers on product packaging, close to the UPC number.

#b#Is there a price point where it makes the most sense for retailers to add serial numbers to SKUs and implement SIRAS? 

Very good question. We look at items that are priced under $50 more carefully than those priced higher. However, a $25 product with a high return rate could still show an ROI. From the retailer’s perspective, this is a very cost-effective solution because the product’s manufacturer usually carries the majority, if not all, of the cost of the service.

#b#Does the retailer have to modify its POS system? 

Most retail POS systems have an “exit-routine” feature that prompts the cashier to collect any necessary information, such as proof-of-age identification for restricted products like alcohol or tobacco. The POS system can be easily modified to include a prompt within that exit feature that alerts the associate to scan or enter the serial number.