Issue 13
Five roommates can each pay their share of the electric bill on time and still have no idea what the household owes. Nobody’s hiding the total, but nobody’s ever added it up, so they’re guessing at the total spend.
That’s how most returns budgets work.
Antonio Colicchio built the first-ever Returns, Fraud, and Abuse department at a major global apparel retailer. His read is that while most retailers can name exactly what one department spent on returns, almost none can name the total.
It’s not impossible to find, and he’s got three questions to help guide you towards the answer.
But first, your industry brain teaser of the week:
What percentage of frequent returners have stopped buying from a retailer entirely because of its return policy?
Scroll to the bottom for the answer.
What's in stock
Here’s what we have in store for you this week:
- The Rundown: The three questions that reveal who should be accountable for your returns budget
- Worth Your Time: What CFOs and retailers are watching heading into Q4
- What We’re Up To: See you soon, Dallas! And if you can’t make it IRL…
The Rundown
Most CFOs can name what the supply chain spends on processing returns. But how many can name what the company loses to product depreciation, appeasements, fraud, or customers who stop coming back?
That number is hard to find because parts of the answer live in five different departments, and each one measures returns in its own currency. Cost per return processed. Resolution time. Fraud caught against false declines. Five reasonable requests arrive on the CFO’s desk, and none of them add up to the same total.
Colicchio is one of the only VPs of Returns in the industry, and these questions come from actually sitting in that seat.
Here are the three he works through before assigning a budget line or a title:
- What’s the total returns cost, not just processing cost? Most retailers measure one line item and call it done.
- What percentage is controllable? Colicchio estimates 30 to 50 percent of returns trace back to decisions retailers make themselves, and believes the real number could be even higher.
- Who’s accountable for the total outcome, and do they have the authority to act on it? Every function should keep owning its own piece. Somebody still has to answer for what the pieces add up to.
For a $4 billion retailer, the answer to that first question alone can run up to almost a billion dollars, a number most CFOs never scrutinize the way they scrutinize comp sales.
His full playbook walks through all three questions, and explains what it takes to structure ownership once you have the answers.
Worth your time
We know time is money, so we won’t waste yours
- Return costs don’t sit in one line on the P&L. They scatter across disposal, reverse logistics, restocking, and shrink, which is why most CFOs can’t see what returns really cost them. (CFO Brew)
- 9% of all returns are now fraudulent, and counterfeit decoy returns are among the hardest tactics to catch.(Loss Prevention Media)
- European PE-backed companies now rank operational improvement equal to revenue growth as a top priority. (CFO.com)
- Restaurant fraud is spreading across drive-thru, app, and delivery channels, and each one needs its own detection logic to catch it. (Hospitality Technology)
What we're up to
The Dallas roadshow is less than one week away on October 14, and we’re gearing up for a jam-packed event that brings together leaders across LP, Ops, Ecomm, IT, and Finance. We’ll be joined by speakers from several of our customers, including At Home, Foot Locker, and Burlington, who will share their inside scoop on what it looks like to tackle Total Retail Loss in today’s retail environment. We still have a few last minute spots open — see the full agenda and register here.
Can’t make it to Dallas but still looking for ways to connect with Appriss? Our virtual Product Roadmap Webinar is taking place on Tuesday, October 20. Attendees will get a first look at recent updates to the platform and what’s coming next, along with live demos and Q&A with our product team. Sign up here and join us live (or don’t, and we’ll still send you the recording).
