UPS launches online returns service

Atlanta-based United Parcel Service of America Inc. today unveiled an online returns policy to help consumers -- and merchants -- deal with returns of goods purchased on the Web.

As consumers and merchants alike discovered during last year's holiday season, one of the biggest challenges to online shopping is how to make the return of an unwanted item as painless as possible for the shopper.

In a teleconference today, UPS said its new service, UPS Returns on the Web, will simplify the returns process for consumers as well as reduce the costs for merchants.

The automated, browser-based system provides consumers with an on-screen label they can print on standard paper directly from their PCs. They're also provided a list of nearby UPS drop-off locations and color maps to these locations. In addition, consumers can also hand UPS return packages to any of the company's 70,000 drivers, or -- based on the returns policies of the merchant -- a UPS driver can pick up a package at a consumer's home, a company spokesman said.

UPS spokesman Steve Holmes said when a customer activates the returns process by filling out a returns request on a merchant's Web site, an electronic request is sent to UPS's systems, which responds with the appropriate label. The label then allows the merchant to rout the package to the appropriate department or other destination.

For example, UPS said, if a customer returns a CD because he "changed his mind," the system will ship it back to the merchant for restocking. But if the CD was returned because it was defective, the system knows immediately to put the name and address of the manufacturer on the return label so it can be returned under warranty.

Once packages are shipped, shoppers can keep track of their packages directly from the merchant's site or from the UPS Website.

Online retailer Buy.com in Aliso Viejo, Calif., has been piloting the new service since June.

Ross McCullough, UPS vice president of e-commerce, said because of the service Buy.com Inc. has reduced its incoming returns calls by 40%. And, he said, Buy.com now provides its customers with labels that print in seconds. Previously, he said, customers would typically have to wait for up to a week for labels to be sent to them.

McCullough said the new service is hosted on UPS's computers. He said merchants are charged a transaction fee for each return in addition to transportation charges, which are billed once the merchant receives the returned item. Transportation charges are paid by the consumer or the merchant, based on the merchant's stated returns policy.

UPS said it is accepting a limited number of customers from now until the end of the year and will expand the service during the first quarter of 2001.

UPS said its service differs from the service offered by other package carriers in a number of ways. First, UPS allows customers to track their packages, which some carriers do not. In addition, it allows consumers the convenience of printing the return labels themselves and dropping off their packages at drop-off locations or handing them to UPS drivers rather than having to wait for a driver to come to their homes and print out the labels for them.

"This is exactly what UPS should be doing," said transportation analyst Donald Broughton at A. G. Edwards & Sons Inc. in St. Louis.

Broughton said one of the consumer-related issues online merchants have to address is how to make it easier for consumers to return unwanted items they purchased online.

"It's a real hassle for consumers to return stuff they bought from an e-commerce site," he said. "This [new service] addresses that point. It looks like it takes away some of the hassles of returning goods purchased online. And anything merchants can to do make it easier for consumers to return items, they should do. Consumers will choose the least painful way of returning an item, and what they feel is least painful has more to do with [eliminating] the hassle and cutting down on the time it takes to do it, and not the cost."

Broughton said the test of whether or not UPS is on target with its new service will be determined by how quickly and if rival FedEx responds.

"If FedEx fine-tunes and remarkets its returns service to answer UPS's announcement, then UPS will know it was on target," Broughton said. "If FedEx doesn't respond, then UPS didn't gain a lot of traction [with the announcement]."

In contrast to UPS's system, Memphis-based Federal Express Corp.'s 3-year-old Net Returns service doesn't allow consumers to initiate a return request over the Internet or print return shipping labels from their PCs. Instead, they must make contact via telephone with a particular merchant using FedEx's service.

Jeff Maddock, FedEx's manager of reverse logistics, said the merchant processes the return request and schedules a package pickup at a customer's home or office by a FedEx courier, who then prints out the return shipping label.

Maddock said merchants are able to route packages to their destinations, and both merchants and consumers are able to track returned packages.

He confirmed that FedEx is working on enhancements to its current returns system, although he wouldn't go into detail.

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