Recently read a post from someone in the CPG industry commenting on a product they bought at their supermarket – a national brand. They didn’t like it. They mentioned they took it back to the store to get a refund.
Of course, the retailer will take it back – they do not want to lose a customer. However, it’s not their issue that he/she didn’t like it. They send to the reclamation center (there’s costs here). The reclamation center has to get rid of it. Empty it, recycle the container, whatever. More costs. They will send the charge to their HQ. Then it will get deducted from the distributor – there are admin charges here at 3 levels. store, HQ & distributor.
This will happen a bunch of times (I hope not from others in our industry) and there will be a deduction off an invoice back to the brand. The finance team spends more time. Eventually it hits a line on the P&L significantly higher than the cost of making the product. And folks will start commenting on all the excess charges from retailers & consumers. Yes, it’s real and yes, it needs to improve at some point, but that’s the reality today.
The wacky part is this whole process here was started by someone who should know better. Probably could have saved that brand $15 by tossing the $.50 unit of product in his own recycling bin!
Thought it might make for some light reading…