Procurement Glossary
Returns process: Systematic returns processing of goods in Procurement
November 19, 2025
The returns process comprises all systematic steps for the return and processing of goods that do not meet the agreed specifications or have to be returned for other reasons. In procurement, this process plays a central role in quality assurance and cost optimization. Find out below what makes up the returns process, which methods are used and how you can minimize risks.
Key Facts
- Structured process for returning faulty or unsuitable goods to suppliers
- Includes inspection, documentation, transportation and cost accounting of returns
- Direct impact on storage costs, liquidity and supplier relationships
- Integration into ERP systems enables automated processing and tracking
- Legal basis defined by warranty and sales contract law
Contents
Definition: Returns process
The returns process describes the systematic procedure for returning goods to suppliers if they do not meet the agreed quality, quantity or specification requirements.
Core elements of the returns process
A structured returns process comprises several coordinated components:
- Error identification and documentation for incoming goods
- Checking the return authorization based on contract conditions
- Coordination with suppliers regarding return shipping methods
- Logistical processing and cost allocation
Differentiation from related processes
In contrast to the complaint report, which primarily focuses on the communication of defects, the returns process includes the complete physical and administrative reversal. The credit note is often the final element of the financial settlement.
Importance in Procurement
Efficient returns processes reduce capital commitment, minimize storage costs and strengthen the negotiating position with suppliers. They are an integral part of quality management and contribute to the optimization of order processing.
Methods and procedures for returns processes
The systematic implementation of returns processes requires structured methods and clear procedures that guarantee efficient processing.
Standardized test procedures
The implementation of uniform inspection criteria for incoming goods with QA inspection forms the basis for objective returns decisions. Defined tolerance ranges and quality standards are applied.
- Visual check for damage and completeness
- Function test for technical components
- Documentation with photos and test reports
Digital workflow integration
Modern returns processes use digital workflows to automate recurring tasks. Integration into existing handling processes enables seamless transitions between process steps.
Supplier coordination
Structured communication with suppliers takes place via defined channels and escalation levels. Return authorizations are obtained and transport modalities are clarified to ensure smooth processing.
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Key figures for controlling
The systematic measurement and monitoring of returns processes requires meaningful key figures that enable data-based control and continuous improvement.
Quantitative performance indicators
The returns rate as the ratio between returned and delivered goods forms the basis for evaluating supplier quality. In addition, the average processing time measures the efficiency of internal processes.
- Return rate as a percentage of total deliveries
- Average processing time per returns case
- Cost ratio for returns processing
Quality-related metrics
The categorization of reasons for returns enables targeted improvement measures for suppliers and internal processes. Both supplier-related and process-related causes are systematically recorded and evaluated.
Financial performance indicators
Monitoring returns costs and their impact on overall procurement costs supports strategic decisions. Key purchasing figures are expanded to include returns-specific aspects in order to enable a holistic assessment of procurement performance.
Risks, dependencies and countermeasures
Returns processes harbor various risks that can lead to considerable costs and operational disruptions without appropriate control.
Operational risks
Unclear process definitions and a lack of standardization lead to inefficient processes and increased processing times. Inadequate documentation makes tracking difficult and can cause legal problems.
- Delays due to unclear responsibilities
- Double processing and media breaks
- Loss of goods during the returns process
Financial dependencies
High return rates put a strain on liquidity and can lead to bottlenecks in procurement. Dependence on supplier cooperation for credit notes increases the risk of default and can have a negative impact on payment targets.
Preventive measures
Systematic supplier evaluation and clear contract design preventively reduce the risk of returns. Integration into escalation processes ensures rapid problem solving in critical cases and minimizes operational effects.
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Practical example
An automotive supplier implements a digitalized returns process for electronic components. After goods receipt, defective components are automatically recorded using QR codes and documented in a workflow system. The system automatically generates return slips, coordinates the return with the supplier and tracks the status until the credit note is issued. This systematization has reduced processing time by 60% and significantly improved transparency.
- Automatic damage detection on receipt of goods
- Digital documentation with photo and data capture
- Workflow-controlled supplier communication and processing
Current developments and effects
The returns process is subject to continuous change due to technological innovations and changing market requirements, which open up new opportunities for optimization.
AI-supported automation
Artificial intelligence is revolutionizing returns processing through automated damage detection and decision-making. Machine learning algorithms analyze images and data to classify reasons for returns and reduce processing times.
- Automatic image recognition for damage assessment
- Predictive analytics for returns forecasting
- Intelligent routing algorithms for optimal processing routes
Sustainability aspects
Environmental awareness and the circular economy are increasingly influencing the design of returns processes. Companies are developing strategies for the reuse and recycling of returned goods in order to minimize the waste of resources.
Blockchain-based transparency
Blockchain technology enables seamless tracking of returns processes and creates trust between all parties involved. The unalterable documentation of transactions reduces disputes and significantly speeds up processing times.
Conclusion
The returns process is a critical success factor for efficient procurement organizations that has a direct impact on costs, quality and supplier relationships. Systematic digitalization and AI integration can significantly reduce processing times and improve transparency. The strategic importance lies in preventative quality assurance and the optimization of the entire supply chain. Companies that understand returns processes as an integral part of their procurement strategy achieve sustainable competitive advantages.
FAQ
What does a complete returns process involve?
A complete returns process includes the identification of defects, documentation of deviations, communication with the supplier, physical return of the goods and final financial processing through credit notes or replacement deliveries. Integration into existing ERP systems ensures seamless tracking of all process steps.
How is the efficiency of returns processes measured?
Efficiency is primarily measured using the average processing time, the returns rate per supplier and the costs per returns case. In addition, quality indicators such as the success rate for credit note negotiations and customer satisfaction during processing are taken into account. These key figures enable the continuous optimization of processes.
What legal aspects need to be considered for returns?
Returns processes are subject to the statutory warranty provisions and the individually agreed contractual conditions. Important aspects are return deadlines, distribution of the burden of proof in the event of defects and the bearing of costs for returns. Clear contractual regulation of these points minimizes disputes and speeds up processing considerably.
How can returns costs be minimized?
Returns costs can be reduced through preventative quality assurance at the supplier, clear specifications in orders and systematic supplier evaluation. In addition, digitalized processes help to reduce costs through automation and improved transparency. Close cooperation with logistics service providers also optimizes transport costs for returns.
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