Sustainability? Consumer electronics industry faces $17 billion returns bill

Only 5 percent relates to faulty products. A good chunk is spoiled, fickle consumers. 'Wah wah, my iPod's the wrong color.' Huge eco, business costs. Oh what $17 billion could buy. Merry Christmas!
Written by Mark Halper, Contributor on

The U.S. consumer electronics industry faces a $17 billion bill for returned products this year, yet only 5 percent of that will relate to faulty goods.

According to research by consulting firm Accenture, 27 percent of the returns will tie into "buyers remorse", and 68 percent will fit a category called "no trouble found." My interpretation: the industry is paying a huge price to support spoiled and fickle consumers, as in, "Wah wah, I wanted a blue iPod, not a white one," and "Why did I get an XD when a I wanted an XS?"

To be clear, that's not exactly Accenture's translation. The "no trouble found" group seems to describe people who couldn't get their device to work. Accenture rightly points out that industry needs to improve usability.

But let's face it, consumers in the cry baby economy say anything when they return items. "No trouble found" in many cases will be a euphemism for "woops I changed my mind." The "buyers remorse" group isn't even a euphemism. I'll take an educated guess - probably a low one - that $10 billion of the returns relates to pampered purchasers.

As Accenture notes in so many words, this all wreaks havoc on the environment. "These costs include receiving, assessing, repairing, reboxing, restocking and reselling returned products," Accenture says in a press release. The subtext  of this is that companies and consumers waste gasoline, packaging and materials, not to mention precious time and other resources.

From a business perspective, "These high consumer electronics return rates are unsustainable in a sector with brutal competition and thin margins,” says Mitch Cline, managing director of Accenture's electronics and high-tech group.

According to an Accenture report called "A Returning Problem: Reducing the Quantity and Cost of Product Returns in Consumer Electronics", the $17 billion bill will be 21 percent higher than in 2007.

Just think what $17 billion - or even the $10 billion cry baby portion - could contribute to, say, developing clean water systems in Africa.

Merry Christmas!

Image: Mike Licht/NotionsCapital.com via Flickr

This post was originally published on Smartplanet.com

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