An Interesting Green Map

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Retail Industry's Return Policy - Impact on the environment

Retail industry is in a never ending race to keep prices low and remain competitive and appealing to customers. In reality, operational costs and other capital costs are always rising and never come down. However retailers are forced to remain competitive (quality and price), in addition to providing a set of perks to customers.

One such perk being the return policy. Let us try evaluating the impact of one returned good on the environment.

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Each time a consumer walks in to return his purchase, he gets his money back.Examining the retailer's side of the story - allowing customers to feel empowered means ensuring themselves (retailers) a loyal customer base and also a possible increase in the number of customers. It sounds like a win-win right !! Rather, the actual story may be otherwise. All this has a cost, in terms of economics and the environment.

One of the three things is what happens to the product.

• It is dumped in a trash can if it is a produce or a consumable,
• sent back to the supplier if the product is faulty
• goes back to the shelf for a reduced (open pack) price. 

Any of these scenarios translate into a financial strain on the retailer. Most retailers try to maintain a customer friendly return policy and allow return of a product in the most deplorable state. Though this looks appealing in the short term, both the customer and the retailer lose in the long run.

How does this happen?
Every return adds up to the operational and overhead costs for the retailer. By law, retailers and suppliers have a limit on the number of products they can account for as write-offs. They have to consider logistics cost and stocking/inventory management of the returns before they are sent in through the proper channels (as mentioned above). All this means added costs for retailers/suppliers and a an inevitable struggle to remain competitive in a cut throat franchisee environment. This could mean quality deterioration. Although consumers may not observe sudden drop in quality, it does happen over a period of time. Every retailer tries to increase pressure on the suppliers, manufacturers and transporters to keep costs low. But  that doesn't happen always. At least a part of the costs have to be borne by the retailers themselves. That means costs are invisibly passed onto consumers. Thereby we, as consumers, have unknowingly increased the future costs for ourselves.

Impact on the environment...
Let us look beyond our wallets and assess this issues in terms of impact on the environment. Environmental costs associated with every product begins from its source of raw material, adds up through the entire value chain and ends with its consumption and disposal of packaging products. Use of non bio-degradable products adds to the stress on the environment as they are here to stay - forever!

For a product to qualify as being environment friendly, it needs to be green at every stage in supply chain/value chain.

As I mentioned in one of my earlier posts, manufactures and retailers are supposed to account for the impact their product has on the environment, this process is environmental accounting. Every Enterprise Resource Planning software has a provision for this accounting process. I have my own doubts whether a profit-oriented organization will ever look into the environmental aspect seriously. Eco-impact calculators are supposed to be a part of every audit which happens in companies. What bothers me is if they ever look at these modules beyond their computer screens and the spreadsheets.

What we could do...
We as consumers can work on our consumption patterns and think twice before billing a product. It is difficult to see why many Indian friends of mine have eased themselves so well into this binging mentality. Indian retail industry never allowed for returns or even exchanges in some cases. Consumers have to be conscious of what they buy. What I cant come to terms with is the way Indian consumers behave in the USA. Cheap and shady behavior of (Indian) consumers in the US, and things they get away with is shocking. Does it never occur to them that it is going to come back to them (in true economic sense). That is how economics works!...and it doesn't take an Amartya Sen to understand this.

Do we need to add more than the usual to this?

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Organic food in plastic packaging?!!

Organic produce and food products are a nice buy..keeps one thing off your mind - all the pesticide residue. But is it not an oxymoronistic approach to sell organic and other "green" products in a non bio degradable plastic package?

What is the idea behind all the reams of plastic which went into packaging them? I have no clue...I don't expect things to be clear cut black and white but this packaging issue is stretching things too far!!!!! (Not that its ok for other products to be stuffed in plastic bag/wraps to be shelved in a retail store.)

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We cannot justify these pre cut organic fruits being sold in ridiculous individual packs. Even the most popular organic food stores indulge in this kind of mockery of green issues. Are they ignorant or do they just don't care?...It must be fun to meet all those who are into planning and execution of product packaging decisions in these organic and eco friendly companies. I really need to ask them one thing... how do these aisles in organic food store qualify as eco-friendly?

Most argue about the strain green packaging would put on the environment...but is it necessary to add more indigestible plastic junk for the planet to bear? Another arguement is of the corn plastic - the amount of money, effort and the resources which go into producing a single corn plastic container is not worth the effort.

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 I don't know if it is just me or if there are others out there who are bogged down by guilt while buying groceries and other processed food. Its like an anti-thesis when companies which claim to sell organic produce and products, say even cosmetics, don't think twice before investing in plastic and other non-eco-friendly packaging material. I know I have cribbed and whined about this earlier.

Enormous demand for products and produce results in a significant strain on the environment, and then,  choosing paper or other eco friendly packaging material only adds to the planet's travails. However, when we weigh the pros and cons of going green and remaining economical, green idea wins- always. It is necessary to understand one base rule - any polymer based synthetic good produced is never going to decompose or biodegrade. However expensive it may be, earth friendly is the way to go (with the packaging as well). Smallest things like the plastic lid cap on glass bottles and jars matter to me. If an item on my grocery list is unavoidable, then I ensure that the jar I buy has a metal cap and not a plastic one....How many of you freak out like I do?

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Any inputs - welcome!!!!

I do not buy these plastic wrapped fruits and vegetables and feel good about not adding some more plastic to the environment.

We need to remember that each product we try, buy and consume is a vote of approval for the company to mark that product as a "success". So think before you try out a new product, be it consumable or other wise...your vote makes a difference. Simple things like making a choice between -

this jar 

and this

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 When the sales go down, these companies are forced to change their strategy and cater to what we consumers demand...Time and again I have been mentioning this - we are at a stage where we are only making trade offs. Living green is a long winding road for the civilized world..the least we could do is to start making a difference...(I make a special mention of this thanks to all the flaky criticism  I put up with due to my green advocacy).

So the next time you are in a super market aisle, make an intelligent choice and Keep the planet happy!

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