Customer focus

Backtracking - the journey of an OTTO return

Editor Roman Oncsak

With more than 17 million items in its range and up to ten orders per second, OTTO is Germany's largest online store. It is to be expected that not every delivery meets the customer's expectations. That's why OTTO makes returns as easy as possible - and offers them free of charge. But what actually happens to the OTTO return after it has been handed in at the parcel store?

"Parcel for you!" - Motivated by the first rays of spring sunshine, Emma from Nuremberg found the new summer dress in the OTTO app and ordered it straight away in anticipation of the warm season. When she opened the shipping bag (made of 100% recycled plastic), she noticed that the colors matched the product image, the fabric was nice and the quality was high - so far so good.

However, when Emma tries it on, she realizes that she has made a mistake with the size: The dress is slightly too wide at the shoulders and a little too long above the knee. She decides to return the dress.

Returns registration uncomplicated and simple

Free returns are part of the business model in e-commerce and are a fundamental part of the customer experience - including at OTTO. Nevertheless, the company does everything it can to reduce unnecessary returns in order to minimize the impact on the environment. Where it cannot be avoided, Germany's largest online store makes it as easy as possible for its customers to return goods:

Emma simply registers the return of her summer dress in the OTTO app and receives a QR code. A printer is not required. She takes the parcel to the kiosk on the corner - one of over 16,500 parcel stores operated by OTTO's logistics partner Hermes. The owner scans the code, accepts the parcel and hands Emma the returns receipt. For her, the return is now complete. Her parcel, on the other hand, now goes through a meticulously thought-out logistics process that OTTO is constantly optimizing together with Hermes.

The OTTO returns route - rarely a straight line

After being dropped off at the parcel store, Emma's originally packed summer dress is first picked up by the logistics service provider and loaded onto the truck. Of course, this is not just for Emma's return shipment. Instead, the driver has delivered parcels during the day and now collects returns from the parcel stores along his route in the evening. In this way, OTTO avoids empty runs and reduces the total number of kilometers covered. Once fully loaded again, the van sets off for the nearest logistics location. Depending on the geographical location, this can either be a Hermes delivery base, the delivery base of a service partner or - as in the case of the summer dress - a depot. This is a central transshipment point for goods that are destined for further distribution. From there, it goes to the nearest logistics center and finally to the return location, where the returns are processed.

Cross-location returns processing at OTTO

The dress travels to Pilsen. One of the Otto Group's four returns locations is located there. A few years ago, OTTO relocated parts of its returns processing from its headquarters in Hamburg to the surrounding countries in order to keep the process in the scaled marketplace business economical. At the same time, OTTO is reducing the number of kilometers traveled. At around 200 km, the distance for Emma's summer dress to the neighboring Czech Republic is shorter than if it were sent over 600 km from Bavaria back to Hamburg. OTTO and Hermes Fulfilment will continue to handle large-volume items weighing up to 31.5 kg, such as "white goods" or televisions, in Germany, for example in Ohrdruf in Thuringia.

Recycling of OTTO returns

When Emma's return arrives at the OTTO returns center, it is first recorded using a barcode. The experts then check on site whether the enclosed label matches the item. The dress is then checked for damage and traces of trying on - for example, make-up on the collar. The zipper is also checked. Emma's dress has no defects and is classified as fully resalable.

Emma's return is not an isolated case: 95% of all returned items are as good as new and go straight back on sale. Around four percent of items are visually refurbished before being returned, for example by ironing or removing lint. In individual cases, items are completely cleaned. In the case of electronics such as TV sets, the experts check the functionality and remove fingerprints from the screen if necessary.

Only around 0.5 percent of returns can no longer be restored to as-new condition. Textiles are then often sent to wholesalers who sell second-hand goods. Electrical appliances are restored to working order in specialist companies or recycled sustainably.

The way back to sales

Parallel to the physical processing of Emma's return, the accounting process takes place. This means that the Nuremberg woman is immediately credited or refunded the purchase amount once the return has been successfully checked.

Once the dress has been found to be as good as new and freshly packed, it makes its way back to a Hermes warehouse, where it awaits delivery to the next customer.

And Emma? Fortunately, her dream dress was also in stock at OTTO in a smaller size and could be delivered straight away. So summer can come!