Finance

Incentivize end-of-life returns

To close the loop, there must be an incentive for all players in the value chain. Product manufacturers gain many benefits from collecting used products, parts and materials that may reduce the cost of goods sold and increase profit margins. Identifying the right partners may create additional value, such as resource management companies, NGOs and local authorities.

The number and quality of returns are determined by the value created for the consumer or party returning the item. Incentive structures depend on the product, relationship with the consumer, reverse logistics program, commodity prices and geography. There are several incentive structures that provide direct value to the consumer, for example:

  • Discount on replacement product
  • Cash or equivalent
  • Recognition
  • No hassle pickup