Legitimate concern: Electronic registration stops fraudulent returns without compromising consumer privacy
Bill Atkinson, contributing editor -- Manufacturing Business Technology, 8/27/2008 11:00:00 AM
A study released at the first of the year by New York-based Accenture claimed the electronics industry alone experiences product returns—legitimate and otherwise—of approximately $14 billion a year.
That’s why manufacturers and retailers must be able to track products throughout their life cycles to ensure only authorized returns and in-warranty work are processed—and be able to do so without infringing on consumer privacy concerns.
SIRAS offers an electronic registration system that tracks merchandise to the item level. It tracks product data only—not consumer data—at the point of sale (POS) or via pre-registration as a means to control and prevent fraudulent returns, and validate warranties.
The technology uses a combination of the UPC and serial number to establish a “unique fingerprint” for each product. When the product is scanned, pertinent information is appended to the transaction and sent to a centralized database maintained by SIRAS. Information includes UPC, serial number, store number, date, and transaction number.
If a product is returned to the retailer, information on when and where the product was purchased is pulled from the database. The retailer can then decide if it is still eligible for return or under warranty.
“If a customer wants to return a product to the manufacturer for warranty work, the manufacturer can key in the serial number,” explains Peter Junger, president of SIRAS. “This bounces off our database and immediately populates the manufacturer’s screen with the date the product was purchased, which retailer, and if the product is still under warranty.”
The technology prevents fraudulent and unwarranted returns, simplifies returns reconciliation, prevents cross-retailer returns, avoids free trade-ups to newer technology, and validates warranty entitlement. And since the system identifies only the product, it provides full anonymity to customers.
Retail customers include Wal-Mart, Target, and Kmart, while major manufacturing customers include Brother, Electrolux/Eureka, GE, Hewlett-Packard, Magnavox, Panasonic, Philips, RCA, and Schwinn.
“Through SIRAS, Philips has found the first new and effective uniform returns-management technology,” states Tony Sciarrotta, director of product returns for Philips. “Philips and its retailers have access to factual data pertaining to return and warranty/repair policies to help enforce established policies.”
According to Sciarrotta, the consistent data that is available determines the appropriate disposition of products presented for return or repair. “Additionally, the same database information supports call-center and warranty-service management, while reducing costs associated with handling returns,” he says.
While SIRAS and the retailers are responsible for most of the daily activity, manufacturers that use SIRAS must initially meet some basic requirements, as outlined in the SIRAS certification document.
“This contains serial number format, bar-code, and label specifications that manufacturers will need to be in compliance with when they use SIRAS,” explains Junger. “For example, the serial number needs to be located near the UPC bar code. In addition, print quality is important to eliminate the need for multiple scans at the POS system.”
While SIRAS utilizes bar-code technology today, Junger notes, “When RFID is ready for ‘prime time,’ SIRAS will be able to make the transition seamlessly from bar code to RFID.”
