Returns can enter the supply chain from various entities, namely manufacturers, distributors or customers (Gilanli, Altug & Oguzhan 2012:393; Lambert, Riopel & Abdul-Kader 2011:562). Manufacturer returns include cases where products have failed quality checks and need to be reworked to a specific standard, whereas distribution returns normally take the form of product recalls, where products are recalled because of health and safety reasons (Carrasco-Gallego, Ponce-Cueto & Dekker 2012:5582; Chopra et al. 2012; Zhao, Li & Flynn 2013:115). Customers, by means of reimbursement guarantees, warranties or full exchange discounts, initiate customer returns (Bernon, Rossi & Cullen 2011:486; Holweg, Teller & Kotzab 2016:639).

Product returns make up the genesis of the RL process, which then form a number of sequential processes (Bernon et al. 2011:491; Silva et al. 2013:379). A request for return usually initiates the RL process, where one of the various entities communicates with a supplier or distribution centre (DC) to return the product (Bernon et al. 2011:491; Tan & Chanchaichujit 2016:11). A gatekeeping process is then undertaken, where the organisation will authorise a return, as well as the sharing of information regarding that return (Badenhorst 2016:3; Tan & Chanchaichujit 2016:11).

Once authorisation is provided, the returned products are delivered to the applicable facility for inspection, sorting and disposition (Lambert et al. 2011:561; Rogers, Melamed & Lembke 2012:108). More detailed inspections of the product will then take place to evaluate its quality, and a sortation process will categorise those products for use in further processes (Agrawal, Singh & Murtaza 2015:77; Rogers et al. 2012:108). The products then follow a disposition strategy where they are reused, recovered or wasted (Akdoğan & Coşkun 2012:1642; Hazen, Hall & Hanna 2012:248).

Direct reuse simply means that products can be resold in their current condition or reused for a purpose similar to the one it was designed for (Hazen, Cegielski & Hanna 2011:375; Hazen et al. 2012:248). Detailed inspections and manipulations are conducted in order to evaluate the functioning or quality of the products under consideration (Hazen et al. 2011:375, 2012:248). Products will be reused, repackaged or sold off to the second-hand market within this process (Akdoğan & Coşkun 2012:1643; Lambert et al. 2011:562).

Repackaging normally takes place where the original packaging gets damaged and is then restored or reworked, in order for it to conform to a specific standard, thus maintaining the organisation, as well as the products image (Arrieta 2015:16; Holweg et al. 2016:650). Products that have been damaged at a retail or DC level may also be reused in other areas of the organisation, for example, an in-store bakery (Holweg et al. 2016:651). It is also possible to sell the returned items to the second-hand market at a discounted rate, which may include sales to staff, pig farmers or other third parties (Badenhorst 2016:3; Silva et al. 2013:379). When none of these actions are undertaken, the product recovery process will then take place.

The recovery process recovers any potential lost cost by recovering as much value as possible from the returned products (Hazen et al. 2012:249; Lambert et al. 2011:561). Products can be recycled, which entails recovering or extracting recyclable materials for reuse at a later stage (Akdoğan & Coşkun 2012:1643; Chan et al. 2012:1324). Products can also be reworked, which entails repackaging or refurbishing items into saleable batch or pallet sizes within the DC (Arrieta 2015:13; Dat et al. 2012:6381). Products could also be repaired or remanufactured to recover value; however, these two functions will not be applicable for this study because of the nature of the products and organisations that are going to be investigated (Chan et al. 2012:1324; Lambert et al. 2011:562). If value recovery is not a viable option, the products will be further disposed into waste management.

At any stage of the RL process, an organisation may decide that the products have no residual value, are obsolete or unsalvageable or are not safe to consume, leading to the dumping of those items at a landfill (Arrieta 2015:13; Dat et al. 2012:6831). A landfill is a controlled environment where waste can be dumped and covered by earth in a safe and legal manner (Khor & Udin 2013:73; Kinobe et al. 2015:82). Dumping of products is usually undertaken when those products are not safe to consume and where the organisation would prefer to protect their image (Kinobe et al. 2015:82; Rogers et al. 2012:107). If products are safe to consume, but the organisation has no value for them, they will be donated to charities, welfare organisations or the community, free of charge (Holweg et al. 2016:650; Negi & Anand 2014).

Internal drivers of RL practices relate to the factors that motivate the organisation to have an RL operation, by increasing revenue and profit through cost-saving initiatives (Hsu, Tan & Mohamad Zailani 2016:88; Stoyanov 2012:12). The following section discusses the possible internal drivers to RL practices.

Economic drivers: Traditionally, organisations had an open-loop supply chain that focussed mainly on the forward flow of products and services; however, in today’s organisations, incorporating RL practices into a closed-loop supply chain may allow for cost saving and revenue opportunities (Das & Dutta 2013:725; Zhou et al. 2011:352). Recapturing the value of returned products through reuse and recycling serves as a revenue enhancement opportunity for organisations (Govindan, Soleimani & Kannan 2015:603; Nikolaou et al. 2013:173). RL practices, such as recycling, have been receiving increased attention, as opportunities to reduce the cost of production using recycled inputs exist (Choudhary & Seth 2011:4988; Huang et al. 2013:515; Lee & Lam 2012:591). In a highly commoditised industry where repurchase behaviour is determinant on price, using RL practices to create cost savings is a critical tool (Marchi et al. 2013:70).

The second-hand market also offers cost-saving opportunities, as product returns can be sold to consumers at lower prices after being returned, reducing those products’ potential lost cost (Lee & Lam 2012:591; Rogers et al. 2012:108). For example, passed sell-by-date products at retail stores may be sold to employees at discounted rates, allowing for some product-related cost recovery (Alexander, Gregson & Gille 2013:475). Alternatively, providing backhaul services for suppliers can also be a method for an organisation to generate additional revenue streams (Larsen & Jacobsen 2016:787; Nikolaou et al. 2013:173).

Competitive drivers: RL practices allow the organisation to remain competitive by reducing inventory levels through product recovery, thus reducing the organisations’ inventory carrying costs (Barcos et al. 2013:582; Lee & Lam 2012:596). In a highly commoditised industry, using recycled inputs will allow the organisations to lower the cost of products and remain competitive in the industry, while satisfying customers through lower prices (Chan et al. 2012:1320; Mafakheri & Nasiri 2013:187). RL practices such as reuse, remanufacturing and recycling allow organisations to improve their image among customers, by maintaining an environmentally sustainable image (Chan et al. 2012:1320; Zhang, Zhou & Leromonachou 2013:111). According to Wang, Zhou and Ren (2010:336), customers may show an organisation preference when they have environmentally sustainable practices over the organisations that do not perform such RL practices.

Operational performance drivers: By effectively managing RL practices, organisations can reduce transportation, waste disposal as well as inventory carrying costs (Dües, Tan & Lim 2013:96; Sobral, Sousa Jabbour & Chiappetta Jabbour 2013:70). Returned products that are reinserted into the forward flow can allow the organisation to generate additional revenue, reduce operating costs and minimise the opportunity costs of disposing defective or obsolete products (Dües et al. 2013:96; Sobral et al. 2013:70). The above-mentioned RL practices allow the organisations to conserve resources and lower their resource investment, thus allowing for the conservation of inputs and an overall increase in the organisations’ operational efficiency (Govindan et al. 2012:204; Lai & Wong 2012:268). The increase in operational performance may enable organisations to gain a competitive advantage over their rivals (Rahman & Subramanian 2012:240; Lai, Wu & Wong 2013:106).

External drivers of RL focus on the triple bottom line, and typically enable the organisation to enhance customer value perceptions (Diabat & Govindan 2011:661; Stoyanov 2012:12). The following section discusses the possible external drivers for RL practices.

Legal drivers: It has become increasingly common for countries to enforce extended producer responsibility laws that pertain to the manufacturer’s responsibility for handling the cost of disposal, collection and reuse of end-of-life products (Alumur et al. 2012:67; Lamsali 2013:33). Strict environmental legislation on hazardous substances, packaging waste and the recovery of packaging material are enforced to hold producers responsible for the product during the entire product life cycle (Nikolaou et al. 2013:173; Zhang et al. 2013:110). These laws are therefore driving forces behind RL operations, in order for organisations to avoid prosecution (Atasu & Subramanian 2012:2; Kannan et al. 2012:75).

In the grocery retail industry, food quality and safety can have a major implication on customer health; thus, proper product disposal is essential for reducing any customer-related health issues (Aung & Chang 2014:173; Manzini & Accorsi 2013:251). Defective products may harm consumers; therefore, it is critical to enforce high-quality product standards (Atasu & Subramanian 2012:2; Kapetanopoulou & Tagaras 2011:152).

Environmental drivers: Environmental management is a key strategic issue that has the potential of impacting organisational performance (Dey, LaGuardia & Srinivasan 2011:1248; Diabat & Govindan 2011:659). Recently, a culture of consumerism ideology has contributed to a large amount of waste, thus putting stress on resource sustainability (Arrieta 2015:1; Nikolaou et al. 2013:178). Product recovery may reduce the effect of this ideology, by recycling or reusing products, in order to reduce the amount of packaging and waste (Arrieta 2015:1; Nikolaou et al. 2013:178). Using recycled or recovered materials for inputs allows the organisation to reduce their carbon footprint and save on energy costs (Dey et al. 2011:1248; Diabat & Govindan 2011:659). Furthermore, reuse, recovery and effective waste management may enable the organisation to improve their image, as customers are more sensitive towards environmental issues and sustainability (Bernon et al. 2011:494; Zhu & Geng 2013:6). For example, RL practices contribute to environmental improvement by reducing the energy use and (CO₂) emissions per item, as well as the road vehicle kilometres per sale (Nikolaou et al. 2013:178).

Social responsibility and corporate citizenship drivers: Corporate social responsibility is a professional code of conduct that is enforced because of customer pressure or stakeholder demands (Öberseder, Schlegelmilch & Murph 2013:1840; Pishvaee, Razmi & Torabi 2012:1). A sustainable image is essential when producing or marketing a product; thus, enforcing RL practices enables organisations to maintain a favourable public image and increase customer loyalty (Eltayeb & Zailani 2011:382; Lamsali 2013:34). Increases in governmental and societal demands for sustainability present a need for green principles to be present in every aspect of an organisation (Eltayeb & Zailani 2011:382; Lamsali 2013:34). For example, an organisation may receive pressure to increase the amount of recycling and production of biodegradable products, which helps improve the sustainability of the environment (Bhattacharjya, Baruah & Satapathy 2015:432; Rahman 2013:2).

An internal barrier relates to a hindrance within the organisation that affects the performance of RL practices (Abdulrahman et al. 2014:461).

Lack of functional integration: RL practices often suffer from a lack of functional communication and cooperation (Abdulrahman et al. 2014:463; Sharma et al. 2011:102). Internal integration builds on the premise that various functions in the organisation should work collaboratively as a single entity, ensuring that mutually acceptable outcomes are achieved and contribute to the continued success of the RL practices (Bernon et al. 2013:601; Hazen et al. 2012:247). Differing views on the importance of RL are, however, shared; resulting in poor functional integration, as well as higher product return rates (Abdulrahman et al. 2014:466; Bernon et al. 2011:485; Ye et al. 2013:140). If the functions that are involved in RL practices do not understand the end goal of RL, competing goals and objectives will be set across departments (Badenhorst 2013a:54).

Top managements posture on Reverse logistics: Management may also not be committed to RL because they are not aware of the resulting benefits that could accrue (Hazen et al. 2012:248; Ho et al. 2012:33). Top managements posture and role in the decisions ensure congruent views on RL, allowing for the appropriate resources to be dedicated to the effective performance of RL practices (Creutz & Larsson 2012:27; Ye et al. 2013:134). In order to gain organisational benefits from RL practices, RL experts who are personally committed and responsible for the creation and implementation of RL strategies should be placed in the organisation (Ho et al. 2012:33; Vijayan et al. 2014:19).

Financial barriers: Lack of initial capital and funds for returns monitoring systems, storage and in-house handling of returns are a major barrier to RL practices (Abdulrahman et al. 2014:461; Sharma et al. 2011:102). Conducting RL practices are a precarious endeavour for top management, as they involve financial aspects that may impact the organisations’ long-term performance (Ganjali, Shirouyehzad & Shahin 2014:52). The information systems that are critical to track and trace product returns and recoveries are critical to the success of RL operations, but require large amounts of capital and resources to implement and maintain (Bernon et al. 2011:495; Ho et al. 2012:33; Sharma et al. 2011:103).

An effective RL operation requires personnel to be trained; however, this training requires financial support that the organisation may not possess or want to dedicate to RL, thus creating great difficulty in managing the RL practices (Sarkis, Zhu & Lai 2011:8; Sharma et al. 2011:102). Education and training are major requirements for success in an organisation; therefore, the more well-trained staff available, the greater the efficiency of the RL operation (Creutz & Larsson 2012:13; Sharma et al. 2011:102).

Lack of sufficient information systems: Implementing and maintaining a product return system requires strategic planning and investment in additional facilities, personnel and operating activities, which is ultimately viewed as a costly sideshow, especially if the products are not saleable afterwards (Piplani & Saraswat 2012:1428; Ye et al. 2013:135). The lack of or incompatibility of information technology systems to effectively transfer product return information between the involved parties acts as a major barrier to RL practices, as the data quality and responsiveness of partners are compromised when returns have to be handled manually (Bernon et al. 2013:601; Ganjali et al. 2014:52; Madaan, Kumar & Chan 2012:449). To ensure integrity and consistency of the RL process, an easily accessible, shared platform where supply chain partners can share information on customers, inventory and logistics is necessary (Lambert et al. 2011:562; Shi et al. 2012:228).

An external barrier refers to an outside influence effecting the organisations RL practices, such as a government policy (Abdulrahman et al. 2014:461).

Supply chain partner integration: Supply chain partners are said to be the motivators of RL practices, thus emphasising the need for close, integrative supply chain relationships among partners (Ho et al. 2012:42; Shi et al. 2012:225). External integration refers to the integration between a focal company and its external environment, and may take place at different levels of the supply chain (Bernon et al. 2013:588; Cardoso, Barbosa-Póvoa & Relvas 2013:438). Non-cooperation of supply chain partners to RL practices and organisational policies are one of the main barriers to RL, and if removed, the chances of effective RL practices will be much greater (Ho et al. 2012:33; Sharma et al. 2011:103). Considerable time, money and effort are spent on developing a complex product return system that relies on supply chain collaboration and integration to perform effectively; however, poor integration between supply chain partners can result in the return system being a key cost driver (Bernon et al. 2013:593; Ye et al. 2013:140).

Lack of accurate forecasting: The lack of accurate forecasting between supply chain partners acts as a major barrier for RL because of the difficulties in planning for the quantities and diversity of products that need to flow through the reverse chain (Cardoso et al. 2013:446; Sharma et al. 2011:103). Product returns are the most common aspect of RL; however, they introduce uncertainty into the organisation, as the timing, disposition, condition, quality and quantity of the returns are unknown (Badenhorst 2013b:4; Shaharudin, Zailani & Tan 2014:5). Infrequent and erratic timing patterns create organisational uncertainty, as to what will arrive daily at the facility (Badenhorst 2013b:4; Shaharudin et al. 2014:7). Decisions that are accompanied by accurate information play an effective role in the management and improvement of product flows, and enable a more efficient and profitable RL operation (Govindan et al. 2015:617; Madaan et al. 2012:449). Efficient information systems are capable of providing the end-to-end visibility that is needed to reduce forecasting uncertainty (Rahman & Subramanian 2012:243; Vijayan et al. 2014:12).

Government support and policy: Government policy and financial support can play a major role in an organisation’s RL practices, as the lack of enforceable environmental laws established by the government reduces the incentive and motivation for organisations to perform RL practices (Ganjali et al. 2014:53; Ho et al. 2012:33). A lack of tax policies and financial support from government to subsidise RL has acted as a disincentive for organisations to invest and or collaborate in RL practices, as the products brought back into the reverse chain create high degrees of tax complexity and exposure (Abdulrahman et al. 2012:469; Sharma et al. 2011:103). It is therefore government policy that has the greatest external influence on an organisation’s RL practices (Lai & Wong 2012:269; Ye et al. 2013:133).

Product returns consist of manufacturer and vendor returns in this study. Manufacturer returns occur because of failures of product quality on arrival at the retailer’s DC or retail store, as well as damaged stock that must be returned (Chopra et al. 2012). Technologists and clerks check the standard of the product that is delivered in order to determine if that stock can be received:

Vendor returns also occur when products are not selling at retail level or get damaged within the warehouse or retail store and are either dumped or sent back to the vendor for value recovery:

This finding is in line with the reviewed literature that states that when a product fails a quality check, it is returned to the manufacturer to be reworked to a specific standard (Zhao et al. 2013:115).

Selling products at a discounted rate to a second-hand market or reusing them in other areas are ways that organisations can recover costs on items that are no longer saleable in stores:

These observations fall in line with the reviewed literature that states that damaged items may be reused in other organisational areas or resold to third parties, thus enabling cost recovery (Holweg et al. 2016:651; Silva et al. 2013:379).

Because of the fact that there is a large amount of damage within a DC environment, reworking operations make up a large portion of product recovery. If damaged articles are not reworked into the system, they will be disposed, resulting in negative effects on the organisational profitability:

The short shelf life of grocery products is not favourable to recycling; therefore, most organisations in the grocery retail industry focus on recovering costs or generating additional revenue from recycling product packaging:

Reworking damaged articles into saleable batch sizes, in order to optimise value recovery, is in line with the reviewed literature (Dat et al. 2012:6381). Focussing on recycling packaging as a revenue enhancement opportunity is, however, contrary to the literature, as the reviewed literature mainly focusses on recycling products as a cost recovery strategy (Akdoğan & Coskun 2012:1643).

Waste management pertains to the disposal, donation or return of a product to a vendor for their own disposal (Lambert et al. 2011:562; Nikolaou et al. 2013:176). There is no revenue value within waste management, as the products are either given away or disposed. Because of the hardship hitting the South African community, organisations prefer to donate as much product to various entities as possible, before resorting to disposal:

Products that are not donated are disposed of in a landfill environment or sent back to the vendor for their own disposal. The waste management process is very strict, and disposal certification is required to ensure the legal protection of the organisation. Products that have reached their expiry date or have been rejected due to temperature problems are immediately disposed, limiting the possible effect that those products could have on any consumer:

The findings confirm the reviewed literature, stating that a product with harm causing potential will be dumped; however, an item with no organisational value will be donated free of charge (Negi & Anand 2014).

An internal driver is a motivating factor for RL that originates from within the organisation (Nikolaou et al. 2013:174). Economic drivers were identified by all 12 of the participants in this study.

Economic driver: Recovering cost and generating additional revenue streams through RL were the main economic drivers for RL practices within this study. Whenever there is heavy machinery involved in processes, damage is likely to appear. Without the RL process, the damaged products would need to be immediately disposed of, eliminating any chance for product and cost recovery:

This finding is in line with the reviewed literature that states that RL practices such as reworking allow the organisation to recover some of the products’ value (Lee & Lam 2012:591). Essentially, the idea of recovering costs is to transfer those cost savings into the price of the product and remain price competitive within the industry. The greatest area of cost saving seems to originate from greater efficiency within transport, where organisations prefer to collect from suppliers on return legs to reduce the final transport cost:

Conducting RL can also generate a revenue stream. Additional revenue will positively impact the organisational profit margins and can be used to fund capital-intensive projects as well as increase the efficiency and the utilisation of the transport fleet:

The previous two observations, however, do not completely fall in line with the reviewed literature. The literature states that RL practices enable an organisation to transfer cost savings into the price; however, there was no mention of using a more efficient transport system to gain those cost savings (Marchi et al. 2013:70). Reviewed literature also mentions a revenue stream that can be generated from conducting backhauls; however, there was no mention of funding capital projects with that additional revenue, and thus this observation differs from that of the literature (Larsen & Jacobsen 2016:787).

An external driver is a driving factor that originates from outside of the organisation for RL practices (Diabat & Govindan 2011:661). Environmental drivers were the main external driver that was uncovered in this study.

Environmental driver: Large organisations have huge amounts of infrastructure that create negative effects on the environment; however, there is an expressed need by all four grocery retailers to reduce the organisation’s impact on the environment. RL is used as a method to reduce the number of vehicles on the road and the kilometres that those vehicles travel, thus causing less carbon emissions and congestion on the roads (Nikolaou et al. 2013:178). There is also a constant progression towards continuously improving processes and machinery, in order to reduce that negative effect on the environment and drive a more sustainable future:

This finding is in line with the reviewed literature that states that organisations can increase their environmental sustainability and reduce their carbon footprint by conducting RL practices (Zhu & Geng 2013:6).

An internal barrier relates to a hindrance within the organisation that affects the efficiency of RL practices (Abdulrahman et al. 2014:461). A lack of information systems and infrastructure were the two internal barriers that were identified in this study.

Lack of sufficient information systems: In line with the reviewed literature, there is a general lack of RL information systems that are used in the selected grocery retailers (Ganjali et al. 2014:52). Three participants mentioned that the RL process is exceedingly manual, which creates many loopholes for pilferage and incorrect processing of returns. The lack of RL information systems creates poor return visibility, as well as a culture of inefficiency within the RL process:

Lack of infrastructure: Eight participants identified the lack of physical infrastructure as an internal barrier. Because of the size of the organisations in this study, a large amount of waste is generated on a daily basis. Waste, be it products or packaging, needs to follow a disposition strategy, where it will be recycled, reused, dumped or donated (Hazen et al. 2012:248). There is a lack of infrastructure at retail level to handle to RL practices:

There is also a lack of storage space for those returned recyclables and products within the DC, thus emphasising the importance of vendor upliftment policies:

The above observations differ from the reviewed literature, as the literature focuses more on the lack of systems infrastructure, rather than actual storage space for the handling of the returns process (Sharma et al. 2011:102).

An external barrier refers to an outside influence that affects organisations’ RL practices (Abdulrahman et al. 2014:461). Supplier policy and non-compliance, as well as transport, are the main external barriers that were identified in this study.

Supplier policy and non-compliance barrier: Four participants reported incidents of suppliers over packing pallets and not adhering to upliftment policies within the DC. Pallets that are incorrectly packed are more susceptible to damage, thus creating a direct need for RL practices:

This finding confirms the reviewed literature, which states that non-cooperation of supply chain partners to RL practices and organisational policy is a major RL barrier (Ho et al. 2012:33).

Transport barrier: When dealing with hundreds of suppliers, each with their own transport provider, issues are likely to result. Many suppliers do not specialise in transport, thus opt for the cheapest alternative available, without recognition of the possible consequences. Organisations often utilise third-party transport providers whose drivers do not understand the steps that need to be taken regarding the RL process, resulting in loss or misunderstandings between the store and the DC:

The reviewed literature mentions increased costs because of a lack of systems integration between supply chain partners (Ye et al. 2013:140). This observation differs from that literature as a lack of supplier transport understanding introduces unnecessary inefficiencies and costs into the RL system.