Refurbishment instead of depreciation: sustainable utilization of returns

Online retail is growing – and with it a challenge: returns. In Europe, the average return rate for e-commerce is between 30 and 40 percent of orders. This results in considerable costs for retailers, consisting of transportation, testing, storage, loss of value or even disposal of the goods. Online retailers do not currently expect returns rates to change. It is more sustainable not to destroy returns, but to keep them on the market and extend their life cycle in a targeted manner. Refurbishment does not completely replace new production, but it does make a measurable contribution to conserving resources and avoiding waste.

Legislation also aims to promote this: The Closed Substance Cycle Waste Management Act (KrWG) is intended to help keep products fit for use for as long as possible, the Electrical and Electronic Equipment Act (ElektroG / WEEE) promotes the reuse of appliances and components and EU Directive 2024/1799 strengthens the right to repair, which must be implemented in Germany by the end of July 2026. Contract logistics supports refurbishment with customized services.

In addition to regulatory requirements, refurbishment has advantages over conventional returns management. For Vodafone, it is a central component of the closed-loop strategy for network and customer devices. The process of “check goods, store or write off” is significantly expanded during refurbishment and a specialized process chain is created within contract logistics.

At the beginning is the structured goods receipt. The returns are recorded, serial numbers registered and the products identified. Serialization is particularly important for electronics in order to clearly track devices.

This is followed by a technical and visual inspection to assess the condition of the goods and categorize them. Before they are technically refurbished, all existing user data is deleted from the devices in order to meet the high requirements for data protection, product safety and customer trust. This means that the devices are repaired if necessary and components such as batteries, displays or other components are replaced if required. Finally, the devices are cleaned and visually refurbished. The German Product Safety Act (ProdSG) also stipulates that refurbished products must meet all safety requirements.

The goods are now repackaged, supplemented with accessories and clearly marked as repaired. If this labeling does not take place, this can be considered misleading under competition and consumer law.

This process must be individually tailored to the customer’s needs, as demonstrated by the refurbishment service provided by contract logistics provider Loxxess for Vodafone. The refurbishment of modems and set-top boxes, which has been established for years, extends the life cycle of the devices; functional and quality tests are an integral part of the process.

Refurbishment for Vodafone’s cable services is a tailor-made logistics solution: the entire refurbishment takes place under one roof, including tasks such as cover replacement and vendor management. This is not self-evident, as partners specially certified by the manufacturer often have to be involved, which often results in additional, unnecessary transportation routes.

As you can see, refurbishment is a task that requires a lot of specialist knowledge. It is therefore important that every step is well thought out and has its own SOP (Standard Operating Procedure) to ensure quality. We record the modems and set-top boxes returned by customers, including the accessories, test everything for functionality, delete data, update the firmware and finally check and clean the devices. A continuous improvement process (CIP) ensures that efficiency is regularly increased.

We achieve this required efficiency by supporting the entire flow of goods from delivery to dispatch with smart logistics technologies. Without suitable IT and process systems, refurbishment is hardly economically scalable. Today, modern warehouse management systems enable seamless serial number tracking, digital inspection logs and automated condition classifications. This allows the condition of a product to be documented directly in the system and linked to the relevant marketing channels. Data analyses are also becoming increasingly important, for example to identify typical reasons for returns.

Around 500,000 newly packaged modems and around 100,000 set-top boxes leave our warehouse every year. In addition, there are refurbished accessories such as power supply units, remote controls, various cables, etc.

Vodafone and LOXXESS pay attention to sustainability not only when refurbishing, but also when repackaging. The players now use recycled packaging material, not only for cardboard and cardboard inlays, but also for inner packaging materials such as binders or bags.

Refurbishment offers economic benefits and improves sustainability by reducing material consumption, energy consumption and CO2 emissions. This effect is particularly significant for electronics. For retailers or Vodafone’s cable services, refurbishment also pays off economically thanks to lower depreciation and longer product life cycles. It also drives the circular economy.

Contract logistics providers have the infrastructure, processes and IT systems to efficiently check and process large flows of returns and bring them back to the point of sale or to the customer. They can therefore provide the infrastructure for industrial refurbishment processes and offer a customized service.