Retailers had their hands full this last holiday season. A solid start to shopping was welcome news, but better-than-anticipated sales were just part of the story. As was expected, e-commerce drove the gains, and that means this year’s seasonal returns volume will be especially heavy.

Retailers are enjoying the benefits of improved omnichannel fulfillment, and the effort they’ve given to activating shoppers across channels has been time well spent. However, with the impending increase in returns, it’s essential that they pay equal attention to returns management, especially for products containing hazardous materials and waste.

With COVID-19 having already complicated the holiday shopping season, retailers need to be proactive in preparing for fully compliant disposition of hazardous-product returns. If not, they risk taking a serious hit to hard-won profits.

Anyone who thinks that states are too busy contending with the coronavirus to enforce compliance should think again. Even in the midst of the pandemic, environmental regulators and local governments are aggressively prosecuting retailers for improper handling, transportation and disposal of hazardous waste. And the ongoing civil enforcement is costing merchants millions of dollars in settlements and fines.

Perhaps not surprisingly, it’s California that’s been ringing up the settlement register as of late, collecting more than $6.25 million in fees and fines from three leading retailers since September. In December, Ross Stores, Inc. was ordered by the Monterey County Superior Court to pay $3.335 million as part of a settlement of a civil environmental prosecution.

According to the Alameda County District Attorney, more than 441 Ross and dd’s Discount Stores throughout the state unlawfully handled and disposed of various hazardous wastes and materials, including electronic waste, cosmetics, batteries, mercury lamps, personal care products, aerosol spray cans and other toxic and ignitable materials. 

It was a similar outcome in October for Bed Bath & Beyond (including Buy Buy Baby, Harmon Face Values, and Cost Plus World Market stores) when they agreed to a $1.49 million settlement in Ventura County Superior Court, after being accused of unlawfully handling, transporting and disposing of batteries, electronic devices, ignitable liquids, aerosol products, cleaning agents, and other flammable, reactive, toxic, and corrosive materials, at local landfills that were not permitted to receive those wastes.

In September it was Kelly-Moore Paints that took the hit, reaching a $1.43 million settlement with 10 California counties to resolve allegations that the company routinely and illegally disposed of paint colorants, paint, electronic devices, aerosol products, and other hazardous wastes into company waste bins destined for municipal landfills that were not authorized to accept such material.

Each of these cases involved similar allegations of improper management of common hazardous materials, many of which retailers, across verticals, have in their stores and distribution centers right now, with more likely to come back their way after the holidays.

So what must a returns-management system provide to retailers to help ensure they’re effectively equipped to be compliant? These three system requirements surface immediately.

Advanced decision guidance. There’s no room for guesswork in hazardous-materials management. From presort to final disposition and documentation, employees need to be carefully guided through every stage of the management chain. Information must be easily accessible, instructions clear, and visibility absolute. The system should empower employees, with minimal training, to easily identify hazardous-product returns for proper processing, without the need for a dedicated waste-management expert on site.

But a decision-tree is only as good as the database that’s behind it. Any system worth employing has to have a hazardous-materials database that’s complete and automatically updated on a regular basis.

Flexibility and mobility. Retailers need a hazardous-materials management system that can accommodate the operational and logistical adjustments that seem to be an everyday occurrence in today’s constantly evolving marketplace. Pre-sort, initial classification and first-stage disposition decision-making need to be enabled wherever there is returned product, be it the stockroom at the back of the store or the distribution center down the highway.

Additionally, being tied to a dedicated workstation could prove sub-optimal if space becomes an issue. With shoppers looking to take advantage of physical-but-contactless returns options like curbside dropoff, it becomes critical that employees have hazardous-materials guidance via wireless devices. 

Sustainability. Compliant hazardous-materials management is the pathway to sustainability, and the efforts that retailers make every day in support of environmental safety are admirable. However, maximizing the effectiveness of environmental risk mitigation demands a system that consistently delivers clear direction for the compliant processing of hazardous-materials returns, in the most sustainable manner possible.

Retailers pursuing sustainability must have complete confidence in their system’s hazardous-materials management characterization and process guidance. Anything less is a problem — a potentially expensive one.

The much debated “new normal” is quickly taking shape across retail, and active environmental enforcement will definitely be part of it. All indications are that cash-strapped states will continue to aggressively pursue those suspected of being non-compliant with investigations sometimes running for years, employing undercover agents, and targeting multiple retailers simultaneously. Retailers need to prepare.

Ken Bays is vice president of product development at Inmar Intelligence.