SIRAS.com, a spin off of Nintendo that helps retailers and suppliers reduce returns on merchandise, said its product-tracking technology reduced MP3 player return rates by 47 percent in 2006, to less than half the industry average.
SIRAS.com creates a unique fingerprint for each MP3 player based on its UPC code and serial number. This allows manufacturers and retailers to pinpoint the start date of a product warranty and to prevent returns for out-of-warranty products.
A spokesman said one of the biggest causes of return losses is that the start date for warrantees is difficult to establish if the customer does not have a receipt.
"Our system simply enables foolproof enforcement of store return policies and manufacturer warranties, with 100 percent accuracy," said president Peter Junger.
The average return rate for MP3 players falls between 15 percent and 20 percent. With SIRAS, the rate is cut to just above 7 percent, said a spokesman.
SIRAS is also available on products such appliances, cameras, televisions and telephones. The company said it will report its TV return rates for 2006 in the next two weeks.
SIRAS.com works with suppliers and retailers to create a fingerprint for a product which is then scanned and transmitted to a SIRAS database. If the product is returned, the retailer scans the UPC and serial numbers on the box to determine if the product is under warranty.
SIRAS said it works with suppliers including Sony, Nintendo, Hewlett-Packard, Philips, RCA, and retailers including Wal-Mart, Target, Kmart, Toys "R" Us, Circuit City and Best Buy.
The idea for SIRAS.com was sparked in the 1990s when Nintendo found that profits from its video game sales were curtailed by returns. Customers often returned products after the warranty had expired, or they returned old products that were placed in new boxes.
Nintendo created a POS Electronic Registration, which reduced its returns by 72 percent. Since then, SIRAS.com became a wholly owned subsidiary of Nintendo.
SIRAS claims its clients see an average 37 percent reduction in return rates.