Brands hoping to boost margins by selling directly to consumers this Black Friday may need to take a closer look at the cost and complexity of their reverse-logistics operations, with LG Electronics Australia is learning this the hard way.
The company has invested millions into a major direct-to-consumer online marketing push, aiming to divert shoppers away from mainstream retailers and onto LG’s own website.
But the strategy is being undermined by significant issues in its reverse-logistics system and what many customers describe as poor service from LG’s Philippines-based call centre.
According to insiders, LG anticipated a spike in product returns from its direct-sales campaign and outsourced its reverse-logistics function to Manila—where its support centre is already located.
Several staff who we have spoken to claim they were unaware of the decision until problems surfaced.
The initiative was reportedly led by Korean manager Roger Pak with the “full support” of Managing Director Dan Lim.
Lim is still awaiting his Federal Court hearing after being accused of multiple misconduct issues related to harassment and workplace culture within the Australian subsidiary.
A former LG executive told ChannelNews, “They don’t know what to do with Dan Lim.
They even left him in Austria this year because of his questionable performance and the lack of opportunities for him elsewhere.”
This period of the year traditionally sees LG executives promoted or reassigned, but cost-cutting measures appear to be driving a different environment.
Their latest outsourcing move, intended to reduce expenses, was described internally as “botched” and directly contributed to at least one long-term executive resigning on the spot.
The individual, whom ChannelNews has chosen not to name, did not return to the company due to concerns about deteriorating working conditions.
Another executive said there had been “no basic consultation with employees” regarding the shift in reverse-logistics operations which often covers all activities that take place after a product is delivered to the customer—including returns, repairs, refurbishment, recycling, and handling undeliverable or unsold goods. As direct-to-consumer sales increase, these functions become both more important and more costly.
1. Product Returns
Handling customer returns for reasons like defects, dissatisfaction, or wrong shipments.
Includes quality checks, restocking, or issuing refunds/credits.
2. Warranty and Repairs
Managing items that require warranty service, repair, or replacement.
3. Refurbishing & Remanufacturing
Restoring used items to “like new” condition so they can be resold.
4. Recycling & Waste Management
Collecting and processing end-of-life products or packaging for sustainable disposal.
5. Asset Recovery
Identifying ways to reclaim value from returned or used goods—through resale, part harvesting, or material reuse.
6. Return to Vendor (RTV)
Sending unsold, defective, or overstock items back to manufacturers or suppliers which in LG’s case could involve sending a TV back to a manufacturer such as TCL.
This year LG has been heavily criticised on multiple web sites with LG’s call centre in Manila drawing widespread criticism.
Numerous online reviews cite poor communication, unhelpful responses, and difficulty escalating issues.
On Trustpilot, customer Carol Wakelin described the service as “appalling,” saying it took weeks to obtain a replacement remote because call-centre staff repeatedly misunderstood her request. “I spent at least four hours on the phone and was never put through to a manager despite asking multiple times. I will never buy another LG product again.”
Australian customer Ray Proffitt shared a similar experience, calling LG a “joke of a brand.”
After ordering a 200Hz gaming monitor from LG’s website, he received a slower, lower-spec model. He described the Manila call centre as “like talking to a brick wall.”
Internally, the company appears to be under stress.
Multiple sources say staff are leaving amid tightening budgets.
Among recent departures is long-serving credit manager Ian Greenwood, who resigned after 20 years with the company. LG’s Australian subsidiary is also now on its fifth CFO, a position appointed directly by headquarters in South Korea.
