Strategies For Managing Returns And Reducing Loss

Last year I had a call with the VP of ecommerce of a $300M+ retail company who was convinced their 32% return rate was "just the cost of doing business" When I dug into their data I discovered that almost half of post-purchase revenue loss is preventable. This happens all the time, retailers are pouring their heart and budget into hitting sales targets, only to watch a third of that revenue disappear due to inefficiencies and refunds. It's demoralizing to be a retailer these days. It doesn't have to be this way! Here's the playbook we used to help that company recover over $6.8M in just 4 months: Most retailers focus on the wrong metrics, for example they celebrate $10M in sales while silently losing $3.2M to returns, and another $1M to operational inefficiency, plus $800K to return fraud and abuse. Quick observations: Your "best customers" are killing you! 37% of "VIP shoppers" are serial returners, they look great in your CRM but they're negative margin customers. We found one customer returning over $14K → this is totally preventable! This is our framework that we developed after working with hundreds of enterprise retailers in the past 5 years: Prevent returns Enable size/style swaps and allow for uneven exchanges (more expensive or cheaper options) Store credit options instead of refund Relevant product recommendations for exchange and upsell Analyze the return reasons by product - this can save you a lot of products from being returned! Results: Over 60% reduction in refunds b) Prevent fraud and abuse Fraud rules to prevent return abuse Automate policy enforcement and verification of product quality before the product is sent back Product inspection workflows at the warehouse level Results: the highest we seen last year for a customer was over 90% c) Streamline Operations Setup rules for returns routing to the closest warehouse or outlet stores Minimize clicks and enable a scan, scan, refund workflow Centralize all returns data and actions into one system, to prevent system switching Results: 42% faster processing Returns are not a cost of doing business. They're a goldmine of hidden opportunities. But here's the truth: Most retailers will read this and do nothing. They'll keep losing millions because "that's just ecommerce." The smart ones will see this as the competitive advantage it is. What side do you want to be on? P.S. If you're a retail executive seeing 20%+ return rates, DM me. I'll share our full framework as it’s way more detailed.

Your Prime Day sales spike means nothing if 30% of it comes back in a return box. That’s the average e-commerce return rate, and it only climbs higher after big promos. With Prime Day fast approaching, how ready are your listings for this big sales event? Here are some of the strategies my team of Amazon experts do for our clients to help prevent product returns after Prime Day: According to the 2025 Global Returns & Profit Impact Report by Rithum, 61% of consumers return products because of poor fit, and 33% send items back due to discrepancies between what was shown and what was received. These two issues alone account for the majority of e-commerce returns and both are fixable with better listing optimization. To reduce returns based on these findings: 👉 Make size charts and fit guides easy to find and understand—don’t bury them in the A+ 👉 Ensure your main and secondary images match exactly what ships, down to accessories and packaging 👉 Include real-use visuals and infographics to set clear expectations before purchase Returns are predictable. And preventable. If your listing is vague, outdated, or dressed up to trick the algorithm, you're setting yourself up for a returns hangover. Amazon buyers don’t want surprises. They want certainty. Show the right info, and you won’t have to deal with regret boxes showing up on your doorstep two weeks later.

Spend time in stores - observe, ask questions, listen — and the story becomes clear. Returns aren’t just numbers on a dashboard. There are racks full of unsold product. Backrooms are filling up. Product returned, then re-ticketed, re-routed, or placed back out — often into assortments that don’t need them. And when you talk with store managers and district leaders, you’ll hear the same themes again and again: -Returns slow down the front end, especially during peak traffic, impacting CX -Product comes back that never belonged in the store to begin with -There’s little visibility into why items are being returned -And the product coming back isn’t moving out — it’s often marked down quickly or lingers until it’s cleared out. Stores are challenged as to where to merchandise it in the store. This is bigger than operational friction — it’s a profitability issue with roots far upstream. And the broader data confirms what the field already knows: -Returns are projected to hit $890B in 2024, or 17% of total U.S. retail sales (NRF + Happy Returns) -Returns cost $25–$30 per item, on average, in labor, freight, and inventory value loss (Narvar, Optoro) -Returned product inflates inventory and distorts category turns, making planning decisions harder -Markdowns accelerate, and stores become clearance zones instead of brand storytellers -Fit issues, unclear expectations, and poor spec execution are rarely detailed in return documentation, but show up everywhere on the floor. So what’s going on? Returns are often a symptom of upstream missteps: -Loose size specs and inconsistent fit -Product imagery that doesn’t reflect the actual item -Poor routing logic that pushes product to the wrong store -Weak capture of return reasons — “didn’t fit” isn’t enough We talk about “bracketing” as if it’s a customer quirk — but often it’s a direct result of inconsistent sizing or unclear fit guidance. That’s not behavior. That’s feedback. Here’s where brands can take control: 1. Tighten vendor tolerances for better consistency across styles 2. Upgrade product info and visuals — specs, lifestyle imagery, model sizing, real fit notes 3. Route inventory smarter, using returns data to avoid problem-SKU/store combos 4. Introduce store credit or exchanges as frictionless alternatives to straight refunds 5. Capture and act on return data beyond checkboxes — what came back, and why. The return may be the end of the customer’s experience, but the root cause usually started months earlier in specs, planning, and product decisions. The answers won’t come from a KPI report— they’ll come from listening closely to the floor. If you're close to this — in planning, stores, ops, or CX — what return signals are you seeing? And what’s working to reduce them? #retail #ecommerce #returns #storeops #customerexperience #retailstrategy #upstreamfixes #reverseSupplyChain