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A Two-Step Approach to Managing Costly Retail Returns

A Two-Step Approach to Managing E-Commerce Returns
Strategic returns management lets retailers get ahead of returns in a way that’s cost-effective and appealing to consumers.

Let’s face it—returns aren’t great for anyone. For shoppers, it’s a moment of dissatisfaction and another process to go through. For retailers, it’s a burden—one with costs that go beyond the initial sticker price.

In 2020, $428 billion in merchandise was returned, approximately 10.6 percent of total U.S. retail sales. According to the National Retail Federation, the rate of online returns more than doubled when compared to 2019, with $102 billion in e-commerce returns alone.

In some cases, returned items are unable to be resold or are resold at a lower price, cutting into profits. Additional shipping places the onus on logistics, ensuring items get routed to the right destination, whether that be a warehouse, a physical store, or a landfill. These last-mile hurdles result in greenhouse gas emissions from increased delivery traffic and packaging waste, with the e-commerce market projected to produce upwards of 4 billion pounds of plastics by 2025—a different type of cost entirely.