“More customers moving to online shopping and home delivery dramatically increases the chance that a product will be returned.”
“This critical information could aid in product improvements or operational adjustments to improve profit margins and customer satisfaction,” Kelly explains. “Brands should leverage analytic tools to monitor return volumes, identify patterns in return causes and conduct data-driven analyses to inform their decisions. “AI can also come into play here, with predictive technology offering insight into what items are more likely to be returned based on historical returns data,” she adds. “Brands can use this information to inform merchandising and inventory or to improve personalization during the shopping experience and reduce return volumes over time.” OPTIONS ARE OPTIMAL There is no one-size-fits-all approach for returns. “Rapidly growing companies prioritizing customer acquisition and brand-building probably want a more lenient return policy,” Davis says. “For companies selling low-value and easily replaceable products, a keep-it-policy could be a great option.” The nature of the product also significantly impacts the optimal return policy. High-value items might necessitate more careful handling and potentially more stringent return policies to mitigate fraud. Ultimately, Davis says, “understanding what your customers value most—easy returns, processing speed, environmental considerations—is crucial.”
—Frank Dreischarf SVP, LTL Operations R2 Logistics
“Any educational information that allows the consumer to make an informed decision helps reduce returns,” Dreischarf says. “As shopping becomes disconnected from the brick-and- mortar—where a customer can see, try on, feel, and touch the product—returns and customer dissatisfaction with the product will increase.” STRATEGIC CONSIDERATIONS It is critical for today’s brands to make their returns process and reverse logistics strategy an operational priority rather than an afterthought. “Brands lacking an effective use of technology often have customer support teams manually processing return
inquiries, and without a proper system in place, CX [customer service] teams spend a disproportionate amount of time on these requests,” Kelly says. “In addition, relying on CX teams for return inquiries can create inconsistent enforcement of return policies, leading to lost revenues and slower response times,” she adds. “This can impact the overall customer experience, resulting in poor reviews or non-repeat customers.” Poor data tracking and analysis are a common and serious side effect for retailers that lack a “thorough” returns system. That limits a brand’s visibility into why certain products are being returned—which is vital for brands to understand in order to better serve customers.
The complete reverse logistics workflow, as depicted below, is complex. Many companies turn to third-party logistics providers such as IronLink Logistics to optimize the process.
February 2025 • Inbound Logistics 37
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