Customer Service

Who owns the retail returns process? The impact and challenges of disjointed strategies

Photo: Generated by AI. Adobe Stock.

March 18, 2025 by Tim Robinson — Corporate Vice President, Returns, Blue Yonder

The retail returns landscape is shifting as businesses adjust their returns policies to reduce the cost burden and limit logistical challenges. Retailers have begun charging fees for returns, shortening returns windows, and limiting returns to in-store only. Around the world, the era of lenient returns appears to be ending.

Consumers used to bank on their ability to return their purchases on their own terms—so much so that returns became a foregone conclusion, an ever-present option to be activated if a purchase didn't work out. But in recent years, the global popularity of online shopping (and, therefore, returns) has led to bloated inventories, tangled logistics, and $816 billion in lost sales in the U.S. alone.

This stark reality has shone a spotlight on retailers' capacity to process returns—a multifaceted undertaking that involves several different players including logistics, warehouse teams, accounting, customer service, and store managers. Most retailers don't have a dedicated team to oversee returns—they rely on a series of baton passes across departments, which can lead to miscommunication, inefficiency, and inconsistency.

By clarifying and consolidating ownership, retailers can optimize processes, think more strategically, and streamline returns for all parties involved.

What makes returns so challenging?

Restrictive returns policies are relatively new to consumers but returns themselves have always been challenging from a business perspective.

First and foremost, returns are expensive. Many companies have historically paid for consumers' return shipping costs, which, at scale, can put a significant dent in the bottom line. But even if consumers pay their own way, returns are time- and resource-intensive. Workers must process and inspect each returned package. Warehouse teams must allocate and organize storage space. Returned products aren't as valuable as their brand-new counterparts. A winter coat returned in March might sit on the shelves for weeks, ultimately selling at a steep discount.

Returns also present enormous logistical challenges for retailers and require complex workflows involving nearly every department within a retail organization. But without one team to serve as project managers, reverse logistics can easily feel like an infinite to-do list rather than a cohesive strategy. The logistical pressure is enough to make some retailers, unable to handle the strain, simply divert returned product to landfills. Other retailers forego the returns process altogether — Blue Yonder's 2024 research found that 72% of consumers have been asked to not return unwanted items in exchange for a simple refund.

Returns generate a great deal of waste, directly inhibiting retailers' sustainability initiatives. Even if merchandise isn't discarded in landfills, it still needs to be shipped, processed, and stored. Many of today's retailers are trying to optimize processes and right-size their inventory to make their operations as efficient as possible. Not only do returns literally reverse a company's forward momentum but they can be unpredictable, forcing already-disjointed teams into reactionary workflows that don't make the best use of time and resources.

Consumers clearly value retail returns, but they also place increasing importance on sustainability — 55% of shoppers are "very" or "somewhat" concerned about returns' environmental impact. Retailers face an uphill battle in meeting customer demand for both flexibility and sustainability.

For retailers, these challenges were always lurking in the background, and, until recently, they were relatively manageable. But the pressure reached a critical mass after the COVID-19 pandemic, and what businesses need now is a better, more strategic way to move forward — one that involves clear, end-to-end ownership. A dedicated team can fortify and clarify the returns process.

A strategy

The first step toward optimizing the retail returns process is deciding who will take ownership. Creating a dedicated team to oversee the entire process — whether in-house or third-party—will dramatically simplify returns coordination.

Not only will a singular team make better decisions, identify bottlenecks, reduce costs, and solve problems, but they'll be able to create and execute a comprehensive strategy for the organization.

An effective returns strategy is grounded in business needs. Once established, the returns team should perform an audit of their company's returns landscape. This includes determining the frequency of returns, the options available to customers, sentiments about these options, and the reasons for returns in the first place. If the returns team finds that most customers are willing to use a third-party returns service with convenient drop-off locations (as is true for 60% of consumers), then they can steer the organization toward these solutions.

]Underpinning a returns strategy is a broader philosophy about the role of returns. If, for instance, the retailer aims for customer-centricity and long-term loyalty, they'll need a returns proposition that optimizes the end-to-end customer experience. On the other hand, a retailer focused on reducing costs and deterring buyer's remorse needs to intelligently monitor when (and how much) it charges for returns, as well as optimize transportation and processing to ensure returns have minimal cost and maximum resale value. Most retailers will be balancing both approaches, and a convenient customer experience does not have to be the enemy of efficiency.

Even for the best of teams, returns management will be a complex process—but it doesn't need to be complicated. A dedicated returns team can create both a grounded strategy and an authentic philosophy and use them to guide every decision they make — from sharing and processing up-to-the-minute information to executing on business plans that move their organization forward. With alignment on returns ownership, retailers will finally be able to think big-picture and address the decades-old challenges associated with finance, logistics, and efficiency.

About Tim Robinson

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