How to make product returns a competitive advantage

Returns are no longer a side issue for retailers—they demand strategic attention:

• In 2024, online sales during the holiday season grew year over year by about 7-8%. During that same time period, digital returns surged by 28%. 
• 39% of consumers return an item purchased online at least once a month.
• 72% of shoppers always (33%) or sometimes (39%) buy items online knowing they will make a return. 

Instead of approaching returns with hesitation, the best retailers are transforming their returns programs into a competitive advantage. Here’s how you can do the same.

1. Prioritize Convenience for Consumers

The most successful return programs make the process as seamless and convenient as possible for consumers. That means offering multiple return options, including mail-in returns, convenient drop-off options, label-free and box-free returns, and more. 

When consumers find it easy to return products, they are more likely to shop with that retailer again. A frictionless return experience builds trust and increases the likelihood of repeat purchases, ultimately fostering customer loyalty.

2. Optimize Reverse Logistics for Cost Savings

Handling returns efficiently is not just about customer satisfaction—it’s also about cost management. Returns create a significant expense for retailers, but those who optimize their reverse logistics can turn this cost center into an opportunity for financial improvement. Retailers can achieve this by:

• Implementing programs to reduce return rates, such as tighter feedback loops from operations, e-commerce, merchandising, marketing, and more. 
• Offering different carrier options tailored to different customer segments, product lines, etc. 
• Routing goods strategically to the right locations to speed up refunds and restock inventory.

By refining these processes, retailers can minimize costs while maintaining high service standards for customers.

The Best of Both Worlds: Balance Customer Experience with Operational Efficiency

The best returns programs excel at both enhancing customer experience and optimizing operational costs. For example, retailers can leverage Narvar’s concierge program, which has expanded to over 4,000 locations nationwide, including all 1,100 Kohl’s stores and more than 2,100 FedEx locations, to provide shoppers with hassle-free return drop-off locations while simultaneously incentivizing fast, cost-effective returns. 

For retailers, this program provides significant cost savings, reducing end-to-end reverse shipping costs by over 25% through return shipping consolidation. By integrating convenience for consumers with logistical efficiency, retailers can transform returns from a challenge into a strategic advantage.

Conclusion

Retailers who embrace returns as part of their customer experience strategy rather than a problem to be solved will gain a competitive edge. By making returns easy, optimizing logistics, and balancing customer satisfaction with cost efficiency, businesses can not only reduce the impact of returns but also drive repeat sales and long-term loyalty.

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