Returns reimagined: protect profit, preserve loyalty, and scale smarter with AI

Leading retailers don’t just view returns as a cost center. In fact, an optimized returns program is a catalyst for competitive advantage. As return rates rise and customer expectations soar, retailers are looking to post-purchase innovation to defend margins and deepen customer relationships. ‍

Why returns management matters to your bottom line

Returns are becoming more costly, frequent, and complex.

• Average return costs: $25–$30 per item. Returns don’t just affect logistics. They impact your entire P&L. Between shipping, warehouse processing, customer support, and potential damage, returns cost retailers up to 65% of the item’s original value.

• 15% of returns in 2024 were fraudulent. Fraudulent activity—such as wardrobing, empty box scams, and false “delivered not received” claims—accounted for over $103 billion in losses last year alone. Plus, over half of consumers admit to committing return fraud at least once.

• 84% of shoppers won’t shop again after a poor experience. A single bad return experience can mean the end of the customer relationship. Today’s consumers expect effortless, transparent, and personalized returns—or they walk away.

Retailers now face a critical challenge: how to transform their returns program from a P&L line item into a strategic engine for revenue retention and growth.

Meet Narvar Shield: AI-powered returns management 

Narvar Shield is powered by IRIS™, Narvar’s proprietary AI engine that transforms 42B+ interactions into actionable intelligence. With Shield, these return-related losses become opportunities—enabling predictive fraud prevention, dynamic policy enforcement, and personalized post-purchase journeys.

Shield doesn’t just manage returns. It drives exchanges, personalizes policies, automates routing, prevents fraud, and restores customer trust at scale. For CFOs, CIOs, COOs, and CX leaders, smarter returns management is no longer optional—it’s a business imperative.

Achieve high-impact business objectives with Shield 

Retailers no longer have to choose between protecting revenue and delivering a great returns experience. With Narvar Shield, brands can unlock meaningful business outcomes—retaining more revenue, building loyalty, streamlining operations, and stopping fraud—without adding complexity or risking consumer trust.

Revenue retention

Narvar Shield helps turn returns into retained revenue by prioritizing seamless exchanges and intelligent refund options. IRIS™ segments consumers by trust score—based on real behavioral data—so retailers can confidently offer high-trust consumers instant store credit or automated refunds. This personalized approach enables brands to retain up to 60% of revenue that would otherwise be lost to refunds. For CFOs, that means clear bottom-line impact. For CDOs and CX leaders, it drives higher lifetime value and repeat purchase rates.

Customer loyalty and lifetime value

Shield leverages IRIS™ to personalize return experiences by consumer trust tier, reinforcing loyalty without encouraging abuse. Consumers who feel known and trusted are more likely to come back—and the data proves it: 60% of shoppers who receive store credit use it to make another purchase. Shield makes that process frictionless with automated credit issuance, smart recommendations, and proactive, branded messaging that keeps the customer engaged even through the return.

Operational efficiency

IRIS™-powered return workflows optimize every step, automatically routing returned items to the most cost-effective and valuable destination—whether that’s a store, a distribution center, or back to the vendor. Logistics and operations teams benefit from reduced manual effort, API-based automation, and scalable features like boxless, label-free returns. Retailers also see up to an 80% reduction in "Where Is My Refund?" (WISMR) inquiries thanks to proactive updates sent via Narvar’s integrated Track & Notify tools.

Fraud prevention

Returns fraud is a growing threat, but Shield offers an intelligent defense. Its AI capabilities flag suspicious behaviors in real time—such as wardrobing, empty box scams, or excessive returns—and apply smart enforcement policies that block bad actors while maintaining a seamless experience for trusted consumers. This targeted approach ensures that fraud is minimized without alienating the loyal shoppers who drive your growth.

Build the business case. Quantify the ROI.

Transforming your returns program starts with understanding its current financial impact—and the upside potential. Narvar Shield offers a proven path to measurable return on investment by reducing costs, preserving revenue, and unlocking new growth. Here’s how to build your business case, step by step.

Step 1: Audit current costs

Before you can calculate gains, you need a clear picture of what returns are costing you today. This includes refund losses from preventable returns, fraudulent activity (such as wardrobing or empty box scams), labor costs for manual return processing, and the volume of customer support inquiries—especially “Where Is My Refund?” (WISMR) calls. These operational and financial leaks add up quickly, often turning returns into one of retail’s largest hidden P&L drains.

Step 2: Estimate Shield-driven savings

With Shield, retailers see material improvements across the board. 

• Enforcing return policies through IRIS™ can reduce unauthorized returns and fraud, protecting up to 18% of revenue. 
• Intelligent workflows convert returns into exchanges or store credit, helping brands retain up to 60% of at-risk revenue. 
• At the same time, proactive, branded return updates reduce WISMR inquiries by 50%, easing the burden on support teams. 
• Consolidated return routing and optimized logistics save brands over 40% in transportation and processing costs, further improving efficiency.

Step 3: Project revenue growth

Returns don’t have to be the end of the consumer journey—they can be a springboard to the next purchase. By embedding personalized product recommendations and upsell opportunities directly into the return flow, retailers have seen up to 15x ROI on post-purchase engagement. 

Add in the incremental margin from shipping protection and dynamic credit flows, and returns become a driver of net margin lift, not loss. With IRIS™, you’re not just protecting revenue—you’re accelerating it.

Be the champion: How to address internal objections with IRIS™-powered proof 

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Conclusion

Returns are no longer a reactive problem. They’re your next strategic lever. With Narvar Shield, powered by IRIS™, you can proactively retain revenue, personalize experiences to drive loyalty, and optimize returns across the board. It’s time to shift from cost center to profit center—intelligently, and at scale. Discover how Shield + IRIS™ delivers smarter, AI-powered returns and exchanges that serve your customers and your bottom line. Request a demo here.