Building a reverse logistics strategy

Key take-aways:

• Reverse logistics affects margins, customer trust, and inventory health and it’s far more than a back-end task.
• Rising return rates and shifting shopper behavior (especially Gen Z) are putting new pressure on warehouses and 3PLs.
• Most return issues come from product misalignment, unclear expectations, or process gaps inside the operation.
• Better product info and tools like AI sizing, detailed visuals, and AR try-ons reduce preventable returns.
• A smooth, visible, and automated returns workflow makes reverse logistics predictable instead of costly and chaotic.

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What is reverse logistics?

Reverse logistics refers to the part of the supply chain that moves products back through your operation instead of out the door. It covers everything that happens after a customer decides an item isn’t right: return shipping, inspection, restocking, exchanges, repairs, recycling, or disposal.

If you think returns are a simple back-end task, think again. Reverse logistics shapes margins, customer trust, and inventory health. When it’s clear and well-managed, customers stay confident and your warehouse stays predictable. When it isn’t, costs rise and visibility disappears.

This article focuses on how to build a smoother reverse logistics process as return expectations grow.

Impact on e-commerce performance

Returns sit at a busy point in the supply chain. They influence margins, warehouse flow, labor planning, and the way customers feel after the sale. As online shopping grows, so do return expectations. Shoppers want clear steps, fast refunds, and simple drop-off choices.

According to the 2025 Retail Returns Landscape report, retailers estimate that 15.8 percent of annual sales will be returned, totaling $849.9 billion in merchandise. Online orders carry even more pressure, with 19.3 percent of online sales expected to be returned in 2025.

Shoppers now tie returns directly to their decision to buy. 82 percent say free returns are important, and 71 percent say a poor return experience makes them less likely to shop with the retailer again (both up from last year).

Returns are no longer an afterthought. They’re one of the few post-purchase moments customers remember most.

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Shifting consumer behavior

Shoppers return items for many reasons. Sometimes expectations aren’t met. Sometimes they buy multiple sizes to try at home. Sometimes the product information wasn’t clear enough.

But behavior is shifting. Gen Z in particular is reshaping the landscape, averaging 7.7 returns of online purchases in the last year - more than any other generation. This shift puts extra pressure on warehouse planning, staffing, and inventory accuracy. Nearly half of all shoppers now say it’s acceptable to “bend the rules” when making a return, and many engage in costly behaviors like bracketing or sending items back late.

When returning an item feels simple, customers trust your store more. But when it feels confusing, they hesitate to buy again.

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Cost of poorly managed returns

Reverse logistics touches labor, packaging, carrier spend, inspection time, and inventory accuracy. Even small delays create slowdowns elsewhere.

According to the report, about half of retailers take 6–10 days to restock a returned item, and 19 percent say that timeline must improve to protect margins. Nearly 40 percent have had to prioritize outbound shipping over processing inbound returns because of limited warehouse or 3PL capacity.

When return processes rely on manual work or disconnected systems, teams spend more time chasing information. These issues are common in reverse logistics management, especially as volume grows faster than process changes.

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What’s driving return volume

If your return rate feels high, the first step is to find the cause. Not every spike tells the same story. Some returns point to a product issue. Others point to a customer-expectation issue. Others signal a process gap inside the operation.

High-return products

High-return products often reveal where customers struggled most, whether it’s fit, quality, materials, or unmet expectations. Some fixes are quick. Others require cross-team changes. If return percentages stay steady even after updates, the root issue may sit earlier in the buying journey.

Expectation gaps

Sometimes returns rise because the customer didn’t have enough information to choose correctly. These gaps appear when what the customer expects doesn’t match what arrives at their door. Improving product photography, sizing details, descriptions, and comparisons often reduces return volume without major operational changes.

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Improving the online buying experience

Some products need hands-on evaluation. That makes online shopping harder for categories like apparel, home goods, and specialty products.

Reducing purchase uncertainty

Brands are closing this gap with tools that make the online experience feel more certain. AI sizing guides, AR try-on tools, detailed product views, and live shopping events help customers understand what they’re buying before it arrives. When uncertainty is high, shoppers are more likely to order multiple versions or return items after trying them at home.

These tools reduce the guesswork that often leads to returns. When shoppers feel sure about fit, scale, color, or how something will look in their space, they choose the right item the first time, and fewer products end up flowing back through the reverse logistics supply chain.

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Optimizing your returns process

Customers judge a brand on how simple the process feels when something needs to go back. A confusing or slow return can undo the trust built during checkout.

Clear return policies

Clear, easy-to-read return policies help customers understand what will happen if something doesn’t work out. Clear policies reduce back-and-forth questions and prevent surprises that often turn routine returns into support issues. When the steps match the promise, confidence grows.

Removing friction from returns

Small points of friction tend to compound quickly during a return. A few simple practice will help support your reverse logistics strategy:

• Clear return instructions
• Easy drop-off options
• Predictable communication
• Fast updates and movement

Many customers walk away after a tough return. A smooth experience keeps them willing to buy again.

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Strengthen your reverse logistics with scalable systems

Once a return begins, the work shifts to your operation. Good systems make this smooth because they keep information in one place, guide teams through each step, and move returned items back into inventory without extra touchpoints. 

When the process is predictable, your warehouse stays steady and your team spends less time searching for details or correcting mistakes. Weak systems create bottlenecks, slow down restocking, and add pressure during busy periods.

Integrated systems

Integrated systems connect your OMS, ERP, shipping software, and warehouse tools into a single workflow so your team has full visibility into inbound returns. That visibility helps teams prepare for inspection, restocking, and adjustments. Unified data is the foundation of reverse logistics optimization.

Automating return labels and inventory flow

Automation removes extra steps and shortens the gap between a return being scanned and inventory being updated. With ShipWise, teams can automatically include a prepaid, scan-based return label in the outgoing package, and you’re only charged if it’s actually used. Items route back to the correct facility, and teams know what is coming before it arrives.

This type of reverse logistics software supports retailers, 3PLs, and D2C brands as return volume grows.

End-to-end return visibility

Knowing where returns are and when they will arrive protects your warehouse from surprises. It also shortens the path between “returned” and “ready to sell,” which strengthens the financial side of your reverse logistics operations.

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Shaping a more predictable reverse logistics operation

Returns will always be part of e-commerce. The goal is to make them manageable and predictable, not overwhelming.

Using customer feedback

Every return contains information. Customers often share what they expected and why the product missed the mark. Over time, this feedback helps teams make more confident decisions about merchandising, packaging, and fulfillment rules.

Reducing operational complexity

Strong reverse logistics creates stability across your entire supply chain and turns returns into a predictable, repeatable process. It protects margins, reduces wasteful touchpoints, and keeps customers confident in your brand. With the right reverse logistics strategy and tools, returns shift from a strain to a controlled, reliable part of your business.

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