The returns dilemma doesn't appear to be going anywhere. According to Capital One, consumers returned $362 billion in merchandise from online sales and $324 billion from in-store sales during 2024. That equates to 24.5% of eCommerce sales and 8.71% of brick-and-mortar purchases.
As we move toward the summer months, returns are only expected to become more of a challenge for brands. Vacations and refreshed summer wardrobes present a prime opportunity for fashion retailers to boost sales, but they also bring a heightened risk of product returns.
There are several reasons customers return products. One common factor is bracketing, where consumers buy multiple items intending to keep only one. Other frequent causes include buyer's remorse, dissatisfaction with fit or quality, and receiving damaged goods.
Returns will never completely disappear, but here are three ways retailers can begin to mitigate the damage they do to the bottom line.
Reducing return fraud through RFID
Before even considering the challenge of managing returns, retailers have to reckon with the impact of return fraud. According to Appriss Retail and Deloitte, fraudulent returns and claims resulted in a $103 billion loss for retailers in 2024. Beyond the immediate financial loss, fraud undermines customer trust, inflates operational costs, and can distort inventory and sales data, leading to poor business decisions. As a result, retailers may end up implementing stricter return policies that hurt the overall customer experience and loyalty.
Item-level RFID lets retailers track their entire inventory with complete accuracy in real time, streamlining manufacturing, transport, and storage costs, and helping brands maintain shop floor stock levels. Its value doesn't end once products are purchased. When customers return RFID-tagged items, associates simply scan the product to pull up full product and transaction details, verify the original purchase, and trigger the return. In a world where returns fraud is on the rise, RFID is already playing a prominent role in tracking and distinguishing fraud attempts.
Managing the reverse supply chain
Once a return is verified and processed, RFID tracking lets retailers clearly see products move through the reverse supply chain, a process that order management software can make much more efficient.
Fragmented returns cause more issues for retailers than many realize. The longer products spend in the reverse supply chain, the longer it takes to get them back to the sales floor, and the lower their resale value. If the process takes too long, products can't be resold at all. With clear visibility of the reverse supply chain, and the right order management software controlling the process, retailers can streamline the entire flow and get items back into circulation as quickly as possible, maximizing resale value and reducing losses.
Teamwork Commerce's Returns Manager creates this efficiency while maintaining a high-quality customer experience. It lets retailers quickly and efficiently process returns and automatically refund consumers regardless of the original sales channel. Pre-approved return codes included with shipping documents let customers return or exchange items with minimal effort.
Stopping returns at the source
While returns will always exist, that doesn't mean they can't be reduced. Retailers can take steps to increase the likelihood customers keep their products by meeting product expectations on the first try.
One way to do that is through personalization. By helping store visitors find the right products the first time, retailers can reduce how often customers need to return items. Equipped with a secure CRM platform, retailers can use existing data to understand customers on an individual level, see purchasing preferences through transaction history, and make recommendations based on reliable information. Whether it's sizing, color, or style, helping customers find the right product quickly reduces the need to exchange items or bracket purchases, and gives customers a better experience overall.
Small steps make a big difference
Retailers can mitigate returns this summer in a variety of ways. Each approach has its own individual benefit, but combined, they can meaningfully reduce the impact of returns on the bottom line.