Returns Reduction

4 Steps to Revamp the Returns Mindset

It's time to stop thinking about returns as a fact of life, and start thinking about them as something you can control ...


It's time to stop thinking about returns as a fact of life, and start thinking about them as something you can control and prevent. In fact, 73% of returns occur due to reasons you can control - and change!

For as long as any retailer can remember, returns have been just another annoying thing that is part and parcel of the retail game. Customers return things; what are you going to do about it? It’s just another cost of doing business… right?

As brands and customers alike make the shift to ecommerce, thanks to increasing digitalization and spurred on by the pandemic, the “returns problem” is growing ever bigger. How big? In 2021, retailers experienced a one-year increase of 57% in returns - up to 16.6% compared to just 10.6% in 2020. 

Quantifying the returns paints an even more dramatic picture. That climbing percent of sales which end up as returns? It represents $761 billion of revenue lost in 2021 alone. 

But what can be done about it? Thus far, brands and retailers have focused on absorbing and managing returns. Handling the logistics and trying to simplify the experience. But managing returns is like treating the symptoms of an illness instead of the cause—it may make you feel better for a while, but you're not addressing the root of the problem.

Revamping the Returns Mindset

If you’re going to do something about returns, you need to stop thinking about them as a fact of life and start thinking about them as something you can control and prevent. In fact, 73% of returns occur due to reasons you can control - and change!

To prevent and reduce returns, you need to shake up the traditional way of thinking about returns and adopt a new mindset:

  1. It’s not a sale until it’s a keep. Your sales figures are misleading if you aren’t factoring in the 5, 10, 17, or even 30% return rates across retail product categories. Make keeps your goal, rather than sales, to set your sights on the true target.

  2. Returns are a huge opportunity. Consider the potential gains in recouping the revenue lost to returns that could have been prevented. Adjust your thinking to approach returns as an area of opportunity rather than a liability.

  3. Focus on prevention at the heart of returns management. Placing the aim of reducing returns at the core of your returns management strategy gets at the root of the problem, instead of simply dealing with its consequences.

  4. Increase visibility into returns data. Go deep in the details to understand—and even predict— return rates to find actionable ways to improve product, process, and supply chain thanks to AI-powered solutions for returns reduction insights.

What Data Can Do For Returns

Empower your teams at every level—finance, marketing, ecommerce, suppliers, etc.—to learn and grow and improve to drive increased sales without increased return rates. Finding a technology solution focused on returns from a holistic perspective enables teams to gain visibility and collaborate across otherwise siloed roles.

Returns reduction is possible—and simple. Data and actionable insights thanks to AI-powered intelligence allows you to drill down into granular levels of detail on every product, category, supplier, and more to understand where things are going wrong (or right!) to make data-driven decisions to positively impact the bottom line.

  • Monitor and analyze transactional and customer feedback data to identify the root cause of returns, whether it’s a product, supplier, or operational issue
  • Automate suggested remedies based on the root cause
  • Predict and identify issues in-season, while there’s still time to address them

With the vast quantities of customer feedback, purchase, and operational data available to retailers, it’s unimaginable to not take advantage of the insights to be gleaned in order to improve profitability, customer experience, and even sustainability. With scalable and secure infrastructure operating in tandem with applied AI tools, you can go so far as to predict and identify issues in real time—when you can still do something about them, and not only gain prescribed solutions to root causes of returns but also track which actions drive the best results.

An Unsustainable Status Quo

Continuing on the way things are is akin to burying your head in the sand. The future of retail includes steadily rising return rates, and simply managing them is not sustainable business practice. 

Understand the real root cause of returns through analyzed transactional data merged with customer feedback and de-silo teams for a collaborative and holistic approach to returns reduction mindset.

Ready to get starting preventing returns? Download the Returns Prevention Playbook:Returns Reduction Playbook - Incisiv - Newmine

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