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As the holiday season winds down, retailers are preparing for a surge in product returns, a phenomenon so significant that January has been dubbed “Return-uary.”
In 2024, nearly $890 billion worth of products were returned — roughly 20% of all purchases, marking a significant year-over-year increase, according to a report by the National Retail Federation and Happy Returns. While flexible return policies enhance customer satisfaction, they come at a steep cost to both brands and the environment.
The transportation, labor and logistics required to process returns significantly increase retailers’ costs, with companies like Asos, Amazon and Wayfair attributing major profit losses to the impact of returns.
It’s not just the billions in lost revenue that’s at stake: The rise of ecommerce has resulted in an alarming rate of returns ending up in landfills. Every year, 9.5 billion pounds of returns — perfectly good, never-used products — pile up in the trash because of the operational challenges of processing and reselling returned items.
At the same time, returns offer an important touchpoint for retailers to provide a positive interaction with their customers. Flexible return policies have become critical to a successful omnichannel retail strategy fostering customer loyalty and building brand trust.
Retailers and brands must start balancing profitability and sustainability as they compete for consumer loyalty and market share.
Related: How to Make Your Customers (and Employees) Love Returns This Holiday Season
Drive loyalty without sacrificing profit
In the past five years, returns have doubled due to changing consumer habits, according to the NRF and Happy Returns report, fueled by the rapid online shopping shift of the pandemic. With ecommerce projected to surpass $8 trillion by 2027, retailers saw a surge in sales — and returns — during 2024’s record-breaking Black Friday and Cyber Monday. Managing these returns presents high costs and logistical challenges for many brands.
Today’s retailers are balancing high customer satisfaction against the added costs and logistics involved with handling returns. Lenient returns policies encourage brand loyalty, build trust and reinforce positive brand experiences: It’s in brands’ best interests to maintain flexible returns.
The solution? Recommerce. This approach allows retailers to maintain flexible return policies while managing products more sustainably. Returns recommerce simplifies processing and reselling, transforming waste into a net new value stream. Product returns should no longer be viewed as an inevitable cost of doing business but as an opportunity to innovate.
To start, retailers should reimagine the entire lifecycle of their products — planning for product end-of-life at the beginning of a product’s lifecycle. Reverse logistics planning is a critical part of supply chains that are helping retailers manage returns while improving their environmental impact.
Investing in reverse logistics systems or partnering with a returns partner can streamline the processing and resale of returned items. For example, Rebelstork is North America’s largest returns recommerce platform for open-box and overstock baby and home products. Built on the principles of the circular economy, Rebelstork aims to revolutionize the returns industry through innovative technology and a new way of thinking. By partnering with over 2,500 brands, Rebelstork prevents more than 12 million pounds of products from ending up in landfills each year.
Reduce environmental impact
Every year, billions of pounds of returned items — particularly in categories like fashion, baby gear and home goods — end up in landfills. To put this in perspective, this waste pile-up is the equivalent of 10,500 fully loaded Boeing 747s, a ghastly figure that has eroded retailers’ hard-earned sustainability targets and multiplied their carbon footprints.
Online and mobile shopping’s boom also means that the volume of returns is higher than ever: Retail’s returns problem has quickly become a returns crisis.
There is a dire need to build returns recommerce systems that are not only cost-effective, but that are also environmentally responsible. Recommerce is a highly viable solution that’s quickly growing in popularity.
Lean on technology’s power to reduce waste
Historically, there has been no reliable system for efficiently processing returns, but new companies are tackling these challenges head-on by developing innovative solutions and groundbreaking technology. Rebelstork, for instance, has developed proprietary technology to process truckloads of returns and overstock items daily. This technology streamlines the influx of returned merchandise into its warehouses, enabling the company to process over 70,000 unique units weekly.
Related: Don’t Let Product Returns Eat Into Your Online Profits This Holiday Season
A win for business, brands and the planet
Small adjustments to retail systems can drive efficiency, boost profits and promote sustainability. It’s time to transform one of retail’s biggest challenges into a catalyst for positive change.
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