With return rates reaching record highs, the need for retailers to handle sent-back items efficiently, sustainably, and securely is growing. Consumers have become more budget-conscious and discerning in the wake of rising cost pressures. This is one of the driving factors for soaring returns rates, as tighter budgets mean customers are more likely to return items that don’t meet their expectations or needs. A focus on consumer experience and providing hassle-free returns and quick refunds has also contributed to the upward trend.
With returns rates expected to continue to grow in 2025, retailers need to process returns quickly, which requires collaboration and visibility across the entire supply chain. There are a number of important considerations that will factor into this over the next twelve months.
An increased focus on sustainability across the supply chain
As the rates of returns increase, so does the potential environmental impact. This includes the transport emissions of getting an item from a customer back to a warehouse. It also covers the potential product wastage from a discarded item that isn’t resold, repaired, or recycled.
In 2025, we can expect more retailers to adopt eco-friendly carriers and optimise return routes to reduce emissions. The use of localised returns hubs, rather than sending an item all the way back to its original location, will reduce unnecessary journeys.
Improving sustainability across the retail supply chain is challenging due to the complex nature of a global network, with each carrier and retailer facing a variation of local challenges and circumstances. Still, balancing the need for efficient end-to-end returns management with environmental goals will require an ecosystem-wide approach.
Real-time returns data will play a key role in enabling this. By providing brands with visibility into end-to-end returns network, enabling them to streamline their operations and improve efficiency, it can also improve sustainability. This is achieved through consolidated shipments, efficient logistics, and enabling retailers to make an informed decision on which carriers to partner with based on their eco-friendly credentials.
Tackling the growing threat of returns fraud
As retailers seek to improve customer experience by making the returns process easier, and with the anonymous feel of ecommerce shopping, there has been an unfortunate increase in people attempting to game the system, hoping to receive refunds. At ReBound, we have seen examples of this including filled water bottles or old books sent back in place of brand-new shoes.
The troubling trend of returns fraud is one that brands will be keen to overcome in 2025. To combat it, retailers need to combine digital insights with thorough physical checks. Localised returns hubs are a strong option here. They enable logistics teams to process items quickly without the delay of waiting for the return to reach central warehouses. Staff can check items quickly against custmer data. It also improves the experience for customers. Businesses can issue refunds faster after the items have been checked.
Evolving returns policies
A retailer’s returns policy is a major factor in purchasing decisions; two-thirds of shoppers check returns policies before making a purchase. However, as the rate of returns increases, we are seeing more retailers experimenting with and adapting returns policies to try and mitigate the rise.
One example of this is the shortening of returns windows, giving customers less time to decide whether to keep an item and send it back. This may decrease returns somewhat, but possibly because it is discouraging purchases in the first place.
Most people expect a returns window of at least 30 days, in which case consumers take an average of 12 days to make that return. However, doubling the window to 60 days only increases the average return time to 16 days – barely impacting the logistical impact, but significantly boosting customer experience.
Some retailers are also moving away from offering free returns to try and offset rising transportation costs and environmental impact, which can frustrate customers who have come to expect free returns. In this instance, offering an easy-to-navigate returns process, which requires a smooth end-to-end process across the supply chain, is crucial here to mitigate any potential disappointment. Another alternative for the seller would be to deduct the returns costs from the refund, as it is perceived by the consumers as an obstacle.
“Returnless” returns, where customers receive a refund without sending items back at all, are gaining interest amongst some retailers and reflect the pressure they are under to exceed customer expectations while keeping costs low.
Although there are cases where this approach makes sense, such as for low-value or damaged items, it risks setting an unsustainable precedent if consumers come to expect a returnless option.
The financial and operational costs for retailers can quickly escalate, so brands need to carefully weigh short-term savings on returns shipping against the long-term financial and environmental costs as we work towards more circular supply chains. Brands should not forget that the items the consumers get to keep might go straight to the bin without even proper recycling.
2025 and beyond
In 2025, effective returns management will require a robust and integrated approach across the entire supply chain. Combining real-time data across the returns ecosystem with localised physical hubs will enable retailers and their suppliers to process returns efficiently and sustainably.
Retailers can balance consumer expectations with operational demands through a mixture of careful planning and innovation. As the complexity of global supply chains grows, the successful brands will be those that prioritise integration across the supply chain, looking for circular solutions to the challenges of rising return rates.
- Sourcing & Procurement
