Returns have become one of the most pressing—and costly—challenges in modern retail. As e-commerce continues to grow, so too does the volume and complexity of returns, with estimates placing the global cost of returns at over a trillion dollars annually. For many retailers, returns are a source of margin erosion, operational headaches, and sustainability concerns. Yet, for those willing to innovate, returns optimization is not just a defensive play—it’s a powerful lever for competitive advantage, customer loyalty, and even incremental sales.
The surge in online shopping has fundamentally changed consumer behavior. Shoppers now expect frictionless, risk-free purchasing experiences, including easy returns. In categories like apparel, nearly half of U.S. shoppers engage in “bracketing”—buying multiple sizes or styles with the intention of returning what doesn’t fit. While this behavior boosts conversion, it also drives up costs across logistics, inventory, and customer service.
Retailers face a delicate balancing act: minimize the cost and complexity of returns without sacrificing customer experience or brand equity. According to Publicis Sapient research, only 45% of consumers are satisfied with the online returns process, and nearly half cite easy returns as a key factor in choosing where to shop. The stakes are high: a poorly managed returns process can erode margins, damage loyalty, and even drive customers to competitors.
Leading retailers are moving beyond reactive, one-size-fits-all returns policies. Instead, they are adopting a two-step approach:
The first step is to proactively reduce unnecessary returns by empowering customers to make better purchase decisions. This starts with data:
Even with the best customer experience, some returns are inevitable. The key is to handle them as efficiently as possible:
Returns optimization is fundamentally a data problem. The most advanced retailers are investing in:
Forward-thinking retailers are reframing returns not just as a cost to be minimized, but as a touchpoint for customer engagement and incremental sales:
Retailers like Nordstrom have pioneered dedicated in-store return kiosks and service counters, blending digital convenience with human touch. Others, such as Target, have integrated returns into their mobile apps, allowing customers to initiate returns digitally and choose the most convenient fulfillment option. These innovations not only reduce friction but also create new opportunities for engagement and sales.
Returns optimization is increasingly linked to sustainability. By reducing unnecessary shipments, optimizing packaging, and accelerating the resale of returned goods, retailers can significantly lower their environmental impact. Some are even exploring circular models—reselling, refurbishing, or recycling returned products—to further enhance sustainability and brand reputation.
Returns are no longer just a cost of doing business—they are a strategic lever for differentiation. By combining data-driven customer insights, AI-powered operational efficiency, and a relentless focus on customer experience, retailers can transform returns from a trillion-dollar problem into a source of competitive advantage.
Leaders who embrace this holistic approach will not only protect their margins but also build deeper customer relationships, unlock new revenue streams, and position themselves for long-term success in an increasingly complex retail landscape.
Ready to turn your returns challenge into a growth opportunity? Connect with Publicis Sapient to learn how our digital business transformation expertise can help you optimize every step of the returns journey.