The Future of Returns: Optimizing the Post-Purchase Experience for Profitability and Loyalty

Returns have long been viewed as a necessary evil in retail—a cost center that erodes margins and creates operational headaches. But as the retail landscape evolves, leading brands are reimagining returns as a strategic lever for profitability, loyalty, and data-driven growth. The future of returns is not just about minimizing losses; it’s about transforming the post-purchase experience into a source of competitive advantage.

The Evolving Role of Returns in Retail

The acceleration of e-commerce and omnichannel shopping has made returns more frequent and complex. Products ordered online are returned up to three times as often as those bought in-store, and nearly half of consumers cite easy returns as a key factor in choosing where to shop. Yet, only 17% of retailers have full inventory visibility—including in returns—across all channels, and fulfillment costs (including returns) now account for up to 12% of revenue, rising steadily year over year.

Despite these challenges, returns are also a rich source of customer insight and operational opportunity. When managed strategically, returns can:

Reduce friction and build trust, driving repeat purchases and loyalty
Provide valuable data to improve product development, merchandising, and marketing
Enable circular economy initiatives and support sustainability goals

From Cost Center to Loyalty Driver: The New Returns Paradigm

Retailers that treat returns as a customer experience touchpoint—rather than a back-office burden—are seeing measurable gains. The most successful brands are:

Offering flexible, hassle-free return options (in-store, mail, lockers, and third-party drop-off)
Using AI and data analytics to predict, prevent, and optimize returns
Incentivizing cost-effective return behaviors (such as in-store returns or exchanges)
Leveraging returns data to personalize offers, improve product fit, and reduce future returns

For example, leading apparel retailers use AI-powered fit tools and customer data to recommend the right size and style, reducing bracketing (the practice of buying multiple sizes with the intent to return most). Others segment customers by return history and incentivize high-return shoppers to use lower-cost return channels or to exchange rather than refund.

Digital and In-Store Innovations in Returns

The future of returns is omnichannel. Shoppers expect to return products wherever and however is most convenient—whether that’s in-store, by mail, or at a third-party location. Retailers are responding with:

Self-service return kiosks and digital return portals that streamline the process
Mobile apps that enable customers to initiate returns, track status, and receive instant refunds
In-store experiences that turn returns into opportunities for upsell, cross-sell, or loyalty engagement

Nordstrom, for example, has introduced 24-hour self-service return kiosks and dedicated return spaces, making the process fast and frictionless. Other retailers are equipping associates with digital tools to process returns anywhere on the sales floor, reducing wait times and improving customer satisfaction.

AI and Data: Predicting, Preventing, and Optimizing Returns

Artificial intelligence and advanced analytics are transforming returns management. By analyzing purchase, return, and product data, retailers can:

Predict which products and customers are most likely to generate returns
Identify root causes (such as product quality, inaccurate descriptions, or sizing issues)
Personalize the shopping experience to reduce the likelihood of returns
Optimize reverse logistics by routing returned items to the most profitable location for resale or refurbishment

Retailers are also using dynamic pricing and personalized promotions to influence return behaviors. For example, customers with a high likelihood of returning may be offered incentives to return in-store (where the retailer can recapture the sale) or to exchange rather than refund. AI-driven routing ensures that returned products are sent to the location where they are most likely to be resold quickly, minimizing markdowns and waste.

Operational Strategies for Reducing Returns Costs

Returns optimization is not just about customer experience—it’s a critical lever for profitability. Key operational strategies include:

Improving inventory visibility across all channels, including returns, to reduce stockouts and markdowns
Automating returns processing with robotics, RFID, and digital tracking
Streamlining reverse logistics to minimize transportation and handling costs
Integrating returns data with supply chain and merchandising systems to inform demand planning and product development

Retailers that invest in real-time inventory tracking, automated fulfillment, and data-driven decision-making are seeing significant reductions in returns-related costs and improvements in overall supply chain efficiency.

Returns, Customer Experience, and Sustainability

Returns are a make-or-break moment in the customer journey. A seamless, transparent, and fair returns process builds trust and encourages repeat business. Conversely, a poor returns experience can drive customers to competitors. In fact, 54% of customers say that clear, accurate order tracking—including returns—is a key factor in their purchasing decisions.

Returns optimization also supports sustainability goals. By leveraging AI to route returns efficiently, resell or refurbish products, and minimize waste, retailers can reduce their environmental footprint and support circular economy initiatives. Flexible, data-driven returns policies can also help prevent overproduction and excess inventory, further enhancing sustainability.

Publicis Sapient’s Framework for Returns Optimization

At Publicis Sapient, we help retailers transform returns from a cost center into a source of value and loyalty. Our approach includes:

End-to-end inventory and returns visibility: Real-time data across stores, warehouses, and channels
AI-powered returns prediction and prevention: Identifying high-risk products and customers, and taking proactive action
Customer-centric returns experiences: Omnichannel, self-service, and personalized options
Operational excellence in reverse logistics: Automated processing, dynamic routing, and integration with supply chain systems
Sustainability and circularity: Enabling resale, refurbishment, and recycling of returned products

Practical Recommendations for Retailers

Map the end-to-end returns journey from the customer’s perspective. Identify friction points and opportunities to add value.
Invest in digital and in-store returns innovations that make the process fast, flexible, and transparent.
Leverage AI and data analytics to predict, prevent, and optimize returns. Use insights to improve product information, sizing, and customer targeting.
Integrate returns data with supply chain and merchandising systems to inform demand planning, inventory management, and product development.
Incentivize cost-effective return behaviors and use returns as an opportunity to engage, upsell, or retain customers.
Embed sustainability into returns management by enabling resale, refurbishment, and recycling, and by minimizing unnecessary returns.

The Bottom Line

Returns are no longer just a cost to be minimized—they are a strategic opportunity to drive profitability, loyalty, and sustainability. By embracing digital innovation, AI, and data-driven operations, retailers can transform the post-purchase experience, turning returns into a source of competitive advantage. The future of returns is here—and it’s time to optimize for both profit and loyalty.

Ready to transform your returns strategy?
Connect with Publicis Sapient to learn how our supply chain and returns optimization frameworks can help you unlock new value from the post-purchase experience.