As the holiday peak season approaches, retailers are preparing by ensuring adequate inventory and parcel shipment capacity. However, often overlooked is how to manage returns effectively during the busy holiday season. With return rates for online purchases ranging between 15% to 30%, preparing a streamlined, customer-friendly returns strategy is essential. Retailers who take proactive steps now can reduce operational strain, enhance customer satisfaction, and even gain a competitive edge during the busiest shopping period of the year.
While retailers cannot eliminate all returns, they can certainly mitigate the number. Analyzing data from previous peak seasons can reveal why items are returned, whether due to incorrect sizing, unclear product descriptions, or damaged packaging. By addressing these issues proactively, retailers can reduce return rates. Additionally, accurate online product pages featuring high-resolution images, detailed specifications, and customer reviews can help establish realistic expectations. Some brands also utilize augmented reality (AR) tools or AI-driven sizing recommendations to minimize guesswork and enhance purchase confidence.
Retailers should also collaborate with their supply chain partners, such as warehousing and transportation, to ensure that warehouses have sufficient dedicated space and personnel to handle returned goods and that transportation partners are prepared for potential increases in returns.
As retailers work with their supply chain partners, the customer must be top of mind. For example, offering multiple return options such as drop-off locations, home pickups, or in-store returns adds flexibility and convenience for customers. Equally important is clear communication. Customers appreciate timely updates on return status and refund processing. Providing accurate, upfront information can reduce customer anxiety and minimize inquiries to overstretched customer service teams.
Equally important is educating customer service teams. Retailers should update their FAQs, provide training on return policies, and ensure that systems are in place to track and resolve return issues promptly. Self-service tools, such as AI chatbots or return tracking portals, can help handle high volumes of requests without overwhelming customer service teams. By having a well-informed and responsive customer support team, a frustrating return can turn into a positive brand experience.
Across all levels of returns management, technology and automation play a crucial role. A returns management system, for example, can automate workflows, from return approvals to restocking and refund processing.
Real-time visibility into returns performance is important regardless of the time of year. Dashboards and alerts can help retailers track return volume, turnaround times, and refund processing. If delays or bottlenecks arise, having the ability to pivot, whether by reallocating staff or adjusting routing, is important.
Technology and automation can also help reduce returns fraud by verifying and validating return requests in real time. AI-powered systems can detect suspicious patterns, such as frequent returners or mismatched product conditions, and flag them for review. Meanwhile, RFID tags and smart packaging offer additional verification by confirming if the correct item is being returned.
After the holiday peak season ends, retailers, logistics providers, and other supply chain stakeholders need to conduct a thorough post-mortem analysis. This evaluation helps uncover what strategies and processes were successful and where breakdowns or inefficiencies occurred. Whether it's related to staffing levels, carrier performance, warehouse throughput, returns handling, or last-mile delivery issues, this analysis provides a valuable opportunity to identify what needs improvement and how to address it for the next holiday peak season.
Ultimately, a well-executed returns strategy is more than simply processing returned items; it plays a vital role in protecting customer relationships, maintaining operational efficiency, and preserving long-term profitability. A smooth, transparent, and customer-friendly returns process can be the deciding factor in whether a customer chooses to shop with a retailer again or take their business elsewhere.
Tony Sciarrotta is Executive Director, Reverse Logistics Association.
This article originally appeared in the September/October, 2025 issue.
