Reverse logistics networks are evolving as returns continue to tick up. According to the National Retail Federation (NRF), retailers estimate that 16.9% of their annual sales in 2024 will be returned, up from 16.5% in 2022 and well above 8.1% in 2019. Indeed, returns continue to pose a significant cost for the industry. The NRF estimates total returns for the retail industry were $890 billion in 2024.
Traditionally, reverse logistics networks are centralized and reliant on regional distribution centers. Products often travel many miles from consumers back to processing hubs, tying up inventory, increasing costs, and adding to emissions.
However, like consumers’ desire for faster deliveries, consumers also want quicker returns processing. As such, we are seeing the rise of hyper-local returns, a model that brings return processing closer to the consumer through drop-off points, micro-fulfillment centers, and retail partnerships. Not only are returns processed quickly in hyper-local networks, but they also lower transportation costs and improve the customer experience.
Retailers such as Amazon, Walmart, Target, and Best Buy have integrated localized return networks into their broader fulfillment strategies, often leveraging existing retail footprints or third-party partnerships, such as Happy Returns and UPS Access Points.
Other third-party logistics providers that offer hyper-local returns include Optoro, acquired by Blue Yonder this year, which supports retailers with software that routes returned items to the nearest optimal location — whether for resale, refurbishment, or restocking —reducing transport time and costs. ReBound Returns focuses on localized return flows between retail stores and warehouses while Fillogic leverages its network of micrologistics hubs located near consumers, enabling returned items to be processed quickly and minimizing long-haul shipments.
By handling returns closer to the point of sale or use, companies can significantly reduce reverse transportation costs. Each mile a product doesn’t travel reduces fuel expenses, lowers emissions, and shortens the time to re-enter inventory. For fast-moving or seasonal items, this speed can be critical. A product reshelved or resold within days, rather than weeks, retains far more of its value. Retailers using hyper-local returns are finding that faster processing not only reduces losses but also enables more efficient inventory reallocation, such as restocking items in local stores where demand is highest.
Many companies are also integrating circular-economy practices into hyper-local models, refurbishing or recycling returned items on-site or within the same region, thereby extending product life cycles and minimizing waste.
But one of the biggest drivers of hyper-local returns is customer convenience. In a market where delivery speed and ease of returns directly influence loyalty, simplifying the return process has become important. Consumers increasingly expect the same-day ease of returning a product as they do when receiving it. A hyper-local network allows them to drop off items within minutes of their home, no repackaging, no labels, and no waiting for a pickup. For retailers, this convenience translates directly into improved customer satisfaction and repeat purchases. In fact, surveys show that more than 90% of consumers consider an easy returns process a key factor in choosing where to shop online.
Technology is key to making hyper-local returns scalable and efficient. Data analytics, artificial intelligence, and digital tracking tools are enabling retailers and logistics partners to make smarter decisions about where returned products should go next. Machine learning algorithms, for example, can assess an item's resale potential, identify the closest resale or refurbishment facility, and automate routing decisions in real time.
To be successful, hyper-local returns must balance convenience, cost, and control. They will depend on improving technology integration, standardizing service quality, and leveraging data-driven automation to make decentralized reverse logistics as efficient and transparent as centralized systems.
Tony Sciarrotta is Senior Director for Reverse Logistics & Circularity at the National Retail Federation.
This article originally appeared in the November/December, 2025 issue of PARCEL.
