Proactive returns management: Turning returns into revenue
Corinne D'Andria
·March 13, 2025
In order to stay afloat—and even thrive—during these tumultuous times for the ecommerce industry, taking a proactive approach to returns management is critical.
By being strategic around your returns process, you’ll be able to deliver a better post-purchase customer experience that helps you retain revenue and preserve customer loyalty. You’ll also be able to save costs on reverse logistics and get your items back into inventory more quickly, ensuring that you can maximize profit margins on your returned merchandise.
As tariffs, increased shipping costs, and other rising operational costs add to your expense sheet, building a robust returns management strategy can help you control costs and ensure long-term profitability for your brand.
Here’s how to do it.
Why focus on proactive returns management?
In some industries, as many as 30% of purchases result in a return. And if you don’t have a dedicated process in place to streamline returns and optimize for retained revenue, you’re missing out.
Proactive returns management transforms the returns process from a liability to a competitive advantage. Rather than simply hoping shoppers don’t choose to return items, and doing the bare minimum to support them with returns, you should be building a robust process that makes it as easy as possible for shoppers to return products or exchange them for the items they want.
After all, a shopper isn’t likely to revisit your brand if they don’t have a positive experience the first time around—so by optimizing for a great returns experience, you’ll be able to increase your customer satisfaction and retention rates, even among shoppers who didn’t find a product they liked the first time around.
What is proactive returns management?
A proactive returns management strategy should include:
- A generous returns policy
- Give shoppers ample time to consider their purchases, offering them a minimum of 30 to 45 days to evaluate a product. Include a clear and concise returns policy on your product pages (no legalese).
- A streamlined returns portal
- When a customer wants to return an item, they shouldn’t have to jump through hoops getting approval from your customer support team. Provide access to a self-service returns portal, where shoppers can see all of their return-eligible items and initiate a return independently.
- Easy exchanges and bonus credit
- When a shopper requests a return, make it as easy as possible for them to exchange the item rather than request a refund. You should offer a streamlined experience for managing exchanges, whether they’d like a direct variant or want to consider a different item in your store, applying their return credit to the transaction instantly. To sweeten the deal, you can even offer them bonus credit to apply to another item, encouraging upsells and customer retention when the shopper might otherwise request a refund.
- Personalized reengagement campaigns
- If a shopper makes a return without an exchange, they’re less likely to consider your brand in the future. In these cases, you can reduce customer churn by developing personalized re-engagement strategies for these shoppers, such as email and SMS campaigns promoting exclusive discounts or bonus offers on products they’ve previously viewed.
- Customized returns policies with flexible options
- While some shoppers like to mail returns back from home, many would prefer to drop off their items to a nearby dropoff location or return in-store. By giving shoppers access to all three options, you’ll be able to enhance customer satisfaction, while lowering costs through bulk consolidation for returns that are delivered to in-person locations.
- Dynamic routing for reverse logistics
- On the operational side, it’s also critical to optimize for maximum efficiency in reverse logistics. Using a dynamic platform for returns management can help you identify how to treat returned items (i.e., return to warehouse, send to liquidator, or encourage customers to “keep item”) to maximize cost-savings and profitability. With real-time reverse tracking, you’ll be able to see when returned items are likely to be back in inventory to help you optimize your sales strategy.
- Automated fraud detection
- Returns fraud is a growing problem for retailers, with returns fraud attempts up by 22% in the U.S. over the past year. By implementing machine learning technology that reviews your return transactions for “high risk” indicators, you’ll be able to freeze fraudulent return requests and protect your profit margins from abuse.
Many brands are focusing on turning returns into revenue in 2025
Curious what else brands are doing to stay ahead? Find out in our recent 2025 Trends Report!
Unlock all the insightsHow to build a proactive returns management strategy
Developing an effective plan for managing profitable returns starts with incorporating the right technology. By using an automated returns management platform like Loop, you’ll be well-equipped to deliver a seamless experience for your shoppers while maximizing cost-efficiency and revenue retention for your brand. Loop gives you the tools to help your customers and your operations team navigate the returns process effortlessly, ensuring a post-purchase experience that’s a cut above your competitors.
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With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.