The returns management process: How businesses can streamline and optimize returns
Corinne D'Andria
·April 23, 2025
As an ecommerce business, you know that it’s crucial to build a strong, sustainable operations strategy that will help you ensure growth even during uncertain times. And as up to 30% of customer orders end up as returns, your returns management process should be a key part of that strategy.
In this article, we’ll talk through the key elements of a returns management process, and provide guidance for creating a process that works for your brand.
What is a returns management process?
Your returns management process encompasses all of the elements that are involved in the customer returns process. These include:
- Return initiation: Your shopper should have a streamlined way for requesting and initiating a return, without relying on customer support for help.
- Product return: The customer should have a simple way to get the item back to you, which may include multiple options such as self-shipping with a printed mailing label, bringing the item to a drop-off center, or returning the item to a local store, with access to order tracking along the way.
- Receipt and inspection: You should have a clear process for inspecting the returned item and assessing its condition, whether before or after the item has been shipped back.
- Restocking or re-routing: After completing inspection, you should have a system for routing the returned item back to inventory, or to alternate locations such as a donation center or refurbishment center. (Items may also be routed to these locations initially if you already know that they aren’t in resellable condition.)
- Refund: You should have a simple process for refunding the customer or providing them with store credit once their refund has been approved (whether at the point of request or upon successful inspection of the item).
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Explore moreSetting up an effective returns management process
To develop a streamlined and efficient returns management process, it’s important to invest in technology that can help you automate each of these areas. Automation can eliminate countless hours of manual labor and enable you to effortlessly scale your business growth while delivering an enhanced customer experience.
By using a returns operation platform like Loop, you’ll be able to optimize your returns management process from end to end. Let’s take a look at how Loop supports each stage of the process:
- Return initiation: Loop’s self-service customer portal gives shoppers the tools to start their own return requests—whether they’re seeking a refund, exchange, or replacement. They’ll be able to answer questions that lead to customized workflows depending on the reason for their return, with no need to seek out customer support.
- Product return: Loop’s features enable your customers to take advantage of omnichannel returns, including printable labels for self-service; boxless drop-off at one of our partner Happy Returns’ Return Bar® locations; and in-store returns using our POS tool. Loop’s customized return options are designed to maximize customer convenience and can help you reduce your reverse logistics costs.
- Receipt and inspection: Our customized workflows make it easy for your brand to set up and automate the inspection/refund protocol that makes sense for you, even on an item-to-item basis. For instance, you can issue a refund immediately upon scanning in a $50 tee, while waiting to process a refund until after inspecting an $800 dress, so that you can make sure the high-value item is in resellable condition.
- Restocking or re-routing: With our Dynamic Routing, you’ll be able to determine the right course for most items even before inspecting them. By asking customers to take a photo of their item and answer questions about it, you’ll be able to automatically determine its return destination based on its condition and return reason—whether that means returning the item to inventory, liquidating it, recycling it, or donating it. This method enables you to cut costs on reverse logistics by shipping items to the right location immediately, rather than redirecting them once they arrive at the warehouse.
- Refund: Customer returns often represent a dead end in their relationship with your brand—but Loop’s technology is changing that. We make it just as easy for shoppers to choose a new item for exchange as it is to get a refund, even if the new item costs more or less than the original product. By offering Bonus Credit to customers who initially opt for a refund, you can even incentivize upsells, as many of these shoppers spend more than the original amount towards another product, even after applying the Bonus Credit.
Returns are an all-too-common occurrence, but with a smart returns management process, you can transform customer returns into a profit center and a competitive advantage for your business.
Shoppers will love your hassle-free returns and exchange options, encouraging high retention rates and more retained revenue from each transaction. Meanwhile, your CFO will love Loop’s features like Dynamic Routing, which can help you save costs on reverse logistics; and customized Workflows that help you save time and labor with automation.
Ready to learn more about how Loop can help you build a best-in-class returns management process?
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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.