A Guide to Returns Management: Meaning, Process & its Importance

keyKey Takeaways:
  • The management of returned goods is a process that can impact both customer satisfaction and business profitability.
  • Reverse logistics, or the practice of re-routing returned goods through the supply chain may be a challenging process that demands careful preparation.
  • Studying return data can reveal information about customer motivations and point out areas that might be improved.
  • Investing in technological solutions like automated returns processing and tracking systems can help businesses manage returns better and increase customer satisfaction.

Any business that deals with manufacturing or delivering products, returns management is an essential process in it. Returns may seem like a minor aspect of the sales cycle, but it imparts a huge impact on a company’s fundamentals.

According to PRNewswire, 77% of shoppers will shop again with the same brand only because they had a positive return experience. True, returns management has that much of an impact on your company.

Nevertheless, returns are more than just a money issue. Also, they can significantly affect consumer satisfaction and brand reputation. On the other hand, a bad returns experience can result in negative ratings, reduction in customer retention, and lost online sales.

Since there is so much at stake, returns management should be a primary focus for all companies. In this blog, we will look into insights of returns management such as what returns management is, process and its importance.

What is Returns Management?

Returns management is the process of handling returned products, from receiving and inspecting the item to processing a refund or exchange. It entails overseeing a product’s complete life cycle, from the point of purchase to the point of return and eventually disposal or resale.

While responding to a product returns request, manufacturers or retailers considers below-given conditions:

  • Return eligibility
  • Return reasons
  • Condition of the product
  • Time frame of return
  • Method of return

How Does the “Returns” Process Work?

The returns management process is also sometimes referred to as reverse logistics. Here is a step-by-step process of exactly how it works.  

Step 1: Customer initiates the return process

The returns process starts when the customer decides to return the product or items. The process could be for an online store or offline shop. When the customer initiates to return the product, they will be asked for the reason behind the return.

While doing it, they will ask for reasons, such as the wrong size, defective item, wrong color, and more. When the person chooses any reason, the business will ask whether they want to exchange or return it. 

Note: Every business has a different return and exchange policy. 

Step 2: Approval or disapproval of returned products

Now, once the company has received the request for a return, they will verify the product. The company will determine whether to approve or not for the further process. Once they will find it genuine and right, they will move ahead with the process. 

Later, the companies partnered with a third-party logistics (3PL) provider which will help them to handle the retail supply chain process and return the product to an authorized warehouse. 

Step 3: Company receives products 

The third-party logistics provider will pick up the package from the customer’s place and deliver it to the retail center, fulfillment place, or authorized warehouse. Once the company receives the product, they will physically check it. 

Every company has a different return policy. Most of them allow their customers to put in return requests within 10 days of delivery as per their return policy.

Step 4: Refund initiation

Now, depending on the condition of the product and company’s return policy, companies decide the amount of refund. Some companies provide full refunds while some provide partial refunds.

5 Tips That can Help You Reduce the Amount of Returns in Your Business

Here are 5 tips by implementing which, you can make provide better customer service and reduce getting return requests from your customers:

1.  Improve product descriptions and upload real images

Not meeting consumer expectations is one aspect of returns. To avoid this, it is important to put detailed product descriptions so that customers could have a better understanding of the products and company’s quality assurance. This way businesses can reduce the amount of returns created due to misaligned expectations.

2. Provide detailed sizing and measurement charts

Clothes and shoes are frequently returned because of sizing issues. By offering detailed sizing and measurement charts, businesses can help customers choose the right size. This way they can avoid getting apparel returns because of size discrepancies.

3. Offer excellent customer service

Excellent customer service can assist businesses in resolving problems and avoiding returns. They should answer queries and complaints from clients in a timely and respectful manner. Companies should train their customer service team on how to handle challenging situations with empathy and patience.

4. Improve packaging and shipping methods

Another reason behind customers’ requests for E-commerce returns is getting damaged items because of improper or loose packaging and mishandling during the shipping process. To avoid this, businesses should start using sturdy boxes and protective packaging materials. To avoid shipping damages, they should partner with reliable shipping carriers. 

5. Offer flexible returns policy

To improve your customer satisfaction and consumer retention rate, companies should offer customer-facing returns policy and enable their customers to have extended returns period, no return shipping charges, and store credit in lieu of refund. This way customers’ trust factor increases and businesses’ brand image remains intact.

3 Returns Management Tools to Look For

In order to streamline and smoothen the return process, businesses should start adopting return management tools. These tools make it easy to manage return requests and automates most of the processes involved in it.

There are many returns management software available in the market, but focusing on reviews, benefits, and user-friendliness, we have sorted out the best 3 of them and they are:

1. Loop Returns

Rating: 4.6

For online businesses, Loop Returns is the best returns management solution. The platform enables companies to design a return portal that is customized to their needs, speeds the returns procedure, and produces insightful consumer feedback. The platform also promotes exchanges that have benefits like happier customers and revenue retention.

Customers get the option to use a QR code to initiate the return process with Loop Returns, eliminating the requirement to print a shipping label. More than 1,600 Shopify brands, including Chubbies, Cotopaxi, and Patagonia, have benefited from Loop Returns’ assistance in automating more than 20 million returns and retaining more than $700 million in sales.

The business was started in Columbus, Ohio, and today has over 160 employees working for it in North America. With its focus on creating a seamless returns experience for both businesses and customers, Loop Returns has established itself as a reliable partner for e-commerce stores looking to streamline their returns process and increase revenue retention.

2. ReturnLogic

Rating: 4.8

Customizable workflows by Return Logic can automate procedures like printing shipping labels, tracking return shipments, and maintaining inventory.

Additionally, ReturnLogic offers warranty processing for accepting warranty claims from purchases made from third parties as well as strong insights and analytics to assist businesses in streamlining their return processes. One of its special features is an adaptable return portal, which promotes customers to replacement items rather than ask for refunds and helps businesses retain income and lessen the effect of returns on their earnings.

The goal of ReturnLogic is to make ecommerce returns and exchanges simple for both customers and business owners. Businesses can streamline their returns process and increase customer satisfaction with the help of its branded returns portal and all-in-one management platform. In general, ReturnLogic is a useful tool for e-commerce companies aiming to streamline their returns process and increase revenue retention.

3. Returnly

Rating: 3.5

With the help of Returnly, a retail returns management solution, ecommerce business owners can design unique return portals that speeds up the returns process. Businesses can use Returnly to create a user-friendly and appealing return portal that includes automated rules that help them control when and how to process returns.

Additionally, Returnly provides robust analytics and returns information that companies may use to better optimize their returns process. Businesses can make informed decisions that enable cost savings and the burden of managing returns by utilizing this data to discover patterns and trends in their returns.

Save Your Time and Money on Returns & Exchange With Less Traveled Routes on Upper

When the product is returned to the customer, you will require efficient delivery that sends packages to the customers on time. Upper Route Planner helps you to improve your returns management process by allowing you to plan optimized routes. 

Since eCommerce businesses like yours have multiple orders to return or deliver for the first time, Upper helps you schedule optimized routes in advance. Moreover, you do not have to spend much time adding addresses manually as you can directly import them.

No matter how many delivery stops, you can dispatch routes to drivers in just a single click. Hence, from planning delivery routes to capturing proof of delivery; Upper ensures your talisman delivers the return product at the right location in a minimum time.

Upgrade to Upper for Best Routes

Simplify your process and boost your productivity with perfectly planned routes. Let Upper sets you free from calculating routes manually.


Companies that provide “returns” option to their customers to let them return a product, get benefits after utilizing improved return management processes. E-commerce businesses and major retail businesses that offer delivery of products are the beneficiaries of return management services.

Definitely, having a return and refund policy is a key to boost sales. By reading the policy, customers can get a clear idea of their doubts like when and how a return request can be made, what are its conditions, are there any return shipping fee, how much refund is applicable, and if there is any option to exchange the product.

Yes, returns are going to have a huge impact on your supply chain process. You would have to bear additional costs like shipping charges, labor costs, face huge backlogs of packages, and disturbed inventory management system.


Overall, it is important for e-commerce businesses to pay attention to returns handling. Customer returns can have a big impact on a company’s profitability, but with the correct tools and strategies in place, you can manage returns well and even turn them into a competitive advantage. 

Online retailers can lessen the negative effects of returns on their business and boost customer satisfaction and customer loyalty by offering a clear and user-friendly return policy, streamlining the returns procedure, and using return data to guide business choices.

One of the important upgrades a business can make is by adopting a route planner software. The route planner like Upper comes with multiple routing features namely, route planning

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.