A Guide to Turning eCommerce Returns Into Revenue

Cover Image for A Guide to Turning eCommerce Returns Into Revenue
Tomasz Żmudziński
Tomasz Żmudziński


In the vibrant and dynamic world of e-commerce, a successful retailer must be a savvy navigator capable of sailing the turbulent seas of the ever-evolving digital marketplace. One of the key challenges that every online retailer faces is the issue of returns. Often seen as a cost to be minimized, returns are typically viewed negatively. But what if we flip the script and start viewing returns as a potential source of revenue instead?

This may seem unconventional, but many successful retailers are unlocking hidden revenues by streamlining their return process, improving customer satisfaction, and ensuring that returned merchandise gets quickly back into the selling cycle.

Table of contents

Understanding the Importance of a Good Returns Policy

When consumers choose to shop online, one of the factors they consider is the return policy of the e-commerce store. In fact, according to a report by Statista, when online purchases are returned, 92% of consumers will buy again if the product return process is easy. Conversely, a complicated returns process can make customers hesitate to make the first purchase.

Having an easy return policy is especially crucial for products like clothes, shoes, and other items that need to fit perfectly. Since customers can't try these items before buying, there's a higher likelihood of returns. While this might seem like a setback, this is an excellent opportunity for businesses to impress customers with a seamless return process and build lasting relationships.

Turning Returns into a Revenue Stream

The first step in transforming your returns process is by implementing a 'hassle-free' returns policy. While it may seem counterintuitive to encourage returns, this strategy can pay off multifold in terms of customer loyalty, repeat purchases, and positive word-of-mouth advertising.

Next, ensuring that returned stock is quickly back on the shelf for resale is critical. Innovative solutions like automated return systems can re-list products as soon as they are scanned in the return warehouse. These solutions not only recoup lost sales but also save on storage costs for returned items.

Another strategy is to use return behavior data to provide personalized marketing. Predictive analysis can identify patterns in return behavior and allow retailers to preemptively suggest substitute products that are likely to better meet the customer’s needs.

One of the most untapped sources of revenue from returns is selling returned goods on secondary markets. Many returned goods can't be sold as new. However, there is a growing market for returned, refurbished, and overstock goods which retain much of their value. Websites such as B-Stock or Liquidity Services can help retailers recoup a significant portion of the product value.

Beyond Returns: Exchanges, Upsells, and Cross-Sells

Transforming return transactions into exchanges, upsells, or cross-sells is an excellent way to turn returns into revenue. During the return process, online stores can offer customers options to exchange the product for an alternative or to buy related products. Offering discounts on the next purchase or bundle deals are effective ways of incentivizing exchanges and upsells.

Leveraging Technology to Streamline the Returns Process

Implementing a robust return management system can significantly help streamline the returns process and minimize manual errors. Return management software, also known as RMS, can automate many aspects of the return process — from managing return merchandise authorizations (RMAs) to processing refunds and generating reports.

Using AI and Machine learning can also help online stores offer personalized return solutions. Artificial intelligence can create dynamic return pages to guide the customer through the return journey based on their purchase history and return behavior, ultimately increasing customer satisfaction and loyalty.


In conclusion, while returns are often viewed as a drain on resources, they also present a significant opportunity to generate revenue, increase customer satisfaction, and build long-term customer relationships when managed smartly. Always remember - every return is an interaction with a customer, and every interaction is an opportunity for business expansion and revenue generation. By investing in a streamlined and efficient returns process, online retailers can prepare themselves to capitalize on these opportunities and maximize their overall revenue.