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Hidden Levers in Returns

Returns at Scale: The Hidden Levers Most Merchants Miss

Most retailers treat returns as a cost, missing key levers that turn them into revenue. As return rates rise 10–15% each year, smart reverse logistics is now essential to protect margins and customer loyalty.
Daniel Gibson
Software Engineer
Date
January 14, 2026
Read time
4 min read
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If you're processing thousands of returns each month, you already know one thing:

Returns aren't going away.


What's less obvious is that most returns operations break down not because of volume but because of decisions made after the return is initiated. This is where reverse logistics quietly becomes either a margin drain or a competitive edge.

Here are the critical levers most growing merchants miss when scaling their returns operations.

1. The return isn't the problem - the delay is

Most return costs aren't created by the return itself, but by what happens next.

Every extra day an item sits in transit or in a warehouse queue it:

  • Reduces its chance of being resold at full price
  • Increases customer support tickets
  • Ties up cash you could be reinvesting

High-performing brands treat returns as a time-sensitive workflow, not a back-office task. The faster you move from "returned" to "decision made," the more value you preserve.

2. One return flow doesn't fit all

At low volume, a single returns process works fine. At scale, it quietly breaks.

A worn item, a wrong-size return, and an unopened product shouldn't follow the same path - yet many merchants force them through one generic flow.

The result

  • Slow processing times
  • Unnecessary handling cost
  • Missed recovery opportunities

Segmenting returns early - based on condition, reason, or destination - unlocks faster decisions and lower costs without adding operational complexity.

3. Refund timing is a strategic choice

Instant refunds feel customer-first. Delayed refunds protect cash flow. Most merchants treat this as a binary decision.

In reality, refund timing is a lever you can adjust based on different factors.

  • Some customers value speed above all else
  • Others value flexibility (exchanges, credits, incentives
  • Some returns don't need to come back at all

Smart returns strategies adapt refund logic based on risk, customer history, and item value - not just policy.

4. Marketplace returns deserve different rules

Returns coming from marketplaces often behave very differently from direct-to-consumer orders - in cost, speed, and expectations.

Treating them identically hides:

  • Channel-specific return patterns
  • Margin leakage from stricter SLAs
  • Opportunities to route inventory more efficiently

When return data is separated by channel, patterns emerge that directly inform pricing, listing strategy, and fulfilment decisions.

5. Returns data is product feedback in disguise

Return reasons are often collected - and then ignored.

At scale, this data becomes one of your most accurate sources of insight

  • Sizing issues that don't show up in reviews
  • Quality problems before they escalate
  • Content gaps that cause avoidable returns

Merchants who feed returns data back into merchandising and operations consistently reduce future return rates - without changing their catalogue.

The hidden cost of ignoring returns data

Our research with Shopify retailers shows that brands who actively use returns data to improve products see a 7-12% reduction in return rates within 90 days. For a brand processing 5,000 returns monthly with a £25 average handling cost, that's £93,750-£150,000 in savings per year.

Designed for returns at scale

At Last was built for merchants who've outgrown basic returns tools - especially those selling across multiple channels.

We help brands manage high-volume returns in one place, with full visibility across both direct and marketplace orders. From faster return decisions to smarter routing and clearer insights, At Last keeps returns moving without fragmenting your operations or your data.

If returns are starting to feel harder to manage as you scale, we'd love to show you what a unified returns system can unlock.

Get in touch or book a demo to see how At Last can simplify returns at scale.

Hidden Levers in Returns
Most retailers treat returns as a cost, missing key levers that turn them into revenue. As return rates rise 10–15% each year, smart reverse logistics is now essential to protect margins and customer loyalty.
Unpacked: A blog by At Last®
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