Ecommerce returns are skyrocketing. In 2024, U.S. retailers saw $890 billion in merchandise returned (roughly 16.9% of sales). This “$890B problem” forces brands to rethink reverse logistics, turning returns from cost centers into strategic opportunities. In 2024–25, innovations from new platforms, carrier programs, and data-driven tools are reshaping how DTC and marketplace sellers handle returns. We highlight ten actionable strategies emerging from U.S. industry trends, with real-world examples (Amazon, Walmart, Shopify) to guide ecommerce merchants toward a leaner, greener, and more profitable returns process.
1. Embrace Peer-to-Peer (P2P) Returns
Innovative “peer-to-peer” returns programs allow a customer’s return to be shipped directly to the next buyer instead of back to a warehouse. Cahoot’s new P2P Returns program (launched in 2024) is a prime example. When a customer initiates a return, the item is immediately relisted for resale; once another shopper buys it, the returner ships it directly to that buyer using the original packaging. This cuts out two legs of shipping and processing, reducing costs by as much as 50%, and speeds up “unsold” inventory turning into revenue. It also slashes carbon emissions, appealing to eco-conscious shoppers. For example, Cahoot reports that nearly 48% of returns can be resold immediately via its network.
Action: Sign up for Cahoot’s Peer-to-Peer Returns program to make your returns profitable. https://pages.cahoot.ai/cahoot-peer-to-peer-returns/
2. Use “Returnless” Refunds for Low-Value Orders
For low-cost or high-abuse items, sometimes the best return is no return at all. In 2024, Amazon rolled out FBA “Returnless Resolutions”: sellers can refund customers without requiring a physical return (for eligible items under about $75). This “keep it” option saves shipping and restocking fees. Walmart offers a similar concept: their Marketplace “Enhanced Returns” program lets sellers set “Keep It” rules so certain items are refunded without collecting the product. Even carriers note this trend: FedEx reports some retailers now simply issue full refunds (or credits) and let customers keep cheap returns, avoiding the entire reverse journey.
Action: Consider offering returnless refunds for inexpensive or low-margin products. For example, an Amazon seller might automatically refund a $20 gadget to a vetted customer, rather than pay two-way shipping. Just be sure to limit this to non-abused accounts and lightweight goods (as Amazon does), since electronics or premium items are usually excluded. This tactic can dramatically cut reverse-logistics costs and improve customer goodwill for small-ticket returns.
3. Leverage Omnichannel Drop-Off Points
Giving customers convenient return locations boosts satisfaction and cuts lead times. Major carriers and retailers are expanding their drop-off networks: In spring 2025, FedEx Easy Returns launched a QR-code system using 3,000+ FedEx Office and Kohl’s stores as label-free, box-free drop-offs. This means a customer can pop returns into any FedEx Office or Kohl’s kiosk, then FedEx consolidates and ships them back to the seller. Similarly, Walmart’s Enhanced Returns harnesses its omnichannel footprint: Walmart Marketplace now touts 4,600+ store drop-off locations for returns. (If you sell via Walmart Fulfillment Services, Walmart handles returns end-to-end for you.)
Action: Integrate these networks into your policy. For example, let customers drop off returns at any nearby FedEx Office/Kohl’s (using FedEx’s QR system) or at Walmart stores. This saves postal hassles and speeds processing. You might partner with FedEx to advertise the FedEx Office return points on your site, or note on your returns page that Walmart orders can be returned to their in-store return kiosks.
4. Partner with Consolidated Returns Services
Beyond traditional parcel shipping, specialized reverse-logistics networks offer cost-efficient return funnels. For example, UPS’s Happy Returns (acquired by UPS in 2023) operates a network of over 10,000 “Return Bar” kiosks inside partner stores (Ulta, Staples, etc.). UPS now consolidates those returns and ships them in bulk back to merchants. Clients like children’s retailer PatPat praise this setup: more UPS stores with drop-boxes “made the process easy” and saved time. FedEx and DHL are following suit: FedEx’s Easy Returns (above) emphasizes consolidation, combining many customer returns into one shipment to cut packaging and tracking costs. DHL Supply Chain even acquired Inmar (a returns specialist) in 2024 to boost its reverse-logistics offerings.
Action: Explore these platforms for your returns. As a Shopify or DTC brand, sign up for Happy Returns (so customers can return at UPS stores), or allow FedEx Easy Returns drop-offs. These services often include built-in inspections and fraud checks, reducing manual work. Use them especially for high-volume, small-item returns (FedEx notes Easy Returns is ideal for lightweight apparel/accessories).
5. Integrate Smart Returns Technology and Analytics
Modern reverse logistics increasingly relies on software. Use analytics and AI to predict, prevent, and streamline returns. For instance, Pacific Data Integrators reports that AI tools can identify “why products are returned, who is returning them, and where” by analyzing historical data. Armed with this insight, retailers can improve product listings (better sizing charts, richer images) and tailor marketing to likely returners. Shopify advises high-volume merchants to use integrated platforms: apps like Loop Returns, Happy Returns (UPS), Narvar, or Returnly (Affirm) plug into Shopify stores to automate label creation, track returns, and even give customers portals for exchanges. Outsource if needed: Shopify’s own Fulfillment Network (SFN, aka Flexport) can manage returns and restocking for large merchants.
Action: Adopt a returns management system (RMS) or app. For example, connect your Shopify store to a returns app that automatically handles refunds, exchange labels, and restocks. Use AI-powered reports (or supply-chain analytics) to flag high-return SKUs and customer segments. Over time, refine products and policies based on this data; the goal is to streamline processing and reduce the 17% industry average return rate.
6. Optimize Marketplace-Specific Solutions
If you sell via marketplaces, leverage each platform’s reverse-logistics offerings. On Amazon, ensure you meet performance criteria so you qualify for FBA perks (including the new returnless option). Watch Amazon’s fee changes; for instance, in mid-2024, Amazon raised FBA returns processing fees on high-return products to recoup costs. On Walmart Marketplace, consider enrolling in Walmart Fulfillment Services (WFS): Walmart then “will handle the returns process for you”, taking shipping, inspection, and restock off your plate. (WFS also gives you access to the large store network.)
Action: Tailor your return strategy to each channel. For Amazon FBA, review which of your products qualify for Returnless Resolutions (typically low-weight, non-hazardous, <$75). For Walmart, turn on Enhanced Returns and “Keep It” rules in your seller account, and consider WFS if your volumes justify it. These channel-specific tools can save thousands by automating or simplifying common return scenarios.
7. Improve Product Info and Fit to Prevent Returns
A huge chunk of returns stem from misinformation. Shopify notes that returns often happen because products didn’t match descriptions or fit properly. (For example, clothes with no size guide or misleading photos see much higher return rates.)
Action: Invest in accuracy. Enhance online listings with detailed specs, 360° photos or video, and clear size charts or virtual try-on tech. For example, apparel brands can use augmented-reality fitting rooms or allow customers to filter by size, reducing guesswork. Continuously collect and act on feedback: if analytics show a specific SKU is returned 3x more than average, re-evaluate how it’s shown online. Over time, these steps will cut unnecessary returns at the source and improve customer satisfaction.
8. Make Returns Sustainable and Circular
Sustainability is a growing priority in logistics. Streamlining returns not only saves money but also “turns returns into part of the circular economy,” notes the NRF, which now treats reverse logistics as key to retail sustainability. For example, Cahoot’s P2P model explicitly touts environmental benefits: it “lowers carbon emissions” by eliminating extra shipping steps. FedEx highlights that its Easy Returns consolidates shipments “for optimal recovery”, reducing waste.
Action: Adopt “green” practices. Encourage customers to reuse original packaging (and use eco-friendly materials). Route returns through certified refurbishers or secondary markets (e.g., Amazon Warehouse or eBay’s Refurbished) whenever possible. Donate or recycle unsellable items. In marketing, communicate your green returns policy; modern consumers value eco-friendly logistics and may pay premiums for brands that minimize waste.
9. Streamline the Customer Experience
A hassle-free return is good for loyalty. Every piece of friction you remove (fast refunds, easy labels, clear instructions) helps keep customers buying. As Shopify warns, “customer retention is at risk if your reverse logistics supply chain doesn’t meet expectations”. For example, many retailers now promote in-store returns: Walgreens actually incentivizes returns of FedEx-shipped items at its stores, because making returns convenient (and steering foot traffic into stores) builds loyalty.
Action: Audit your returns customer journey. Provide easy online access to print return labels or QR codes. Offer prepaid return shipping wherever viable, or at least store drop-offs. Communicate clearly: send timely emails/SMS with tracking updates. And when feasible, turn a return into an opportunity; offer instant exchanges or store credit on the spot. Fast, transparent returns (even if an item is defective) can turn unhappy buyers into repeat customers.
10. Track Metrics and Continual Improvement
Finally, treat reverse logistics as a strategic discipline. Set measurable goals (e.g., reduce return rate by X%, cut return processing cost per order). Benchmark against industry: recall the ~17% return rate and 20 – 65% cost of value per return reported by NRF. Regularly review your data: why are returns spiking (e.g., seasonally or with certain channels)? Stay informed on new industry developments; the NRF’s Retail Sustainability reports and conferences (like the new RLA conferences under NRF) are helpful to keep up with cutting-edge practices.
Action: Schedule quarterly “returns reviews” in your operations plan. Use KPIs (return rate, cost per return, net promoter impact) to guide decisions. If a new solution (like an AI tool or returns app) has emerged, pilot it. Continually refine policies (for example, stricter return windows for abuse-prone items, or adding restocking fees if margin allows). By making returns a regular part of your strategy review, you’ll turn 2024’s lessons into 2025’s competitive advantage.
Conclusion
Efficient reverse logistics is no longer an afterthought but a frontline strategy for ecommerce. By embracing these 2024 – 2025 best practices, from Cahoot’s P2P returns and Amazon’s returnless refunds to AI-driven analytics and sustainable recovery, sellers can dramatically cut costs, recover value faster, and keep customers happy. The landscape is evolving quickly: carriers and marketplaces are rolling out new returns services and data tools every year. The next step for any DTC or marketplace retailer is to audit your current returns flow and plug in the innovations above where they fit. Collect the data, test these methods, and iterate. With returns reaching nearly 17% of sales, fixing the reverse supply chain is urgent and rewarded: those who act now will lead the pack in 2025 and beyond.
Frequently Asked Questions
What is peer-to-peer (P2P) returns, and how can it benefit my ecommerce store?
Peer-to-peer returns let a customer ship a returned item directly to another buyer who purchases it, rather than sending it back to a warehouse. Cahoot’s P2P program, for example, relists returnable items immediately and connects them with new buyers, eliminating two legs of shipping, cutting costs by up to 50%, and recovering value faster. This model also reduces carbon emissions and speeds up inventory turnover. If you handle a high volume of clothing or consumer goods returns, integrating Cahoot’s P2P Returns can boost your margins and sustainability. Learn More.
How do “returnless” refunds work, and when should I use them?
Returnless refunds allow you to issue a full refund or store credit without requiring the customer to ship back low-value or high-abuse items. In mid-2024, Amazon expanded its “Returnless Resolutions” for eligible items under $75, and Walmart’s Marketplace “Keep It” rules operate similarly. By offering returnless refunds on inexpensive products, like a $20 accessory, you save on reverse-shipping and restocking fees. Just limit this option to lightweight, non-hazardous products and vetted customers to prevent abuse.
Which carriers or networks offer the best drop-off options for returns?
In 2024 and 2025, major carriers expanded their drop-off footprint:
- FedEx Easy Returns uses QR codes at over 3,000 FedEx Office and Kohl’s stores, allowing box- and label-free drop-offs.
- UPS Happy Returns maintains 10,000+ “Return Bar” kiosks in retailers like Ulta and Staples, consolidating returns for bulk shipping.
- Walmart’s Enhanced Returns offers 4,600+ store drop-off locations for Marketplace sellers, and WFS (Walmart Fulfillment Services) handles returns end-to-end for enrolled merchants.
Integrating these networks into your policy reduces shipping hassles, lowers costs, and speeds return processing.
How can I leverage data and technology to reduce return rates?
Use AI-driven analytics and returns management software (RMS) to uncover “why products are returned” and “who is returning them.” Platforms like Loop Returns, Happy Returns (UPS), Narvar, and Returnly (Affirm) integrate with Shopify and other ecommerce platforms to automate label creation, track return status in real time, and generate insights. If you see a particular SKU returning 3x more than average, you can update its product description, add clearer sizing charts, or adjust imagery, preventing future returns. Regularly reviewing these metrics can help you cut the industry average 17% return rate and improve customer satisfaction.
What sustainability practices should I adopt for reverse logistics?
To make returns more eco-friendly:
- Encourage customers to reuse original packaging and employ recyclable materials for mailers or void fill.
- Route unsellable returns to certified refurbishers or secondary marketplaces (e.g., Amazon Warehouse, eBay Refurbished) to extend product life.
- Donate or recycle irreparable items rather than sending them to landfills.
Highlight any green initiatives in your marketing; customers appreciate brands that minimize waste. By focusing on circular economy principles (like Cahoot’s P2P returns, which cut out extra shipping, ThredUp, Plato’s Closet, and the like), you reduce carbon emissions and demonstrate your commitment to sustainability.