Reverse Logistics Practices

Most fashion brands treat returns as a loss. A number to minimize, a problem to hide in the P&L. Libas thinks about it differently. 25 to 27% return rate. Industry standard. Nothing remarkable there. What is remarkable is what happens after. Every returned item is back on sale within 24 hours. Refurbished pieces within 48 to 72 hours. 97 to 98% of returns are back in circulation before most brands have even processed the reverse logistics. Here is what the math looks like when you do not have this system. Say you are doing 1 crore in GMV a month with a 30% return rate. That is 30 lakhs in returned inventory. Now factor in reverse logistics at 80 to 100 rupees per order, quality checks, repackaging, and the holding time where that inventory is sitting dead and not generating revenue. Realistically, 20 to 25% of that returned inventory either gets written off or sells at a steep discount. You are not losing 30 lakhs. You are losing closer to 6 to 8 lakhs every single month, just on returns. At scale, this is the difference between a profitable brand and one that is constantly chasing contribution margin. When you engineer your supply chain to absorb returns at this speed, you stop bleeding on every return and start recovering it. Watch my full conversation with Sidhant to understand how Libas built this.(Link in comments) Kirti | Siddhika

Returns are still treated like an afterthought at many fast growing apparel brands. That is getting expensive. In 2026, retail returns are projected to approach $900B, with roughly 17–20% of online orders coming back, compared to 8–10% in-store. At the same time, consumers are becoming more value-conscious, and online continues to grow. That makes one thing clear: Returns can no longer sit outside the inventory strategy. The faster a brand turns returned units back into sellable inventory, the more it protects working capital, margin and availability. But in many apparel businesses, returned units still: - sit in a separate queue - get processed too late - stay invisible in weekly demand planning - miss the full-price resale window A few practical shifts worth implementing: 1. Restock high-demand products fast If a core size comes back, every extra day in processing is a missed sell-through opportunity. 2. Create a 3-way routing rule Every unit should quickly be classified as: restock, resale or unsellable. 3. Track time-to-resell Return rate tells you volume. Time-to-resell tells you if you are protecting margin. 4. Include returns in weekly inventory decisions Availability, allocation, and markdown reviews should include returns, not just warehouse and store stock.

𝗥𝗲𝘃𝗲𝗿𝘀𝗲 𝗟𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝟰.𝟬: 𝗧𝗿𝗮𝗻𝘀𝗳𝗼𝗿𝗺𝗶𝗻𝗴 𝗥𝗲𝘁𝘂𝗿𝗻𝘀 𝗶𝗻𝘁𝗼 𝗮 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲 𝗔𝗱𝘃𝗮𝗻𝘁𝗮𝗴𝗲 In the past, reverse logistics was often viewed as a costly necessity—managing product returns, waste disposal, and recycling with limited efficiency. But Industry 4.0 is changing the game. The primary aim of reverse logistics 4.0 is to help maximize the recovery of the remaining value from end-of-life (EOL) products and appropriately dispose of the non recyclables. By integrating IoT, AI, cloud computing, and blockchain, organizations are turning reverse logistics into a strategic enabler—reducing waste, cutting costs, and driving sustainability while unlocking new revenue streams. 𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗶𝘀 𝗺𝗲𝗮𝗻 𝗳𝗼𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀? • 𝗙𝗿𝗼𝗺 𝗿𝗲𝗮𝗰𝘁𝗶𝘃𝗲 𝘁𝗼 𝗽𝗿𝗲𝗱𝗶𝗰𝘁𝗶𝘃𝗲: AI and big data help forecast return volumes, optimize collection, and improve decision-making. • 𝗙𝗿𝗼𝗺 𝗳𝗿𝗮𝗴𝗺𝗲𝗻𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗻𝗻𝗲𝗰𝘁𝗲𝗱: IoT-powered tracking and blockchain create end-to-end visibility in reverse supply chains. • 𝗙𝗿𝗼𝗺 𝗰𝗼𝘀𝘁 𝗰𝗲𝗻𝘁𝗲𝗿 𝘁𝗼 𝘃𝗮𝗹𝘂𝗲 𝗱𝗿𝗶𝘃𝗲𝗿: Smart remanufacturing and resale extend product lifecycles, reducing waste and boosting profitability. 𝗧𝗵𝗲 𝗦𝗺𝗮𝗿𝘁 𝗥𝗲𝘃𝗲𝗿𝘀𝗲 𝗟𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 𝗳𝗼𝗰𝘂𝘀𝗲𝘀 𝗼𝗻 𝗳𝗶𝘃𝗲 𝗸𝗲𝘆 𝗮𝗿𝗲𝗮𝘀: 1. 𝗦𝗺𝗮𝗿𝘁 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝗼𝗻 – IoT-enabled bins, cloud-based tracking, and AI-powered demand sensing. 2. 𝗦𝗺𝗮𝗿𝘁 𝗦𝗼𝗿𝘁𝗶𝗻𝗴 & 𝗣𝗿𝗼𝗰𝗲𝘀𝘀𝗶𝗻𝗴 – Automated AI-driven sorting, real-time inventory tracking, and dynamic waste dashboards. 3. 𝗦𝗺𝗮𝗿𝘁 𝗥𝗲𝗺𝗮𝗻𝘂𝗳𝗮𝗰𝘁𝘂𝗿𝗶𝗻𝗴 & 𝗥𝗲𝗰𝘆𝗰𝗹𝗶𝗻𝗴 – Digital twins, predictive analytics, and AR-assisted maintenance. 4. 𝗦𝗺𝗮𝗿𝘁 𝗧𝗿𝗮𝗻𝘀𝗽𝗼𝗿𝘁𝗮𝘁𝗶𝗼𝗻 & 𝗗𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 – Fleet optimization, autonomous vehicles, and blockchain for transparency. 5. 𝗦𝗺𝗮𝗿𝘁 𝗗𝗶𝘀𝗽𝗼𝘀𝗮𝗹 – AI-driven landfill management, cloud-based leachate monitoring, and sustainable disposal solutions. 𝗜𝗻𝗱𝘂𝘀𝘁𝗿𝗶𝗲𝘀 𝗟𝗲𝗮𝗱𝗶𝗻𝗴 𝗥𝗲𝘃𝗲𝗿𝘀𝗲 𝗟𝗼𝗴𝗶𝘀𝘁𝗶𝗰𝘀 𝟰.𝟬 𝗔𝗱𝗼𝗽𝘁𝗶𝗼𝗻: 𝗘-𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲 – AI-driven return prediction & automated restocking. 𝗔𝘂𝘁𝗼𝗺𝗼𝘁𝗶𝘃𝗲 – Sustainable vehicle end-of-life disposal & part remanufacturing. 𝗘𝗹𝗲𝗰𝘁𝗿𝗼𝗻𝗶𝗰𝘀 – Smart WEEE recycling & resource recovery. 𝗣𝗵𝗮𝗿𝗺𝗮𝗰𝗲𝘂𝘁𝗶𝗰𝗮𝗹𝘀 – Real-time monitoring of expired/recalled drugs. 𝗥𝗲𝘁𝗮𝗶𝗹 – AI-powered seamless return experiences. The Future of Reverse Logistics is Smart, Data-Driven, and Sustainable Reverse Logistics 4.0 isn’t just about managing returns—it’s about creating new value, driving sustainability, and gaining a competitive edge. Ref: https://lnkd.in/df4NtCj2

Most fulfillment centers are designed to fail at returns. 📦 We spent decades optimizing for one direction: getting products out the door fast. But nobody planned for 20% coming back. The result? Returns sit in a corner, lose value, and bog down your outbound flow. Here's what I told Bridget McCrea and Modern Materials Handling Magazine: If you try to manage shipping and returns in the same facility, returns will always be the second priority. The solution isn't better prioritization. It's separation. ✂️ Smart operators are building dedicated return centers or partnering with specialists who use AI to sort, price, and resell at scale. With $890 billion in retail returns last year and online return activity up 40%, this isn't a nice-to-have anymore. It's infrastructure. Stop treating returns like an afterthought. Build for the reverse flow or watch your margins disappear. 📉 Read the full article: http://bit.ly/4gWCaS2 #SupplyChain #Logistics #Ecommerce #ReverseLogistics

Last year I had a call with the VP of ecommerce of a $300M+ retail company who was convinced their 32% return rate was "just the cost of doing business" When I dug into their data I discovered that almost half of post-purchase revenue loss is preventable. This happens all the time, retailers are pouring their heart and budget into hitting sales targets, only to watch a third of that revenue disappear due to inefficiencies and refunds. It's demoralizing to be a retailer these days. It doesn't have to be this way! Here's the playbook we used to help that company recover over $6.8M in just 4 months: Most retailers focus on the wrong metrics, for example they celebrate $10M in sales while silently losing $3.2M to returns, and another $1M to operational inefficiency, plus $800K to return fraud and abuse. Quick observations: Your "best customers" are killing you! 37% of "VIP shoppers" are serial returners, they look great in your CRM but they're negative margin customers. We found one customer returning over $14K → this is totally preventable! This is our framework that we developed after working with hundreds of enterprise retailers in the past 5 years: Prevent returns Enable size/style swaps and allow for uneven exchanges (more expensive or cheaper options) Store credit options instead of refund Relevant product recommendations for exchange and upsell Analyze the return reasons by product - this can save you a lot of products from being returned! Results: Over 60% reduction in refunds b) Prevent fraud and abuse Fraud rules to prevent return abuse Automate policy enforcement and verification of product quality before the product is sent back Product inspection workflows at the warehouse level Results: the highest we seen last year for a customer was over 90% c) Streamline Operations Setup rules for returns routing to the closest warehouse or outlet stores Minimize clicks and enable a scan, scan, refund workflow Centralize all returns data and actions into one system, to prevent system switching Results: 42% faster processing Returns are not a cost of doing business. They're a goldmine of hidden opportunities. But here's the truth: Most retailers will read this and do nothing. They'll keep losing millions because "that's just ecommerce." The smart ones will see this as the competitive advantage it is. What side do you want to be on? P.S. If you're a retail executive seeing 20%+ return rates, DM me. I'll share our full framework as it’s way more detailed.

We do 8 figures in Amazon sales every year. The FBA returns are a real problem. 𝗜𝗻𝘀𝗶𝗱𝗲 𝘁𝗵𝗲 𝗔𝗺𝗮𝘇𝗼𝗻 𝗢𝗽𝗲𝗿𝗮𝘁𝗶𝗻𝗴 𝗦𝘆𝘀𝘁𝗲𝗺 – 𝗗𝗮𝘆 14 𝗼𝗳 100 One of the least sexy parts of ecommerce is managing returns. We all love to sell truckloads, but sifting through truckloads of individual returns to separate new vs damaged vs fraud? ↳ It's a headache. Yet ignoring returns means tossing 1-3% of revenue in the trash, so serious brands bite the bullet and create a system. Here are the best ways to manage FBA returns: 1️⃣ 𝗨𝘀𝗲 𝗔𝗺𝗮𝘇𝗼𝗻'𝘀 "𝗙𝗕𝗔 𝗚𝗿𝗮𝗱𝗲 𝗮𝗻𝗱 𝗥𝗲𝘀𝗲𝗹𝗹" 𝗣𝗿𝗼𝗴𝗿𝗮𝗺 Amazon will evaluate and relist unfulfillable items without them leaving the FBA network. They charge a per unit fee, which is offset by not having to pay a removal/disposal fee. Enrollment is managed on a per ASIN basis. This is a great way to cut down on the returns that come back to your warehouse, but will not be a 100% solution. Also, it means trusting Amazon to correctly grade your returns, which can be risky for some product types. 2️⃣ 𝗣𝗮𝗿𝘁𝗻𝗲𝗿 𝘄𝗶𝘁𝗵 𝗮 𝗥𝗲𝘁𝘂𝗿𝗻𝘀 𝗣𝗿𝗼𝘃𝗶𝗱𝗲𝗿 There are a bunch of great companies who will receive, inspect and relist products on your behalf. Some may charge per unit, which others get a cut of the revenue when the returns sell. It's by far the easiest way to manage FBA returns since the products never come back to your warehouse. They can often even put returns for sale on alternate channels (eBay, liquidations, etc). This can be a massive win for categories with high return rates. A few companies to consider (though I have not worked with them personally): AMZ Prep®, Return Helper. 3️⃣ 𝗕𝘂𝗶𝗹𝗱 𝗮𝗻 𝗜𝗻𝘁𝗲𝗿𝗻𝗮𝗹 𝗦𝘆𝘀𝘁𝗲𝗺 Some teams opt to run returns fully in house. Setting up designated workstations and a returns processing schedule can be a great long-term investment for any DTC brand looking to scale. If your warehouse has the capability to inspect and sort individual packages, this options provides the greatest control, but is the most intensive. We have found that 50% or more of the items returned from FBA as "damaged" are still brand new. We can ship them back to FBA immediately and recapture the revenue. Also, having an internal feedback loop has helped surface customer experience issues. We've added tutorials or important disclaimers to detail pages to ensure customers are informed before checkout. We've built internally at Ballard House because owning the returns process allows us to quickly identify and resolve any quality concerns or fraud. In the end, the important thing for every brand is to look the returns problem in the eye and choose a solution. How do you manage returns today?

Most brands don't have a good returns process. The right technology makes it seamless. I have been in countless warehouses where the returned items are received at the furthest dock. Then put in the back of the building...in a pile...sorted through and processed over several days. Even to my surprise we did a project in the past where the customer said, “I don’t want the returns near the front of the building. It’s dirty and a mess.” (that statement started my mission to improve returns within the warehouse) Now with a combination of robotics and the right software, returns can be handled efficiently. It can become an asset to the fulfillment operation and the brand. 💰I did a study for an apparel brand which identified they could reduce inventory on hand by 10% resulting in a $5MM savings. They averaged 48 hours for processing returns. A shelf to person system like the one shown in the video incorporates all parts of the fulfillment operation. Inbound items are processed then put directly into the pickable location. The item is not touched again until an order is placed for it. The right software can work wonders. If a returned package enters the building that is currently out of stock or low on stock, it is given a high priority and routed by system directly to processing. A worker validates and processes the return then puts it into the pickable location. This puts the product back up on the storefront quickly for re-ordering. In stock items mean more sales for the brand and happier customers. Build a fulfillment system that works for every part of the operation, not just a happy path. Leave a comment or repost if you found this useful! ♻️ Q: Have you ever scrambled to find a product in a pile of returns?

Returns rarely come back neatly. They come back opened. Damaged. Expired. Mixed. Unlabeled. Recalled. Refused. Partially used. Or simply no longer fit to go back into commerce. That is where reverse logistics stops being a movement problem. It becomes a decision problem. Operations wants the space back. Supply chain wants the product moving. Quality may need control. EHS may need classification. The customer may need proof. Procurement needs a process that can work across more than one site. Moving it quickly matters. But speed without a clear owner, a defensible classification, and a documented final path only pushes the question downstream. Not every return is waste. Not every stream belongs in the same outlet. And not every site needs the same answer. A strong reverse logistics program does more than clear the dock. It makes the next decision easier to follow, easier to execute, and easier to prove later. The return may be non-saleable. The decision still has to be clean. For the teams managing returned or non-saleable product, where does the handoff most often slow down: Classification, customer approval, or final disposition documentation?

Reverse Supply Chains Deserve Forward Thinking! Too many companies treat returns like a leaky faucet that you can't be bothered with, while your water bill keeps going up and up. Just published by the Global Supply Chain Institute at the University of Tennessee, this white paper from Huseyn Abdulla, Ph.D. and Thomas Goldsby introduces a bold, integrative framework to tackle the returns conundrum through: People – Who owns returns? Who enables or prevents them? Policies – Are your return policies hurting loyalty—or margins? Processes – Are inefficiencies driving returns before they happen? Products – Which categories need tailored return strategies? Partners – Who’s helping you—or hurting you—on the back end? Download the full white paper here: https://hubs.la/Q03HKSbf0 #returnsmanagement #ecommerce #retailstrategy #reverselogistics #GSCI