Online Retailers

Returns Management: How to Manage Returns Effectively

By Danielle Allen
Returned Package

This article will explore what returns management is and what an effective returns management process consists of. We’ll look at the steps and processes that build an effective returns management strategy and how your business can use these tips to improve your product returns process. The second part of this article will discuss how to manage returns, looking in detail at your returns policy and the option to outsource returns. 


When selling products online, product returns are inevitable. Whether it’s clothes that don’t fit, fragile goods that are damaged, or electronics that are faulty, consumers will return their items if they aren’t as expected. 


Efficient and effective product returns management is part of the customer journey that is as important as sale and order management. It is important to make sure your customers have a clear understanding of your returns policy and that it meets any requirements set out by consumer rights.


What is returns management?


Returns management is the strategy and processes put in place by your business to handle product returns efficiently and effectively. It controls the lifecycle of returned products, from the return request to arrival at the warehouse through to resale or scrappage. 


An effective returns management process considers:




A Return Merchandise Authorisation (RMA) or the request from a customer to return goods is typically the start point of the returns process. On receipt of a return request the customer can be asked the reason for return, key details and issued a return shipping label as appropriate. 


Receiving and inspection


On receipt, the products need to be verified and inspected to determine their condition, and check for any damage, missing parts, or discrepancies. Read our guide on the receiving process and the best practices to follow.


Tracking and documentation


Accurate tracking and documentation are essential. Each returned item should be assigned a unique identifier like the original order number and SKU, and key information such as the reason for return, customer details, and product condition should be recorded.



Returned items are normally categorised based on their condition, common groupings may be resalable, damaged, or defective. Categorisation helps determine what to do next in the returns process.



Products in re-usable condition might be returned to the inventory for potential resale. This may involve some rework like cleaning, repackaging, or relabelling.

Refunds and exchanges


Refund or exchange processes can be crucial for non-consumable goods for customers whose returns meet a defined criteria. Accurate and timely processing of refunds or exchanges is often a key factor for return business and customer satisfaction.

Repair, refurbishment, or disposal


In the case of damaged or defective items, the returns process should identify the best possible cause of action to minimise waste. Often this will involve repair or refurbishment to relist as B stock items. Sometimes disposal is the best route forwards, and your process should log the scrapped quantity.


Analytics and feedback


Logging key data like return reasons, regularly returned items, and repeated returns from the same customer can provide valuable insight, allowing your business to identify patterns and areas for improvement. Analysing return data can help make inventory decisions and improve the quality of service and customer experience. Learn about 14 important warehouse KPIs for improved operations


5 Ways to help manage returns efficiently


1. Returns policy


A returns policy should be clear and accessible to customers. A good returns policy considers the following points: 


  • Clear and transparent communication.
  • Reasonable timeframe for returns.
  • Flexible return options.
  • Fair and consistent treatment of customers.
  • Reasonable condition requirements.
  • Easy and convenient return process.
  • Responsive customer support.
  • Transparent refund processing.
  • Continuous improvement based on feedback.
  • Compliance with legal requirements.


2. Dedicated resources to process returns


Having a dedicated resource for returns management is important as processes can be complex. It ensures efficiency in processing returns promptly, enhances customer satisfaction by prioritising return requests, provides valuable insights for quality control and process improvement, enables accurate tracking and reporting of return data, helps reduce costs associated with returns, ensures compliance with legal requirements, and allows businesses to continuously refine their returns management processes for optimal efficiency and customer service.


3. Outsourcing returns


Working with a third-party returns management company offers benefits such as specialised expertise, scalability, cost savings, efficient processes, enhanced customer experience, access to analytics, and international capabilities. It allows businesses to optimise returns management while focusing on core operations and growth.


4. Charging for returns vs. free returns


  • Charging for returns can discourage customers from over-ordering, for example, ordering multiple sizes and sending back those that don’t fit.
  • Free returns can provide a positive impression for customers, as it makes life easy for them if the items are not as expected.


5. Returns management software 


Adding returns management software to your tech stack can further streamline your returns process by utilising automation. Returns management software can help you automate customer communications during the returns process, process refunds when required and give you better visibility and tracking of the returned goods.


Businesses do not need software to manage returns; however ultimately, the decision of how to manage returns will depend on your individual business requirements.


Returns management made simple with Mintsoft


In summary, returns management plays a vital role in maintaining customer satisfaction, reducing costs, managing inventory, and improving overall business operations for a fulfilment business.


A good returns process can be a key differentiator in growing your business and customer base.


After learning about the role of restocking in returns management, you might also be interested in learning why warehouse stock control systems are so important.  


Mintsoft’s cloud-based warehouse management software can help you manage returns, providing insights and data on all parts of the returns management process. Helping businesses keep their customers happy. Book a 1-1 demo today to see how Mintsoft can help your business with returns management. 

Danielle Allen
By Danielle Allen Digital Content Manager

Danielle is a content writer at Access Mintsoft with an abundance of experience in the new and emerging technologies sector. Dedicated to providing ecommerce retailers and 3PL’s informative and easy-to-understand content that engages and empowers readers to learn about all things ‘order fulfillment’.