Refunds vs. exchanges: How to turn product returns into a powerful retention tool

"Product returns are unavoidable in e-commerce. But how you handle them is what separates a one-time buyer from a lifelong customer. Today, a convenient return policy isn't a perk; it's the price of entry. Consider this: Nearly 70% of shoppers will jump to a competitor that offers easier returns-a sharp 25% increase from last year, according to a 2025 report from ShipStation."

"Lost product value and inventory delays: While an item is in transit and you wait to turn it back into sellable inventory, its value can drop. Fashion, electronics, and other fast-moving items may miss peak sales or seasonal demand, forcing you to discount or liquidate the stock entirely. Restocking and refurbishment needs: Not all returned items go right back on the shelf. Many require inspection, cleaning, repair, or repackaging, adding more labor and material expenses."

Returns are inevitable in e-commerce, and a convenient return policy has become essential as most shoppers prefer easier returns. Returns generate tangible and hidden costs including reverse logistics, shipping and labor, lost product value during transit, missed seasonal demand, and expenses for inspection, cleaning, repair, or repackaging. These costs also create opportunity costs by diverting staff and space. Businesses must choose whether to prioritize refunds or encourage returns, and can reduce expenses by redesigning the returns strategy. A customer-focused, efficient returns process can build trust, recover value faster, lower processing costs, and increase the likelihood of repeat purchases.

Read at Miami Herald