Why a return is a business signal, not just an operational cost?

In e-commerce, a product return is one of the clearest indicators that customer expectations were not met at an earlier stage of the purchase journey, whether during offer evaluation, product information review, or the decision-making process itself.

Returns are the point at which accumulated errors or misalignments become visible, most commonly in areas such as:

• product assortment and availability,
• marketing communication,
• product descriptions and product-to-customer fit,
• delivery and fulfillment processes.

Unlike surveys or customer declarations, a return represents actual behavior rather than stated opinion, which is precisely why it carries such high analytical value.

Industry data confirms that this is not a marginal operational issue. Average return rates in e-commerce significantly exceed those in brick-and-mortar retail (approximately 30% vs. under 9%). In categories such as fashion or footwear, returns are a structural component of the online sales model. Returns, therefore, are not an exception—they are a systemic source of insight into the quality of the shopping experience.

See also: One-click returns – is your business ready?

Turning returns data into actionable e-commerce decisions

Effective returns analysis must begin with a clearly defined data operating model. In practice, many organizations stop at monitoring the return rate a metric that describes scale but rarely drives decisions or operational change.

To turn returns into business value, organizations need a consistent framework that moves from problem identification to root-cause understanding, implementation of corrective actions, and impact measurement. The following sections outline an iterative returns-analysis model that treats returns as an ongoing management process rather than a one-off analytical exercise.

Stage 1: defining the business objective and context

Returns analysis should always start with the business objective, not the data. Otherwise, there is a risk of generating insights that are interesting but decision-irrelevant.

Typical objectives include:

• cost reduction,
• margin improvement,
• increased customer satisfaction,
• reduction of returns within a specific category.

Each objective leads to a different analytical approach.

At this stage, it is also critical to place returns in a broader business context. Industry benchmarks show that high return rates are not always anomalies in certain categories (e.g. fashion), they are an inherent characteristic of the online sales model.

Structuring logistics data in returns root-cause analysis

One of the biggest challenges in returns analysis is fragmented logistics data:

• multiple carriers,
• inconsistent statuses,
• varying SLAs,
• no single reference point.

As a result, analysis often ends with isolated observations rather than a holistic view of delivery and returns performance.

In this context, the Innoship reporting dashboard can act as a data-unification layer, particularly for delivery execution and returns handling. Consolidating logistics data into a single view enables analysis of relationships between delivery performance and return decisions, such as:

• correlation between delivery time and return initiation,
• differences across carriers and delivery methods,
• frequency of logistics incidents, including transport damage.

Stage 2: data preparation and integration

A mature analytical approach requires integrating data from multiple domains:

• order management systems,
• returns (RMA) processes,
• warehouse operations,
• customer service,
• PIM systems,
• marketing platforms.

Only this combined view makes it possible to connect a return with what the customer saw before purchase, how the product was delivered, and how post-purchase service was handled.

In practice, organizations should aim to build a single, consistent “return view” that combines transactional and contextual data. Missing even one of these elements limits analysis to symptoms rather than root causes.

Stage 3: diagnostic analysis – from overview to detail

A common reason for failed returns analysis is poor-quality reason codes. Broad categories such as “other” or ambiguous descriptions prevent meaningful operational conclusions, even with large data volumes.

This is why a simple but consistent taxonomy of return reasons is essential. It should translate customer-declared reasons into organizational root causes and clearly distinguish between:

• product issues,
• communication issues,
• logistics failures,
• process-related problems.

The structure does not need to be complex, but it must enable actionable differentiation.

Stage 4: identifying root causes

Once data is structured, proper diagnostic analysis becomes possible. It should always progress from general to specific:

• overall return trends over time,
• differences across categories, channels, or suppliers,
• deep dives into specific SKUs or variants.

This approach avoids two extremes: focusing on isolated “loud” cases or remaining at an overly aggregated KPI level. The critical outcome is identifying a small number of areas that generate a disproportionately high share of returns cost—these should become the focus of corrective action.

Stage 5: prioritization and implementation

Analytical insight has no value unless it leads to decisions. The operational model for returns analysis must clearly define ownership and prioritization criteria.

The most common approach is to assess:

• financial impact,
• implementation complexity,
• potential risk to conversion.

Importantly, many effective return-reduction initiatives do not involve tightening return policies. Instead, they focus on earlier stages of the purchase journey, such as:

• improving product content,
• upgrading image quality,
• clarifying sizing information,
• aligning marketing promises with actual product attributes.

Stage 6: measuring impact and iterating the process

The final and often overlooked element of the model is impact measurement. Every initiative should have predefined success metrics, not only in terms of reduced return rates, but also impact on margin, conversion, and customer satisfaction.

Logistics and consumer data consistently show that organizations treating returns as a continuous customer-experience optimization process achieve a better balance between revenue growth and operational costs.

Logistics as a fast validation layer

In logistics, impact measurement is particularly valuable because operational changes translate quickly into measurable outcomes. Changes to carriers, delivery methods, or SLA parameters can be evaluated almost in real time using metrics such as:

• delivery lead time,
• number of exception events,
• share of delivery-related returns.

At this stage, the Innoship dashboard enables before-and-after performance comparisons without manual data consolidation from multiple sources. This makes logistics one of the first areas where organizations can validate the effectiveness of their decisions.

This approach is complemented by centralized management of the returns process itself, covering both reverse-shipment execution and operational statuses. Centralizing returns handling within the Innoship Returns Module makes it easier to link logistics data with return-process stages, increasing end-to-end transparency and enabling precise identification of delays or cost drivers.

As a result, impact measurement extends beyond delivery alone to cover the full return lifecycle from initiation to final settlement.

Closing this loop, data, decision, implementation, measurement allows returns analysis to function as a continuous management process rather than a one-off reporting exercise.

See how the Innoship Returns Module works.

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Sources:

1. https://www.dhl.com/global-en/microsites/ec/ecommerce-insights/insights/e-commerce-logistics/2025-returns-trends.html
2. https://link.springer.com/article/10.1007/s10660-024-09901-x
3. https://inpost.pl/aktualnosci-zwroty-w-e-commerce-jak-wplywaja-na-sprzedaz-trendy-dane
4. https://www.meteorspace.com/2025/01/14/latest-returns-statistics-that-may-surprise-you
5. https://www.cwill.com/blogs/ecommerce-return-rates/

Natalia Trzewik
Business Development Executive

She has over 15 years of experience in sales, key account management, and business relations, gained at leading companies such as Lyreco, Sodexo, and Fiserv. She is passionate about growth, collaboration, and driving digital transformation in logistics and e-commerce. An experienced sales leader with a strong background in B2B business development, e-commerce, and logistics innovation, she now works at Alsendo Innoship, where she supports retailers and brands in optimizing last-mile delivery processes across Europe — building partnerships that connect technology with efficiency.