How to Manage Post-Peak Returns Without Breaking Your Operations

As orders climb, so do returns – that’s a fact of eCommerce – but the rate of the increase isn’t proportional in Q4. 

Instead, gift-buying, impulse buying, bargain hunting, and competitive, high-volume shopping combine to raise returns to their highest levels of the year. 

While returns are unavoidable, that doesn’t mean they should be left unoptimised and accepted as a loss you cannot control. Streamlining the returns process is a huge opportunity – both for retaining more profits and providing an excellent customer experience.

Read on to learn everything about the manic Q4-Q1 return period and, most importantly, how to beat it. 

Q4 Returns: What To Expect

Returns spiked to $122 billion worth of purchases Christmas week 2024 – a 28% jump over the previous year. January return volumes regularly increase to some five times normal levels. 

This sees warehouses transform from processing a manageable trickle of returns to being overwhelmed by boxes that require inspection, decision-making, and processing.

However, no single headline figure can tell the whole story here, and you’ll find immense variation between different return rates for different product categories. 

For example, fashion retailers regularly see return rates exceeding 30% but sometimes up to 50% or even higher. Beauty products are also high at above 25%, while electronics and home goods might be slightly lower. 

Processing each return costs is widely touted to cost around $33 for every $50 item. That doesn’t only include shipping, but inspection, restocking decisions, customer service time, and the overhead of reverse logistics. 

For businesses handling thousands of returns per day, those costs compound rapidly, and they can be challenging to model into projected profits.

Extended Windows Are Creating New Problems

Returning products was once a last resort for many consumers, who knew they’d have to bear the costs and responsibility. Today, free, easy returns have become the norm. 75% of younger people now expect them as standard in the UK, rising to as many as 9/10 people in the US.

Return windows have also stretched dramatically. Where retailers once offered standard 28-day windows, many now accept returns on items purchased in October through to January 31st or longer. Some even offer extended returns all year round. 

Industry-Specific Challenge

Some industries, such as clothing and apparel, face the brunt of returns pressure.

“Bracketing” has become standard practice – customers intentionally order multiple sizes with plans to return unwanted items. 

Fashion items are also frequently returned to the warehouse in varying, often less-than-satisfactory condition, with signs of wear, missing accessories, or damage that makes them unsellable.

This is problematic in other sectors too. For example, complex electronics or toy items with many components are expensive to inspect. Any missing parts, no matter how insignificant, could render the item unable to be sold. 

So, with those slightly bitter yet important truths behind us, let’s move on to discuss some solutions.

Solution 1: Planning Returns Strategy Before You Need It

First, not every return can be treated the same. The trick is deciding upfront which battles are worth having and which aren’t.

Start by establishing clear tolerance levels based on product value and complexity. A cheap impulse purchase warrants different handling than a top-tier item. Many retailers accept quick, efficient processing for cheaper items without question, but want detailed inspection and photographic evidence for high-value returns.

Building Decision Trees

Map out returns decision trees early, before the pressure hits:

• Which returns go straight back to stock without inspection?
• What condition standards apply to different product categories?
• When do you offer exchanges versus refunds?
• How do you handle incomplete returns or missing accessories?
• What’s the threshold for partial refunds on damaged items?

Some retailers have started offering incentives for customers to keep certain items that incur high returns costs for the retailer. Amazon now offers an instant discount when customers try to return some items provided they keep it, as it’s cheaper than processing the return. 

Decide Upon Commitments and Analyse the Impacts

If you’re planning to offer extended returns, be sure to model the potential impacts before making any commitments. 

The relationship between orders and returns is not always proportional or linear. If you currently process 500 returns per month with a 30-day window, extending to 60 days won’t simply double that figure – it often triples or quadruples it as customers gain confidence to make riskier purchases. 

Factor in the additional warehouse space, staff time, and cash flow implications of holding refunds longer.

Communication Standards Matter

Determine what information you need to provide customers regarding return processing times, inspection procedures, and refund schedules. Being upfront is preferable to promising instant refunds that can’t be delivered. 

Brief customer service with different communication rules for different scenarios:

• Damaged items that might require photo evidence
• Incomplete returns missing accessories
• Items outside normal return windows
• High-value items requiring special handling

Customers appreciate honesty more than optimistic timelines that fall apart under pressure.

Should You Charge for Returns?

Should you even offer free returns? It’s not the way forward for everyone. According to some studies, 79% of UK fashion retailers in 2025 now charge for returns, with the practice spreading into other categories. 

The argument for charging is compelling from an operational standpoint, but the customer impact is significant. Research shows consistently that customers actively seek out free returns, though other data suggests 61% wouldn’t be deterred by reasonable returns fees. 

Some retailers are finding a middle ground through tiered systems:

• Free returns for loyalty programme members
• Free returns above certain order values
• Return-to-store options that avoid shipping costs
• Exchange-only policies for certain categories

The key consideration is how transparently and fairly any fees are implemented. The returns process itself should still be as low friction as possible. 

Solution 2: Infrastructure That Won’t Buckle

Returns processing requires infrastructure and people power. The returns workflow is not the same as sending orders out, yet many warehouses try to squeeze both processes into the same areas. 

Losing returns in your warehouse damages both the business and customer relationships, so has to be avoided at all costs. 

Most operations benefit from distinct zones for different stages of the returns process:

• Incoming inspection area – where returns get their initial assessment
• Items awaiting decisions – products that need manager approval or customer contact
• Ready for restocking – items that can go straight back to sellable inventory
• Refurbishment zone – products needing repackaging or minor repair
• Disposal staging – merchandise destined for liquidation or charity

Create quality checkpoints that balance thoroughness with processing speed. A methodical process works best:

• Check for damage (functional and cosmetic)
• Verify completeness (all accessories, manuals, packaging)
• Assess cleanliness and hygiene standards
• Determine re-saleability condition

This prevents items from getting stuck in limbo while ensuring they’re properly checked and verified for resale or another outcome. 

Of course, setting up and managing these workflows during peak return periods requires expertise and resources. Many retailers find that partnering with a 3PL like J&J Global Fulfilment is an asset. 

Our fully managed returns service handles the end-to-end returns process, with dedicated teams trained specifically for high-volume and quality standards that don’t slip when pressure mounts.

Solution 3: Technology That Backs Returns Strategy

Returns processing generates masses of data that needs robust tracking. Where’s each item in your workflow? What condition is it in? When will the customer get their refund? 

The right warehouse management system (WMS) can handle returns as well as it can orders. Items are scanned upon arrival, are tracked as they progress through inspection, and trigger customer updates automatically. 

Reporting For Optimisation

Proper returns processing software gives you data that helps you improve your current quarter’s returns handling while providing valuable insights for next year:

• Which products return most often and why
• Where bottlenecks develop in your workflow
• How satisfied customers are with processing times
• When your team is approaching capacity limits

J&J’s ControlPort™ software handles returns processing from arrival through final disposition. It tracks each item’s journey through your warehouse, automates customer communications at every stage, and provides real-time visibility that helps you identify bottlenecks.

Solution 4: Smart Communication and Retention Opportunities

Returns are a valuable opportunity to engage and retain customers. The key is managing expectations while protecting the business. 

First, communications should be as detailed and proactive as possible. Most delivery companies enable automatic updates when returns are received and passed to the warehouse. 

From there, retailers can notify on their side that they’ve received the item and are processing it, before a final confirmation is given. 

Be specific about processing timelines and stick to them. “We’ll process returns within 3-5 business days” sets clearer expectations than vague promises about “as soon as possible.” 

Learning from Returns Data

Use returns data to improve product offerings and descriptions. If certain items return consistently for sizing issues, improve size guides. If customers cite “not as described” frequently, review product photography and descriptions. Returns feedback is valuable market research.

Consider partial refunds for items returned in less-than-perfect condition rather than automatically rejecting the return altogether. A 20% reduction for evident wear often satisfies customers while recovering costs. 

You may also find that some products or order types enjoy low returns. For example, bundled or discounted items are typically returned less as customers perceive they’re getting more value. For bundled items, they might return just one item from the bundle instead of the whole thing. 

Enhance Your Q4 Returns with J&J Global Fulfilment 

Managing post-peak returns requires systems built for surge capacity – flexible and designed to keep stress under control. 

With years of peak-season experience, dedicated teams, and technology that maintains visibility throughout the process, our fully managed returns service handles the surge while you focus on growth.

• Returns processing that scales automatically with demand
• Quality standards that don’t slip under pressure
• Customer communication that prevents frustration and support tickets
• Integration with eCommerce and inventory systems to keep stock accurate

We understand the importance of Q4 to our customers, and the role returns play in determining whether it’s a huge win or something you’ll need to cope with. Let’s explore how J&J Global Fulfilment can handle your post-peak surge while you focus on growing your business.

FAQs About Post-Peak Returns Management

Q: Should competitors’ extended return windows be matched? 

A: Only if infrastructure can support it. Extended windows sound customer-friendly but create complexity and cash flow challenges. Be honest about what can be delivered rather than overpromising.

Q: How can return rates be reduced without frustrating customers? 

A: Focus on accurate product descriptions, detailed sizing information, and clear photography. Most returns stem from unmet expectations rather than product defects. Better information upfront prevents returns later.

Q: When should returns processing be outsourced? 

A: When internal capacity can’t handle volumes without compromising service quality or when returns processing distracts from core business activities. Professional 3PLs have systems designed specifically for peak return volumes.

Q: How do you handle returns fraud without alienating genuine customers? 

A: Implement tiered controls based on customer and transaction risk profiles. Flag suspicious patterns like unusually high return volumes or repeated policy abuse for manual review. Prioritise taking action on potential fraud based on item/order value and customer lifetime value (CLV). Customers with high CLV might warrant higher tolerances. 

Q: When is it acceptable to refuse a return? 

A: You can often refuse returns that don’t meet your clearly stated conditions – items returned outside the time window, products showing excessive wear beyond normal use, or incomplete returns missing original packaging or accessories. The key is creating transparent policies that are clearly indicated upfront and applied consistently

Q: What are the legal requirements for accepting returns?

A: Legal requirements vary dramatically between the UK and US. In the UK, the Consumer Rights Act 2015 and Consumer Contracts Regulations 2013 mandate that businesses must accept returns for faulty goods and provide 14-day cooling-off periods for online purchases. Customers can cancel online orders within 14 days of delivery and have another 14 days to return items for full refunds, regardless of whether anything is wrong. Retailers usually just specify a returns window of 28 days or more as this is simpler to communicate. 

The US has no comprehensive federal return laws. Under the Uniform Commercial Code, businesses must accept returns only when goods are genuinely defective or “unmerchantable” – meaning they don’t work as expected. Individual states impose additional requirements.

Q: When can businesses legally refuse returns?

A: In the UK, businesses can legitimately refuse returns for items damaged through customer misuse, personalised or custom-made products, perishable goods, and opened software or media. However, these restrictions never override rights for genuinely faulty goods. The US offers businesses much wider discretion to refuse returns, provided policies are clearly communicated.

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