Operations
Operations teams that have run returns the same way for years now face higher volumes, regulatory pressure, capacity constraints, and environmental accountability simultaneously. The teams that adapt fastest gain real advantage.
Vertaling volgt. We tonen de Engelse versie.
Operations leaders in fashion e-commerce have run returns the same way for years. The 2010s shape of the function (a warehouse zone for receiving, an inspection workflow, repackaging, put-back to inventory) settled in when return rates were lower, capacity was less constrained, and there was no regulatory line of sight on disposal or emissions. Most of those conditions have changed at once. Operations teams that have not yet adapted are running into capacity ceilings, escalating processing costs, and disclosure obligations that did not exist when their current process was designed.
This article maps what is actually changing for operations leaders, the practical decisions involved, and how to position the function for the next few years. It is written for COOs, operations directors, and logistics leads at fashion retailers who are aware that something needs to shift but want a clearer picture of the moving parts.
The central argument: returns operations is becoming a more sophisticated, more cross-functional, and more strategically important part of the business than it was. The teams that recognise this and reorganise around it gain real competitive advantage.
Post-holiday January is the largest return month of the year for almost every fashion retailer. Volumes during the peak weeks run eight to ten times normal (CEVA Logistics, 2024). Most warehouses were not designed for that load. The conventional response (bring in temporary labour, pay overtime, rent additional handling capacity, extend processing times) is expensive and often invisible because the cost is spread across the year as part of normal operating budget.
The practical adaptations:
Better demand forecasting. Historical return data is highly predictive of January volumes if it is actually used. Most retailers know roughly how many returns they will see in week three of January, but few use that forecast operationally. Aligning temporary labour, warehouse space allocation, and processing-window expectations to forecast-driven plans rather than reactive scaling reduces peak cost meaningfully.
Tiered processing. Not every return needs same-day inspection. Tiered approaches process high-priority items (high-velocity SKUs, high-value items, items the next buyer is already waiting for) first, while letting lower-priority items queue. This requires inventory and order-management integration but reduces the cost of peak-week capacity.
Alternative routing for some volume. Peer-to-peer routing, recommerce platforms, returnless returns for low-value items, all reduce the share of returns that reach the warehouse during peak. Even a 20% reduction in warehouse-routed return volume meaningfully reduces capacity strain. This is often the highest-leverage operational shift available.
The broader point is that seasonal elasticity is expensive and largely invisible. Operations teams that quantify it tend to find that investment in either better forecasting or alternative routing has clearer payback than they assumed.
Carrier and logistics-partner contracts at most fashion retailers are heavily optimised for outbound shipping. Returns are often a secondary consideration: handled by the same carrier at standard rates, with little negotiation and few specialised arrangements.
This is changing. Several developments matter:
Returnless return services. Carriers and intermediary platforms (Returnless and Bleckmann in the Netherlands, similar players elsewhere) offer label-free, drop-off-station-based returns where the customer brings the item to a partner location and the carrier prints the label. The cost structure is different from a traditional return, often lower per item, with a different friction profile for the customer.
Specialised return-rate negotiation. Outbound rates are usually well-negotiated at any retailer of scale. Return rates are often the standard tariff, sometimes 30% to 50% above the negotiated outbound rate. Separating return-rate negotiation as its own conversation often surfaces material savings.
Cross-border return optimisation. Cross-border returns are typically two to three times the cost of domestic ones. Carrier networks are evolving to offer optimised cross-border return services, including consolidated reverse flows and country-specific drop-off networks. Retailers shipping into multiple EU markets are increasingly evaluating these options.
Return-portal integration. Specialised return portals (Returnless, ReBound, Returnly, in-house portals) increasingly offer differential routing options at the return-initiation step. The retailer chooses, on a per-item or per-customer basis, whether the return goes to the conventional warehouse, to a returnless drop-off, to a recommerce partner, or to a peer-to-peer routing service.
The operational implication: the partnership stack for returns is becoming more diverse and more configurable. Operations leaders who treat returns as a homogeneous flow handled by a single carrier are leaving operational and cost flexibility on the table.
Fashion warehouses typically dedicate 15% to 25% of floor space to return processing. The space requirements are different from outbound: returns require inspection workstations, condition-coding workflows, photography (where required), repackaging, and put-back to inventory. Designing this zone for efficiency, rather than letting it accumulate organically, has real impact on throughput and cost.
The high-leverage decisions:
Dedicated zones versus flexible space. Dedicated return zones are more efficient per item processed but consume floor space year-round. Flexible space (zones that flex between outbound and return processing depending on volume) is more space-efficient but less throughput-efficient. The right answer depends on volume profile and seasonality.
Inspection workstation design. Inspection is the bottleneck step at most warehouses. Workstation design (lighting, photography setup, scanning workflow, condition-coding interface) determines how many items per hour a worker can process. Investing in the workstation tooling itself often pays back faster than other capacity investments.
Put-back routing. Once an item passes inspection, it has to return to inventory. The route from inspection to put-back location is often inefficient because warehouses were designed around outbound flow, not the reverse. Optimising put-back routes (or in some cases, adding a separate returns-to-inventory zone close to the inspection station) reduces processing time per item.
Condition-based segregation. Items in different conditions need different downstream handling: full-resale, discount-resale, recommerce, write-off, disposal. Designing the inspection workflow to segregate by condition rather than treating all items the same downstream improves both processing efficiency and recovery value per item.
Automation in return processing is improving but uneven. The state of the art:
Computer vision for condition assessment is a real area of progress, but accuracy on fashion items is still below the threshold for unsupervised use at most retailers. Hybrid models (computer vision flags items needing human inspection, humans handle ambiguous cases) are deployed at some larger operations.
Automated triage (which items go to which downstream handling) is more mature and widely deployed. Rules-based triage (return reason, item value, time of year) is straightforward to implement; ML-based triage (predicting probability of resale, recommended discount, optimal channel) is in production at some larger retailers.
Photography automation reduces processing time per item significantly. Lightboxes with automated capture, condition-tagged automatic uploads, and integration with PIM and CMS reduce a step that used to be heavily manual.
Refund-issuance automation triggered on receipt of the return label scan (rather than warehouse arrival) is increasingly common. The fraud risk is real but smaller than feared, and the customer-experience benefit is significant.
The right level of automation investment depends on volume threshold and labour cost in the local market. Retailers below 1,000 returns per week per facility usually do not benefit from heavy automation. Retailers above that threshold tend to find dedicated investment justifies itself.
Not every return needs to come back to the warehouse. The conventional flow assumes the warehouse is the right destination for every return; in practice, it often is not.
Peer-to-peer routing. For high-volume fashion retailers, routing returns directly from one customer to the next (skipping the warehouse entirely) reduces processing cost, transport emissions, and depreciation in the return pipeline. The model has specific conditions for fit (volume threshold, item type, customer demographic) that we cover in detail in our explainer on peer-to-peer returns. It Goes Forward is one of several providers in this space.
Recommerce platforms. For items past their full-price window or in slightly diminished condition, recommerce platforms (Trove, Reflaunt, others) handle the resale process and pay a share back to the retailer. This is a different operational model than peer-to-peer routing and is appropriate for different parts of the return mix.
Returnless returns. For low-value items where the cost of processing exceeds the recovery value, refunding without requiring the item to be returned is a cost-positive decision. Most retailers run a value threshold (often around €15 to €25) below which returnless is the default.
Branded resale. Some retailers operate their own resale storefronts for items past full-price window. This is a longer-term commitment but provides margin recovery and a sustainability story.
The right approach is per-item, not per-retailer. Most operations leaders running this well operate a routing decision tree that dispatches incoming returns to the right destination based on item value, condition, time of year, and demand match. The technology to support this is improving and increasingly standardised across providers. The system-integration concerns that come with alternative routing (in particular, how peer-to-peer flows are reflected in the ERP) are well-understood and solvable. Our reference on ERP integration patterns for peer-to-peer return forwarding covers the practical options for Microsoft Dynamics 365, SAP, NetSuite, Acumatica, and others.
The roughly 18% of returned fashion items written off entirely (Ben-Gurion University research) represent both a financial cost and an emerging regulatory exposure. The Ecodesign for Sustainable Products Regulation (ESPR) introduces a phased ban on the destruction of unsold and returned textiles by larger companies, narrowing the disposal options.
The practical implications:
Donation and recycling pathways. Donation (to charity partners) and recycling (to fibre recovery, downcycling, or specialised recyclers) are alternatives to incineration or landfill. Both are typically net-cost rather than net-revenue, but the cost differential narrows under ESPR scrutiny.
Internal repair and refurbishment. For items with minor damage, repair before resale recovers margin that would otherwise be written off. Some retailers operate dedicated repair workflows; others partner with external specialists.
Documentation requirements. ESPR enforcement requires documentation of disposal pathways. Operations teams need to track and report not just whether an item was written off, but where it went and what happened to it. This is a new operational requirement for most retailers.
The broader regulatory context (CSRD, PPWR, ECD, ESPR, EPR) is covered in our comprehensive guide to EU sustainability regulations for fashion retailers. The operational implication is that what was once free disposal is becoming both expensive and tracked.
The returns function in fashion retail is evolving from a logistics-only operation to a cross-functional discipline that combines logistics, sustainability, customer experience, and analytics. The team-skill mix is changing accordingly.
The roles increasingly common at larger retailers:
Returns analytics manager. Owns return-data instrumentation, reason-coding, cost analysis, and reporting. Sits between operations and finance, increasingly with a dotted line to sustainability.
Sustainability operations lead. Owns return-related sustainability metrics, CSRD reporting inputs, ESPR-relevant documentation, and the design choices that affect emissions and waste outcomes.
Customer-experience operations lead. Owns return policy design, communication during the return process, and the post-purchase customer experience. Sits between operations and marketing.
Triage and routing specialist. Owns the operational decision tree for where returns are routed (warehouse, peer-to-peer, recommerce, returnless), with both technical understanding of the routing systems and commercial judgment on per-item decisions.
For smaller operations, these are often combined or distributed across existing roles. The principle is that returns operations is a cross-functional discipline, not a logistics sub-task. Operations leaders organising the function around that recognition tend to deliver better outcomes than ones running it as a back-office overhead.
The recruitment and training implications follow. The skills needed for a returns operations role today (analytics, sustainability literacy, customer-experience awareness) are different from the skills the function recruited for ten years ago (warehouse logistics, throughput management). Most operations leaders find they need to retrain existing teams as much as recruit new skills.
Operations leaders who recognise this shift and organise the function around it will outperform peers running the conventional model. The returns function is no longer a back-office logistics task; it is a strategic discipline with material business impact, and the next several years are when that recognition becomes table stakes.
Fashion retailers face return rates of 30 to 40% in Europe. Here are the most effective ways to bring those rates down: better sizing data, accurate photography, honest descriptions, smarter review surfacing, and operational changes to the return process itself.
Laatst bijgewerkt:
Most retailers undercount what a return actually costs. Once depreciation, opportunity cost, write-off, and customer-service overhead are properly attributed, returns are typically 2 to 3 times more expensive than spreadsheet defaults suggest.
Laatst bijgewerkt:
The make-or-break technical question in any peer-to-peer routing evaluation: how does it actually integrate with the ERP? Three patterns work in practice across the major systems, none requiring custom development. A reference for IT directors and controllers.
Laatst bijgewerkt:
