Apparel returns management

Apparel returns management is a critical operational challenge that directly impacts profitability and customer loyalty. With apparel return rates averaging 20-40% across the industry, brands face mounting pressure to transform returns from a costly burden into a strategic advantage. These percentages take a significant toll, even on businesses with an otherwise healthy financial bottom line, as the table below demonstrates:

Based on industry averages: $20 processing cost per return, 50% resale value recovery

With that in mind, the following article discusses how to optimize your apparel returns management before, during and after the returns process to reduce costs and elevate your brand.

Before: Reducing returns at the source

The most cost-effective approach to apparel returns management begins with prevention. Brands that invest in accurate product information and data analytics can reduce return rates by 15-25% according to recent industry studies.

Depending on the nature of your fulfillment operation, this might look one of a few ways: 

• Size guidance accuracy represents the largest opportunity for return reduction. Implementing size recommendation engines that factor in brand-specific fit data, customer purchase history and return patterns can dramatically improve first-time fit success. Leading apparel brands report 18-23% return rate reductions after deploying AI-powered sizing tools.
• Product data optimization involves ensuring every SKU includes comprehensive details about fit, fabric, care instructions and styling recommendations. Returns data analysis reveals that products with incomplete descriptions generate 31% more returns than fully detailed listings.
• High-return SKU identification through analytics allows proactive intervention. By analyzing return reason codes, brands can identify products with systematic fit issues, quality problems or misleading descriptions. This data drives decisions about product modifications, supplier changes or listing updates.

The following table outlines the most important KPIs to watch when evaluating your prevention-stage practices, including average benchmarks as well as when it is time to act.

During: Streamlining reverse logistics

In fashion, value erodes rapidly due to wear and changing demand, making returns especially critical to your bottom line and underscoring the importance of speedy processing and strategic refurbishment or resale channels. 

A fluid reverse logistics operation depends on three unique areas.

The method for improving each stage will differ slightly depending on your:

• Intake processing: Dedicated returns staff and pre-sorting efforts will go a long way towards improving the time between arrival and logging. Similarly, automated check in and standardized packaging & labeling help ensure that staff have an easier time processing new arrivals.

• Inspection accuracy: Standardizing your grading criteria helps staff accurately identify A/B/C level returns and sort them appropriately. In addition, having checklists for each SKU category reduces instances of steps being skipped and subjective judgment.

• Value recovery: Make sure to have preparations in place for rapid processing, including parts harvesting for unusable units marked for liquidation and embracing online clearance resale channels to optimize the amount of goods you can recover.

Often, having the right tech solutions (e.g., order management software (OMS), warehouse management software (WMS) ends up being the key to bringing all of these processes under a single centralized roof. Regardless of your fulfillment model (discussed further below), these tools will be essential to managing your apparel returns fulfillment.

After: Returns as a loyalty tool

Once a return has been completed, the most important thing you can do is ensure that customers have a reason to come back. The most common tools for this purpose are loyalty tools (e.g., discounts, refunds, store credit). This approach to returns recognizes returns as a customer retention opportunity rather than operational burdens; several studies indicate that a seamless returns experience can increase customer lifetime value by 15-30%.

For reference, here are a few benchmarks to measure 

So what can you do to improve your post-returns process? The most effective options include:

• Branded return portals create controlled experiences that reinforce brand values. Custom return pages with branded messaging, easy-to-use interfaces and clear communication build trust during a potentially frustrating moment.
• Prioritizing exchanges over refunds keeps revenue within the business. Offering store credit bonuses (typically 10-15% additional value) or free exchanges encourages customers to find alternative products rather than requesting refunds.
• Transparent communication throughout the process reduces customer service inquiries and builds confidence. Automated status updates, estimated processing timelines and clear policies set appropriate expectations.

How Cart.com simplifies apparel returns management

If you’re looking to improve your company’s returns operations, you have several viable paths to consider. The right choice depends on your order volume, product category and the internal capabilities you already have in place. Broadly, there are three main approaches:

Choosing between in-house, outsourced or hybrid returns management is less about a “best” option and more about aligning your operational goals, cost structure and desired control level. A low-volume, high-margin brand may prioritize in-house quality control, while a large-volume retailer may benefit from 3PL scale and speed.

Frequently asked questions

How quickly should apparel returns be processed to maximize value recovery? 

Industry best practice targets 24-48 hour intake processing. Each additional day of delay reduces resale value by approximately 1-2% for fashion items due to seasonality and trend cycles.

What return rate should apparel brands target? 

While industry averages range from 20-40%, leading brands achieve 15-25% return rates through improved size guidance, accurate product data and quality control measures.

Should brands offer free returns for apparel? 

Free returns typically increase conversion rates by 8-12% and customer satisfaction by 20-25%. The increased sales volume and customer lifetime value generally offset the additional processing costs.

How can brands reduce size-related returns? 

Implement size recommendation engines, provide detailed fit information, use consistent sizing across product lines and analyze return data to identify systematic fit issues requiring correction.

What's the best way to handle damaged returns? 

Establish clear condition assessment protocols, invest in refurbishment capabilities for minor damage and develop efficient liquidation channels for items beyond repair.

Returns don't have to be a loss

Apparel returns management, when executed strategically, transforms from an operational burden into a competitive differentiator. The most successful brands view returns as valuable feedback that drives product improvements, process optimization and customer experience enhancement.

At Cart.com, our dedicated account representatives will walk you through the process every step of the way to ensure that you are getting the most out of your apparel returns management. If you are ready to optimize your returns, reach out below for an initial discussion.

Speak with a Cart.com representative to discover how our integrated fulfillment platform can transform your apparel returns management into a competitive advantage.