Returns peak is the new reality retailers face every January and February, creating bigger operational challenges than holiday shopping season itself. After years of offering free returns to compete during the COVID boom, retailers are discovering these policies are unsustainable as sales normalize but return costs remain high.
Ellie Ronning breaks down why 72% of retailers are rethinking their return strategies and moving toward personalized approaches. She explains how smart retailers are using customer segmentation to offer different return experiences - from "keep the item" policies for low-value products to prepaid return fees bundled with shipping insurance.
The shift represents a fundamental change from the 2020-2022 era when massive sales growth masked return processing costs including labor, shipping, packaging, and fraud prevention. Now retailers must balance customer satisfaction with profitability using data-driven decisions about which returns to approve, which customers to charge fees, and how to reduce controllable return factors.
Key strategies include AI-powered fraud detection, selective appeasement based on customer history, and upstream photo verification to catch fraudulent claims before processing. The most successful retailers are analyzing daily sales data right now to refine their return policies for 2025, rather than waiting for post-holiday reports.
Key topics covered:
[00:00] Intro
[00:46] Returns peak follows holiday peak
[02:20] COVID trained consumers to expect free returns
[04:02] Hidden costs of processing returns
[05:17] Tariffs drive retailers to recoup costs
[06:18] Keep the item strategy saves money
[07:13] Prepaid return fees through insurance
[08:12] Personalized returns without customer backlash
[11:18] Merchandising insights reduce return rates
[12:21] Controllable versus uncontrollable return factors
[14:05] Selective appease prevents claim abuse
[16:19] AI deflects manual review workload
[17:35] Photo proof technology catches fraud
[19:34] Daily data synthesis informs return strategy
[20:30] Refining policies for 2026 peak
Learn more about intelligent returns solutions at signifyd.com
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