It’s no secret that product returns are one of the biggest challenges facing the world’s retailers — especially retailers of fashion apparel. Clothing trends and product seasons come and go with increasing speed today. That means fashion retailers must get returned products back in stores, or back into online inventories, as quickly as possible to capture the fleeting resale opportunity. As the hours and days tick by, retailers’ potential profit margins on returned merchandise steadily decline.

It’s a huge problem, and growing. The National Retail Federation (NRF) estimates that returned merchandise accounted for a staggering $890 billion last year, or 16.9% of retailers’ total 2024 sales. This is up from 14.5% in 2023.

Much of this growth in returns is driven by online shoppers. While just 10% of in-store purchases are returned, the return rate rises to 26.4% for online sales. According to Statista, the most returned online purchases in the U.S. are clothing (24%), shoes (16%) and accessories (12%) — the exact product footprint of fashion retailers.

A new social media trend is influencing retail margins

Why are consumers returning so many fashion products? Over half (58%) of consumers report that they routinely purchase clothing in multiple sizes, then return the items that don’t fit. When it comes to clothing, 75% of items are returned for fit issues.

But today there’s an alarming new trend that’s also fueling higher return rates. Increasingly, social media influencers are buying fashion apparel from trendy retailers in bulk — they call their large purchases a haul. Then influencers not only use their homes as fitting rooms, but they share their outfits on TikTok and other platforms as they try them on, asking their followers a simple question: Keep or return? Based on feedback, influencers decide which items to keep, and which ones to return.

According to Retail Economics, serial returners represent only 11% of shoppers — but are responsible for 25% of returns, sending back an average of nearly $1,500 of merchandise each year. The UK-based economics research consultancyestimates that the keep-or-return game and other serial returner behaviors are costing retailers about $7 billion annually in the UK alone.

How can retailers exert their own influence?

In 1968, artist Andy Warhol predicted that, in the future, everyone would be famous for 15 minutes. But probably not even Warhol would have predicted the rise of fashion influencers and the keep-or-return game. This trend has created an unexpected challenge for fashion retailers, and there’s no telling how long its popularity will last.

Fortunately, retailers can work proactively to combat the negative effects of serial returners. Fashion retailers like Zara, H&M and ASOS are now charging returns fees to customers to discourage hauls and offset the costs of reverse logistics. Many clothing retailers are shortening return windows to turn products around faster, or marking more products final sale. Other fashion retailers are improving their size charts, offering proactive sizing recommendations, and even using virtual-reality technologies from Google and other vendors to create an online fitting room.

Returns will always remain a fact of life, however. A Blue Yonder survey found that, while 89% of retailers have changed their policies to deter returns, more than half of those companies (59%) experienced an increase, not a decrease, in the rate of returns following those policy changes.

The answer is clear: Fashion retailers need to exert their own influence by driving more efficient internal reverse logistics processes to get trendy merchandise back into inventory as rapidly as possible. This means orchestrating returns with greater intelligence — quickly deciding what to do with a returned item to maximize margins, then executing that decision as rapidly as possible.

When the item is received at a warehouse or store, for example, an automated digital process is needed to help quickly assess the return and get it on its way to the next destination.

But the journey to increased efficiency can start even earlier, with the shopper’s initiation of the return. Requiring customers to contact customer support for a return authorization or a shipping label — as almost a third of retailers do — slows the process down, results in manual work and creates additional costs. Instead, retailers can digitize the return creation process, eliminate labels altogether and offer convenient drop-off points — kickstarting the reverse logistics process immediately.

A digitized process is key to maximizing transparency and making sure the right resources are in place to support end-to-end returns management, including store associates and warehouse employees, as well as carrier capacity. Digital solutions can optimize routes, increase visibility into when items will arrive back at the warehouse, automate processing when items are received, and otherwise streamline and accelerate the reverse logistics process. By automating key activities and managing tasks in real time, fashion retailers can address the two things within their control: Reverse logistics costs and timeliness.

Stop shopping for a returns management solution. Choose and keep Blue Yonder.

Given the growth of product returns, it’s surprising that less than half of retailers (47%) are using a digital solution to optimize returns — and about a quarter (24%) are using a specialized solution they developed in-house. Many of those solutions are simply digitizing the customer experience, not exploring the opportunities for internal process improvements that can be enabled by digitization.  

Blue Yonder’s proven returns management capabilities are easy to launch, easy to apply and easy to maintain. From returns initiation and drop-off kiosks to returns orchestration and processing, Blue Yonder software makes the end-to-end process more seamless, more efficient and more profitable for fashion retailers. Time spent out-of-stock is minimized, as products are quickly returned to inventory.

Blue Yonder’s returns management solutions automate workflows and capture real-time data at key touchpoints, enabling faster, higher-quality decisions. Retailers can understand the root causes of returns and consumers’ decision-making process at a deeper level. That means they can

make smarter returns decisions and implement more successful returns policies.

Social media influencers and their followers might be playing the keep-or-return game, but Blue Yonder customers universally make a “keep” decision when they’ve seen the power of our returns management capabilities. Contact us to try our solutions on for size today.