How Smarter Returns Management Can Lead to Retail Growth

March 10, 2026 • 7 minute read
Author: Phyllis Jackson, Senior Manager, US Marketing, UPS

Key Points

• More than 90% of customers who have a smooth returns process will make another purchase from the same retailer.²
• A convenient returns portal, extended return periods and positive in-store interactions can help retailers increase customer satisfaction and loyalty.
• If the returns policy doesn’t seem convenient, 46% of customers will abandon a purchase.⁴

How a Returns Management Solution Can Boost Customer Satisfaction

Peak season is often associated with winter holiday shopping, but retailers now see those demand spikes pop up throughout the entire calendar year: summer fun, high school graduation celebrations, or compelling sales and promotions.

In the “UPS B2C Retail Consumer Survey,” which looked at shopping behaviors for in-store and online retail customers across the U.S., UPS found that 49% of respondents reported they prioritized shopping on Amazon Prime Day, 35.6% waited for end-of-year clearance events and 11.9% zoned in on back-to-school sales.¹

In other words, peak season now has many summits.

Year-round shopping means small- and medium-size businesses (SMBs) need a year-round strategy for returns — one that makes the backflow of goods frictionless, easy and convenient for customers.

Using returns as a lever for customer satisfaction requires a shift in mindset and strategy. Jarret Arnold, Retail Strategic Lead, UPS, offers his insight into how SMB retailers can change the way they approach returns management to benefit shoppers and the bottom line.

How does returns management impact retail customer retention, and what solutions do you recommend?

“The connection is enormous because 92% of customers who have a smooth returns process will make another purchase from the same retailer.² In fact, many shoppers consider a retailer’s return policy even before they actually start shopping.

Once the purchase is made, if a customer has a poor returns experience, they often decide not to shop with that brand again. The opposite is true, too — with a frictionless returns experience, you can turn that one-time customer into a lifetime customer.

Businesses of all sizes can make the returns process easy and convenient. UPS Return^® service can help with everything from sending or emailing pre-printed return labels to front door package pickup.

For larger retailers, one solution we recommend is Happy Returns^® service. This is a nationwide network of 8,000 Return Bar^® drop-off locations, including thousands of The UPS Store^® retail locations, which makes it easy for customers to utilize box-free and label-free returns. Each time a customer comes in, the team scans and verifies the item, and then seals it in a labeled bag for efficient travel back to the retailer. The process is easy, convenient and fast.

Customers are shopping year-round, so solutions like Happy Returns^® service gives retailers ample opportunity to provide the right service to keep them coming back.”

Are returns a negative for retailers?

“It really depends on the retailer and the product being returned. If it’s a low-margin product, it can be difficult and frustrating for retailers to deal with it. This is why some retailers refund customers and allow them to keep the product.

Last year, consumers returned about $890 billion in retail purchases, which represented about 16.9% of annual sales.³ Retailers need to think about ways to flip the script and use the returns experience as an opportunity to create loyal customers. They can turn the loss into a gain.

A positive return experience is crucial for customer retention, and a positive and easy return experience can lead to higher customer satisfaction and a greater likelihood of repeat business.”

How can retailers curb the frequency of returns and also make the process simpler when customers decide to send items back?

“Take a customer-first approach that focuses on their needs. Use the data that you have about past purchases, cart abandonments, and past returns to understand their tendencies and get a better read on why they buy what they buy. With this information, you can offer a customer a more tailored experience and, hopefully, reduce the chances of a return.

To make the process better for customers, retailers have to listen to what they want, and that means lengthening the return window. For a time, 15 days was the standard for a return period, but we’ve seen that figure grow to 30 days and, in some cases, 45 to 60 days.

Also, retailers should have a frictionless returns portal that lets customers jump online and start a return with limited information, such as an email address and order number. Most consumers prefer a completely online experience over having to call customer service or send an email.”

Should retailers consider what their competitors are doing and implement parallel policies?

“Analyzing the competition can be an eye-opener. It can push retailers to improve their returns processes and catch up to or pass their competitors.

For example, UPS recently conducted a competitor analysis for a retailer, and we found that other brands in their space offered longer return windows. We took that information and compared customer reviews to highlight opportunities that could help the retailer leverage returns for growth.

Without understanding what competitors were doing, the retailer may not have made the right strategic changes.”

How can retailers use their physical stores as a way to turn returns into a positive experience for customers?

"Offering a buy-online-return-in-store (BORIS) option is critical for any retailer that wants to flip the script on returns management. This option isn’t just about convenience — it gives retailers another touchpoint with their customers, which can improve customer satisfaction and loyalty.

In-store returns put customers face to face with a store associate who can encourage them to browse and find an item for an exchange. Now the return has become a sale. That physical store interaction is really powerful.”

Will returns management continue to be a competitive differentiator?

“A smooth and memorable returns process is the catalyst that can transform a frustrated customer into a lifelong one. Retailers that recognize this are already moving in the right direction.

We know that free returns, instant refunds and boxless returns are important to customers. And if the stated return policy doesn’t seem convenient, 46% of customers will abandon a purchase.⁴ These compelling facts show us just how important a strong and streamlined returns policy really is for customer satisfaction and growth.”

¹ “UPS B2C Retail Consumer Survey.” The survey was distributed by a panel in an online format to 1,579 respondents in the U.S., The survey ran November 6-10, 2025.
² “E-commerce Product Return Rate — Statistics and Trends,” Invesp, accessed November 17, 2025.
³ “Reversing into the future: The outlook for circular retail,” National Retail Federation, February 12, 2025
⁴ “2024 Consumer Returns in the Retail Industry,” Happy Returns, accessed October 9, 2025.

Individual results and options will vary. UPS makes no promises of any specific outcome in this document but instead provides only example outcomes based on certain UPS customer experiences.