3 Ways to Manage Holiday Returns More Efficiently

he holiday season is a critical time for retailers, not just for driving sales but for managing returns. As consumers increasingly buy online and across multiple channels, the volume, cost, and complexity of returns have grown. Retailers estimate that 15.8% of their annual sales will be returned this year, totaling $849.9 billion, according to the “2025 Retail Returns Landscape” report released by the National Retail Federation and Happy Returns. 

As eCommerce continues to grow, returns are no longer a back-office issue, they are a critical touchpoint that can make or break customer loyalty. The study found that about 71% of consumers say they are less likely to shop with a retailer again after a poor experience, up from 67% in 2024. To turn what used to be a pain point into growth opportunity, retailers are approaching returns with more efficient, data-driven, and customer-centric strategies. Nearly two-thirds of retailers say updating their returns process in the next six months is a priority.

Here’s a look at three ways companies can manage holiday returns more efficiently.

Physical retail locations are increasingly serving as return hubs. Retailers and logistics companies have been leveraging their physical locations to strengthen their returns capabilities and process online returns quickly and conveniently. Not only does this ease the burden on centralized distribution centers, but it also speeds up refunds, increases foot traffic, and boosts sales. Many customers who return items in-store end up making another purchase before leaving. 

FedEx recently launched a consolidated returns service, FedEx Easy Returns, that allows consumers to return products box-free and label-free at 3,000 FedEx Office and Kohl’s locations across the U.S., using a QR code to complete the drop-off process. FedEx then consolidates the various returns and delivers them back to retailers in one shipment. reducing packaging expenses and the amount of returns in transit they need to track. 

Retailers are increasingly adopting reverse logistics platforms that automate and optimize return processing. Digital tools allow businesses to streamline return initiation, automate refund processing, and optimize return routing. Reverse logistics solutions allow retailers to track items in real time, automatically route returns to the most cost-effective location, and manage all returns from comprehensive dashboards, enhancing transparency while lowering transportation costs. 

Logistics companies are also investing in automation to manage returns more efficiently and reduce physically-demanding tasks for employees. Replacing manual tasks with automation helped Happy Returns see 40% faster processing speeds at its three hubs during peak season last year compared to previous years. The acceleration allowed the company to ship returns to retailers faster for inventory restocking. The company is exploring new types of robotic automation to handle higher volumes more efficiently, including the potential use of robotic systems for unloading trucks to further streamline operations.

Generous and transparent return policies are a key differentiator in customer retention. Eighty-two percent of consumers cite free returns as a major consideration when making a purchase, up from 76% last year, according to the Retail Returns Landscape report. Consumers also value immediacy, with 76% saying they are more likely to choose a return option that provides an instant refund or exchange. Retailers that offer multiple return options (in-store, by mail, drop-off), communicate clear return timelines, and provide real-time return tracking are more likely to win repeat business even after the holidays. Multiple return options enable customers to choose the best option that suits their schedules, increasing convenience and enhancing the return experience.

Managing holiday returns more efficiently can influence profitability, loyalty, and brand perception. Companies that leverage technology, empower their stores, and offer flexible options will transform returns management from post-holiday chaos into a well-orchestrated, efficient, and profitable process.

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