How to Navigate Returns without Breaking the Bank in 2026

Key Takeaways

• Retailers surveyed by the National Retail Federation and Happy Returns expect 15.8% of 2025 sales, or $849.9 billion, to be returned.
• Ecommerce returns run higher than the overall rate, with an estimated 19.3% of online sales coming back in 2025.
• Retailers expect 17% of holiday sales to be returned, so holiday returns need to be planned alongside holiday sales.
• NRF reports that 9% of all returns are fraudulent, so matching each return to its original order before a refund matters.
• AI-based forecasting and real-time inventory monitoring reduce out-of-stocks and overstocks, which IHL Group counts as missed sales and deep discounting.

Still struggling with holiday returns?

They take time and they cost money. Learn how technology can help your business improve forecasting, reporting, operations, and save you money.

Return season is tough on any business, especially around the holidays when return policies get muddled. You may be dealing with complicated processes or too little data, sustainability or green-promise challenges, or fraud. Some teams face all of these at once. With the right technology, you can reduce the impact of returns and, in some cases, prevent them altogether.

Ecommerce returns are a fixed cost of selling online. Retailers surveyed by the National Retail Federation and Happy Returns estimate that 15.8% of annual sales, or $849.9 billion, will be returned in 2025, and the rate climbs to 19.3% for online sales. NRF also finds that retailers expect 17% of holiday sales to come back, so holiday returns need to be planned alongside holiday sales.

Better returns technology protects your bottom line and your customer experience. If you are still planning for Q4, start with our peak season readiness checklist and build returns capacity into it. As a supply chain technology partner, we work with brands and 3PLs on the operations behind every return. Here is how supply chain technology with artificial intelligence (AI) helps you cope with return season:

AI-Based Inventory Forecasting

Trends, seasonality, and rapid growth keep moving your demand and lead times. Historical data helps you get ahead, but combing through endless data takes time. AI cuts the manual labor of predictive analytics and can even give your executives recommendations and decision support.

Use AI for inventory forecasting to predict demand accurately and keep optimal inventory levels. AI algorithms analyze historical data and market trends to forecast demand with precision. That reduces out-of-stocks and overstocks, which IHL Group counts as missed sales and deep discounting.

Trend Analysis with AI

AI spots turning points before they hit your inventory. AI-powered trend analysis helps you stay ahead of consumer preferences and anticipate future demand. By monitoring social media and other sources, it identifies emerging trends, so you can adjust your inventory and minimize returns from outdated or unpopular products.

Demand varies significantly on a monthly and daily basis, often influenced by social media platforms like TikTok, which can rapidly propel products to viral status. Reuters Breakingviews reported in August 2025 that viral TikTok demand can cause shortages and disrupt forecasting built on slower cycles. IHL Group's inventory distortion research puts the global cost of out-of-stocks and overstocks at $1.7 trillion a year, or 6.2% of retail sales.

Real-Time Inventory Monitoring

Monitoring inventory is a continuous process. Automate it with technology to reduce the errors that frustrate your customers.

Order management technology gives you real-time visibility into inventory levels across multiple locations, ensuring businesses are always informed about current stock levels. This transparency enables proactive decision-making, such as reallocating inventory to meet demand spikes in specific regions, reducing the likelihood of stockouts and associated returns.

Efficiency in Supply Chain Operations

Missing data on transportation costs and delivery decisions leads to inventory overload and poor visibility.

Connecting supply chain processes on a Unified Commerce platform improves efficiency and reduces errors that can lead to returns. From procurement to last mile, automation of tasks like order processing and fulfillment minimizes delays and inaccuracies, ensuring customers receive their orders promptly and accurately, thus decreasing return rates.

Maintaining High Quality and Reputation

Your reputation depends on making good on customer promises. Technology gives you the insights you need to ensure consistent quality.

Unified Commerce lets you monitor product quality throughout your supply chain with end-to-end visibility. Quality control measures and tracking systems make sure only high-quality products reach customers, which cuts returns from defects or damage during fulfillment.

Enhancing the Customer Experience

As mentioned, Unified Commerce is a great way to boost a reputation. When used as a supply chain platform, it helps to create a consistent shopping experience from end to end.

Clear communication and user-friendly interfaces improve the overall customer experience, reducing confusion and frustration that may lead to returns. Providing accurate product measurements and detailed descriptions, backed by an easy return process, gives customers confidence and builds loyalty, which reduces return rates.

Fewer returns start with getting the first delivery right. For the steps that cut return volume before it starts, see our guide on best practices for reducing returns.

Effective Order Management Systems

Without an integrated order management system, errors and delays are just the beginning. Customer complaints and, yes, high return rates follow.

Investing in a well-integrated order management system ensures smooth order processing and fulfillment, reducing errors and delays. Centralizing order data and automating order routing minimizes the risk of miscommunication and ensures orders are fulfilled accurately and efficiently.

Integrating data from shopping carts and marketplaces keeps order data synced in real time across the supply chain, so stockouts and inaccurate order information become a thing of the past.

Cost-Effective Supply Chain

Supply chain disruptions eat directly into your profit. That is why efficient supply chain management and risk mitigation matter (how to prevent revenue leaks).

Cost-effective strategies, such as optimizing transportation routes and reducing excess inventory, minimize the financial impact of returns. Cut the unnecessary expenses tied to returns, and you improve your bottom line and use resources more efficiently.

These strategies are all made possible by the Osa Commerce Collaborative Visibility Platform, a one stop shop towards creating a unified and efficient supply chain. The Collaborative Visibility Platform brings order management and fulfillment together on one integrated platform, giving you more visibility and resilience across the supply chain.

Plan for Return Fraud

Fraud is part of every return season. According to NRF's 2025 Retail Returns Landscape, 9% of all returns are fraudulent.

Your defense starts with data you already collect. Real-time order and inventory data lets your team match each return to its original order before issuing a refund. When the returned item matches the order record, the refund moves ahead. When it doesn't, your team can hold the refund and review the return before money leaves the business.

Reduce Returns with AI

Technology helps you cope with return season. It cuts return rates and improves customer satisfaction. With AI-driven forecasting and real-time inventory monitoring running on connected supply chain operations, you limit the cost of ecommerce returns and stay competitive.

Don't wait to improve your supply chain technology. Skip a stressful next return season and book a demo today.

Reach out to learn how Osa Commerce can help