If you’ve been in eCommerce for more than five minutes, you already know that returns are inevitable. But what’s not inevitable is how much they eat into your margins.
Returns don’t just hurt on the surface — they quietly rack up costs across warehousing, admin time, customer service, repackaging, and even lost inventory value. For sellers without a solid system, those little dents become massive profit holes.
In this blog, I’ll walk through exactly how returns cost you more than you think, why most sellers struggle to fix the problem, and what you can actually do about it — even if you don’t have a huge team or dedicated returns department.
What Are Returns?
At their core, returns are any products that customers send back after purchase. While that sounds simple, it covers a wide range of situations — from completely unopened items to damaged goods, incorrect orders, or products that simply didn’t meet expectations.
In eCommerce, returns are more common than in-store shopping. Customers can’t physically touch, test, or try items before buying, so return rates are naturally higher. Clothing and electronics tend to have the highest return rates, but no category is immune.
For sellers, this creates a reverse logistics challenge — not only do you have to ship out efficiently, but you also need a plan for handling what comes back. Without that plan, returns quickly become a logistical and financial headache.
Why Returns Matter More Than You Think
On paper, a return looks like a simple reversal: someone buys your product, decides they don’t want it, and sends it back. But in practice, every return sets off a chain reaction of costs and complications.
Labour costs – Every returned item has to be checked, processed, sorted, and logged. That takes time — and time costs money.
Lost inventory value – You can’t always resell returns at full price, especially if packaging is damaged.
Repackaging and restocking – Cleaned and repacked stock has to be stored again, often outside your usual system.
Customer service drain – Handling return queries, issuing refunds, and tracking parcels eats into your team’s time.
Shipping and logistics – You’re often covering return shipping, or absorbing that cost somewhere in your margins.
And let’s not forget the impact on your metrics — high return rates can hurt your seller rating, reduce buy box eligibility, or increase your FBA costs.
If you’re not actively managing the returns process, it’s quietly draining your business.
Common Reasons Sellers Struggle With Returns
One of the biggest issues is that returns sit in the no-man’s land between departments: warehouse, customer service, accounting, and operations. No one fully owns the process, so it gets messy fast.
Here’s why most sellers fall behind:
Lack of returns infrastructure – No tracking systems, no defined workflow, no returns policy that actually matches operational capacity.
Manual processing – Returns handled manually increase the chance of mistakes and delays.
Limited space or staff – Smaller teams can’t afford to allocate resources just for returns, especially in peak seasons.
No inspection or grading – Items come back and get lumped into one pile, whether they’re damaged, open-box, or resale-ready.
Sound familiar? That’s where third-party returns support can make a huge difference.
The Hidden Cost of Doing It All In-House
When you’re small, it’s tempting to keep everything in-house to save costs. But with returns, it’s usually the opposite — doing it yourself often costs more.
Returns aren’t just about logging an item and moving on. You’re dealing with physical inspection, documentation, refund validation, potential relisting, and sometimes customer outreach. That adds up.
Even if you manage to handle returns “okay,” it’s taking time away from revenue-driving activities — like marketing, product development, or sourcing.
And if your returns system frustrates your customers? Expect more complaints, more refund requests, and fewer repeat buyers.
So while it might feel like outsourcing is a luxury, it’s often the smarter call.
How PackPro Helps Fix the Returns Problem
This is where PackPro comes in. We’re not just a fulfilment centre — we handle the returns side too, and we do it properly.
For eCommerce brands that don’t have a huge team or dedicated ops manager, we act like your returns department — without the overheads. Here’s how we help:
Returns processing – We inspect, document, and restock returned items, and can grade them for resale or refurb.
Storage – We hold returned stock separately so it doesn’t mess with your main inventory.
Reporting – Know exactly what’s coming back, why, and what it’s costing you — no guesswork.
Flexible workflows – Whether you want returns repacked, scrapped, or sent back to you, we follow your exact process.
Customer support – Need us to communicate with your customers? We can be part of the returns experience, helping maintain your brand standards.
We’ve seen how much returns can eat into profit — and we’ve built a system that helps sellers protect their margins while keeping customers happy.
What You Can Do Right Now
Even if you’re not ready to outsource, there are a few steps you can take today to get control over returns:
1.Track return reasons – Start logging why items are coming back. You’ll find trends (wrong size, damaged packaging, poor expectations) you can fix upstream.
2. Create a returns SOP – Define the steps for what happens when a return comes in. Who checks it? What’s the criteria for restocking vs scrapping?
3. Update your returns policy – Make sure your policy reflects your actual capabilities. Don’t overpromise if you can’t process quickly.
4. Segment your returned inventory – Keep returns separate until inspected, to avoid restocking unsellable items.
5. Measure the true cost – Include refunds, shipping, staff time, and lost product value when assessing your margins.
Returns aren’t just a customer service issue. They’re an operational, financial, and brand issue. Treating them like a core part of your business — not just an afterthought — is how you stop the margin bleed.