A customer requests a return through your helpdesk. Someone checks the order in your eCommerce platform, creates a shipping label through a carrier portal and passes the details to the warehouse. Once the item arrives, warehouse staff log it and finance processes the refund.
For many online retailers, this involves several systems and teams, with manual work at every handover. Each step might work perfectly well on its own, but bringing everything together can be difficult. How much does each return actually cost? And are you seeing the same products come back for the same reasons?
Returns management software helps coordinate the process, from the customer’s initial request through to the refund and the final decision on what happens to the returned item. It can reduce manual work and give teams a clearer picture of return volumes, reasons and costs.
That visibility matters as retailers look more closely at how they manage returns. In a 2025 benchmark produced with returns provider ZigZag, Retail Economics forecast that the value of UK online returns across non-food categories would fall to £25.1bn in 2025. The report expected the overall return rate to ease from 21% to 19.5%, partly as more retailers introduced returns charges or tightened their policies.
For retailers considering new software, the challenge is finding a system that works with existing operations and gives customers a straightforward returns experience.
What returns management software does
Returns management software connects the customer-facing returns process with the systems handling orders, shipping, warehouse operations and refunds.
Depending on the platform, features may include:
- A self-service returns portal: customers can request a return without contacting customer support.
- A rules engine: return windows, fees, excluded products and routing rules are applied automatically.
- Label and QR code generation: customers receive a shipping label or a code they can use at a drop-off point.
- Refund and exchange management: returns can be resolved through refunds, exchanges or store credit.
- Tracking and notifications: customers and support teams can see the progress of a return.
- Reporting: retailers can analyse return volumes, reasons and costs, ideally down to individual product SKUs.
Some platforms specialise in returns, while others offer returns management as part of an order management system (OMS), warehouse management system (WMS) or eCommerce platform.
That distinction matters when comparing suppliers. A standalone product may offer more specialised returns features, but it also needs to connect to your existing systems. A module within software you already use may be easier to implement, provided it covers your requirements.
What a good returns portal should do
The returns portal is the part customers interact with, so it’s often the first thing suppliers demonstrate. Look beyond the design, though. The portal needs to make returns straightforward for customers while collecting the information your team needs to process them efficiently.
Order lookup without an account. Customers should be able to find their order using an order number and an email address or postcode. This should work for guest checkouts as well as registered customers.
Structured return reasons. A consistent list of reasons makes it easier to identify patterns. Options such as “too small”, “too large” and “not as described” provide more useful reporting than free-text responses alone.
Automatic policy checks. The portal should apply your return windows, item condition requirements and exclusions, such as those for personalised goods returned because a customer has changed their mind. It must still allow customers to report faulty goods and exercise their applicable legal rights. Any returns fee should be made clear before the customer confirms their request.
Exchanges and store credit. Offering an exchange or store credit can help retain revenue that might otherwise be lost to a refund. These options should be presented clearly, without making the refund route unnecessarily difficult to find. Customers’ statutory cancellation rights for most online purchases still apply.
Convenient return options. Labels, printer-free QR codes, drop-off points, lockers and collections give customers different ways to send items back. In the same Retail Economics research, 76% of UK consumers surveyed said having a choice of returns channels was important.
Tracking and notifications. Updates at key stages, from approval to receipt and refund, help customers understand what’s happening without contacting your support team.
During a demonstration, ask whether return reasons can be tailored to different product categories and whether customers can choose different outcomes for individual items within the same order. Both can make a difference when managing a varied product range.
How returns software connects to carriers, warehouses and order management
A well-designed portal makes returns easier for customers, but the integrations behind it determine how much work the software actually removes.
Carriers
Carrier integrations can generate labels, retrieve tracking events and offer customers a choice of drop-off locations or collection services.
Check that the platform supports your existing UK carriers and the networks your customers use. Find out how quickly tracking events feed back into the system, particularly if you plan to release refunds when a parcel is first scanned.
If you accept international returns, ask how the software handles customs documentation and any country-specific requirements.
Warehouse
Once a return is on its way, your warehouse needs to know what’s coming. When the item arrives, staff need to scan it, inspect its condition and decide what happens next.
Depending on the product, that might mean returning it to stock as new, repackaging it, selling it as graded or outlet stock, sending it back to the supplier, recycling it or writing it off.
Ask where these decisions are recorded. Does the returns platform manage grading and disposition itself, or does it rely on your WMS? If you use a third-party logistics provider (3PL), check whether it can work within the returns workflow or needs to exchange data through file transfers.
The receiving process also needs to cope with fluctuations in volume. Returns compete with outbound orders for warehouse space and staff, so the workflow must hold up during peak-season order fulfilment as well as quieter periods.
Order management, ERP and payments
Different retailers store their operational and financial records in different places. Refunds might be processed through the eCommerce platform or payments provider, while stock is managed in an OMS, WMS or enterprise resource planning (ERP) system. Finance will usually reconcile transactions through the ERP or accounts package.
Before choosing a returns platform, establish which system is responsible for each record and how updates will move between them. The aim is to avoid staff having to enter the same information twice or manually reconcile conflicting records.
Stock status needs particular attention. A returned item should be recorded as received when it arrives, but that doesn’t necessarily mean it’s ready to sell again. It should only be released as sellable once it has been inspected and graded appropriately.
If those stages aren’t clearly separated, retailers risk refunding an order twice, selling stock that hasn’t been checked or showing inventory as available when it isn’t.
Helpdesk
Customer service teams need access to return status without switching between several systems to find out what’s happening.
Look for integrations that display return information within the support ticket and send exceptions back to the helpdesk with the relevant history attached.
A useful demonstration exercise is to follow one return from the customer’s initial request through to the item being inspected and returned to stock. Ask the supplier to show where each update is recorded and which systems receive it.
Where automation removes manual handling
Once the systems are connected, automation can take care of routine tasks and leave staff to deal with exceptions.
Common examples include:
- Automatic approval: returns that meet your policy requirements are approved immediately, while late requests, high-value items or flagged accounts are referred for review.
- Automatic label generation: a shipping label or QR code is created as soon as a return is approved.
- Routing by product or reason: faulty items can be sent to a repair partner, while high-value goods go through a more detailed inspection process.
Refund timing is another important decision to build into the workflow. Releasing a refund as soon as a parcel is scanned can improve the customer experience, but it also means paying out before the returned item has been checked.
Refund on scan or after inspection?
Refunding on the first carrier scan can speed up the process and reduce customer enquiries about outstanding refunds. The trade-off is that the retailer hasn’t yet confirmed the contents or condition of the parcel.
Waiting until inspection gives you more control, particularly for high-value products or returns that need closer scrutiny. However, it can leave customers waiting longer for their money.
UK consumer law sets deadlines for refunds, with different rules applying depending on the type of return.
Change-of-mind cancellations of online orders
Under regulation 34 of the Consumer Contracts Regulations 2013, traders must refund customers without undue delay following a valid cancellation.
Where the trader hasn’t offered to collect the goods, the refund must generally be made within 14 days of receiving the returned goods or receiving evidence that the customer has sent them back, whichever happens first.
If the trader has offered to collect the goods, the 14-day period runs from the date the trader is informed of the cancellation.
Deductions may be permitted for handling beyond what would reasonably be allowed in a shop, subject to the applicable statutory conditions.
Faulty goods rejected for a refund
Under section 20 of the Consumer Rights Act 2015, a refund for goods rejected under the short-term or final right to reject is due within 14 days of the trader agreeing that the customer is entitled to it. Other remedies, such as repair or replacement, follow different rules.
The practical implication is that an inspection process can’t become an indefinite reason to hold a refund. Your software should support the relevant deadlines and give staff visibility of returns that need attention.
Some retailers use different rules for different circumstances. They might refund on scan for low-value items or established customers, while requiring inspection for higher-value goods or returns flagged for review. Any approach needs to comply with the applicable refund rules.
Fraud risk also influences these decisions. Refund abuse can range from opportunistic claims to deliberate attempts to obtain refunds without returning the correct goods.
On the other hand, slow or disputed refunds can lead to card disputes, making chargeback management software relevant to the wider process.
The aim is to balance customer experience, operational control and the cost of errors, rather than apply the same refund rule to every return.
Using returns data to reduce future returns
Returns data can help retailers tackle problems that begin long before a customer requests a refund.
When reasons, product condition and final outcomes are recorded consistently, recurring issues become easier to spot. If a particular product is regularly returned because it’s smaller than expected, for example, the problem might be inaccurate sizing information, unclear imagery or a misleading description.
That gives the merchandising team something specific to investigate. Similar patterns can help identify quality issues and support conversations with suppliers.
Understanding the cost of returns takes more work. Postage is only one part of the calculation. Warehouse labour, inspection, repackaging, lost resale value, write-offs and customer service time all contribute.
Returns software can bring this information together, but only if the relevant data is available from warehouse and finance systems. Before relying on cost-per-return reporting, check which costs the platform captures automatically and which need to be supplied separately.
When returns software isn’t worth it yet
A new platform isn’t automatically worthwhile just because it provides better reporting. The business case depends on how much manual work, operational complexity and cost it can remove.
These are useful indicators when deciding whether your current setup is sufficient.
- Returns volumes are manageable. Your team can process returns without building up backlogs, even during busy periods.
- The operation is straightforward. You sell through one main channel, use one warehouse and work with a single carrier.
- Your existing software does the job. The returns features in your eCommerce platform already cover the portal, labels, refunds and reporting you need.
- Warehouse processes need attention first. If staff don’t have a consistent way to grade returned goods and decide what happens to them, new software won’t solve the underlying problem.
The case for a dedicated system becomes stronger when you’re selling through multiple channels, working with a 3PL, handling international returns or struggling to keep up with peak-season volumes.
It’s also worth reviewing your current setup if you can’t explain why products are coming back, how long refunds take or what returns are costing the business.
What to evaluate in a returns management system
If your existing tools are struggling, compare platforms against the entire returns process rather than focusing on the portal alone.
| Area | Questions to ask | Why it matters |
| Platform, OMS and ERP connectors | Is the connector native? Who maintains it? What is written back, and when? | Weak connectors bring back manual work and reconciliation errors |
| UK carriers and drop-off | Which carriers, drop-off points, lockers and collection options are supported? | Gaps limit customer choice or force a carrier change |
| Warehouse workflow | Does it support grading and disposition, or integrate with your WMS or 3PL? | Decides how quickly returned stock becomes sellable |
| Rules flexibility | Can rules vary by category, customer or market? Can your team change them without a developer? | Rigid rules push exceptions back to people |
| Exchanges | Can customers swap variants or products? How are price differences handled? | Poor exchange handling turns potential exchanges into refunds |
| Refund controls | Can refund timing vary by value, customer history or reason? | Balances customer experience against abuse risk |
| Reporting | Are reasons shown by SKU? Can cost per return be calculated? Is there an export or API? | Without usable data, the visibility case falls away |
| Pricing model | Is pricing per return, per order or by subscription tier? Are label fees separate? | Costs can rise sharply at peak volumes |
| UK consumer law | Can it track the refund deadline for each return type and show fees clearly? | Reduces the risk of missing statutory deadlines |
Measure before and after
Before implementation, record how your current process performs. This gives you a baseline for assessing whether the new software has made a difference.
Useful measures include:
- Time spent processing each return
- Time from return receipt to refund
- Time from warehouse receipt to stock becoming available for resale
- The proportion of returns resolved through exchanges or store credit
- The number of customer service contacts relating to returns
- Cost per return
Agree which measures matter most to your business before selecting a platform. Otherwise, you risk investing in better reporting without knowing whether the software has improved the operation.
Frequently asked questions
How much does returns management software cost?
Pricing models commonly include a fee per return, a fee per order or a subscription based on usage. Shipping label costs may be charged separately, and implementation or integration work can add an initial expense.
Compare the total cost against your expected returns volumes, including peak periods, rather than relying on average monthly figures alone.
Can returns software integrate with my warehouse system?
Many returns platforms integrate with warehouse systems, but the level of integration varies. Check whether the connection supports advance notice of incoming returns, receipt scans, grading and disposition, or whether it only shares basic tracking information.
Should refunds be issued on scan or after inspection?
That depends on your products, return volumes and exposure to fraud or errors. Some retailers refund on the first carrier scan for straightforward, low-value returns, while holding others for inspection.
Whichever approach you choose, make sure the process complies with the applicable statutory refund deadlines.
Do I need returns software if my platform already handles returns?
Not necessarily. If your existing platform covers your sales channels, carriers, refund processes and reporting requirements, a dedicated returns system may add cost without enough benefit to justify it.
Review the decision as your business grows or your operations become more complex.
Bringing returns into one workflow
Returns management software can help connect the entire process, from the customer’s initial request to the final decision on whether an item can go back into stock. The customer portal matters, but the integrations, warehouse workflow and quality of the data behind it are just as important.
For retailers reviewing their returns processes ahead of 2027, speaking directly to solution providers can help test what’s possible and identify where new software could make a difference.
The next eCommerce Forum takes place on 4 February 2027 at Hilton London Canary Wharf. Qualifying eCommerce and digital leaders attend as hosted buyers, with pre-arranged 20-minute meetings with relevant solution providers, alongside seminars and more.
If returns management is on your project list for 2027, find out about attending as a buyer.
Image credit: https://unsplash.com/photos/woman-checking-package-with-phone-near-laptop-and-boxes-k63Or81F8-M
