A return is not lost money if the item goes back on sale quickly. It turns into lost money when it sits in a bag in the back room for three weeks, still showing as "sold" in one system and "missing" in another, while the season ends and the price drops.
This guide is for retailers and brands that sell in a store, online and on marketplaces. It works the same way for sellers in Singapore and Malaysia handling returns after 11.11 and 12.12.
What the numbers say
The same NRF and Happy Returns report, released on 15 October 2025, found:
- Retailers estimated that 15.8% of annual sales would be returned in 2025, about $849.9 billion.
- An estimated 19.3% of online sales would be returned.
- 9% of all returns were fraudulent.
- To handle holiday returns, retailers planned to lean more on third party logistics partners (49%), hire seasonal staff for returns (43%) and extend return windows (37%).
Two of those plans, seasonal staff and longer windows, mean more returns arriving over a longer period, handled by people who are new to your process. That is exactly when a simple, written process pays off.
Step 1: Capture a reason code at the counter or in the portal
Ask for one reason from a short fixed list, not a free text box. For example:
- Wrong size or fit
- Changed mind or unwanted gift
- Damaged in transit
- Faulty
- Not as described
- Wrong item sent
Keep the list under ten options so staff and customers actually use it. Free text is fine as an extra field, but you cannot count it in a report.
Step 2: Grade the item before it goes back to stock
Every returned item should get one of three grades within a day of arriving:
- Resell. Unopened or as new. Goes straight back to available stock.
- Refurbish or repack. Needs a new box, a clean or a part. Goes to a separate location until it is fixed.
- Write off or return to supplier. Damaged, faulty or unsellable. Never goes back to available stock.
The grade decides where the item goes in your inventory system, not just on the shelf. If a refurbish item is counted as available, someone will sell it before it is ready.
Step 3: Put resellable stock back the same day
This is where most of the money is. A jacket returned on 2 January can still sell at full price that week. The same jacket found in a returns bin on 25 January probably sells on clearance.
To make same day restock work:
- Give returns their own receiving step, separate from supplier deliveries.
- Scan the item into a returns location first, then move it to available stock once graded.
- Update the quantity in one place and let it flow to the store, the website and every marketplace.
If your channels hold separate stock counts, a returned item may show as available in the store but not online, or worse, on two channels at once. Our guide on how to stop overselling across channels covers how to keep one source of truth.
Step 4: Stop returns from being counted twice
Double counting usually happens in three places:
- Buy online, return in store. The store adds the item back, and the online system also adds it back when the refund is processed.
- Exchanges. The returned item is added back but the replacement is not deducted.
- Marketplace returns. The marketplace restocks it in its own count while your system still shows it as returned.
Pick one system that owns the stock number and make every channel post returns to it. Then run a quick count on your top returned SKUs every week in January. If you need a place to start, our post on improving inventory accuracy before you buy new software has a simple cycle count routine.
Step 5: Watch for return fraud without punishing honest customers
With 9% of returns reported as fraudulent, a few basic checks help:
- Match the returned item to the original order by SKU and, where you have it, serial number.
- Check the box contents at receiving, not only at the counter.
- Flag customers or addresses with unusually high return counts for a manual look.
- Keep the refund and the restock as two separate steps, so nothing goes back to stock before it has been checked.
Most customers returning a gift are honest. The goal is to catch the empty box, not to slow down everyone else.
Step 6: Read your return data by SKU in February
Once the rush is over, export returns by SKU and reason code. Look for:
- SKUs with a return rate far above your average
- Size or fit reasons clustered on one product, which usually means the size chart or photos need fixing
- "Not as described" returns, which point to a product page problem
- "Damaged in transit", which points to packaging or a carrier
Fixing two or three product pages often saves more than any change to your returns policy.
Common mistakes
- Refunding fast but restocking slowly.
- Letting graded "refurbish" items show as available.
- Running returns from a spreadsheet that never syncs back to the store or website.
- Changing the return window without telling the warehouse team when the volume will arrive.
Where BestERP fits
BestERP, our cloud ERP, keeps inventory, procurement and multiple warehouses in one place, with real time sync between POS and the online store. That means a return graded at one location can update available stock for the store and the website without a second entry. Low stock alerts also tell you when a returned item has refilled a product that was close to running out.
If you already have a system and only need returns to flow into it properly, Ascent24 can build that integration. Write to info@ascent24.io and tell us how you sell today.
FAQs
What share of holiday sales do retailers expect to be returned?
In the 2025 Retail Returns Landscape report from NRF and Happy Returns, retailers said they expect 17% of holiday sales to be returned, consistent with previous years.
When do most holiday returns arrive?
Mostly in January, after gifts are opened and as holiday return windows close. Plan staff and receiving space for that period.
Should returned items go straight back to stock?
Only after they are graded. Unopened or as new items can go back the same day. Items that need repair or repacking should sit in a separate location until they are ready.
How do I stop a return from being counted twice?
Choose one system that owns the stock number and make every channel, including store, website and marketplaces, post returns to it. Check your top returned SKUs with a short weekly count.
How common is return fraud?
The NRF and Happy Returns report found that 9% of all returns were fraudulent. Simple checks at receiving, such as matching the item to the order and opening the box, catch most of it.
Sources
- National Retail Federation, "Consumers Expected to Return Nearly $850 Billion in Merchandise in 2025" (15 October 2025): https://nrf.com/media-center/press-releases/consumers-expected-to-return-nearly-850-billion-in-merchandise-in-2025
- BestERP product site (features): https://besterp.in/
