Parcel return service: TMS solutions for modern challenges

The rise of e-commerce has ushered in a new era of convenience—but it’s also brought an avalanche of parcel returns. As return volumes grow, so do the logistical challenges for retailers. Efficient parcel return service is now a core part of the customer experience.

Over 60% of online shoppers expect hassle-free returns. Retailers that fail to meet these expectations risk customer churn, while those who excel in reverse logistics can boost loyalty and lifetime value.

The growing impact of reverse logistics in e-commerce

Reverse logistics is growing exponentially, with consumers returning products worth $743 billion in 2023 – about 14.5% of total retail sales. National Retail Federation estimate that returns result in $400 billion in lost sales for U.S. retails.

But the parcel return journey is often complex and costly, involving sorting, handling and processing.

Some retailers have even started advising customers to keep unwanted items due to the high cost of processing returns, an indication of just how intricate and expensive the process can be.

What is Reverse Logistics?

Reverse logistics refers to the movement of goods from the customer back to the seller or manufacturer. It encompasses not only returns but also recycling, refurbishing and disposal. In e-commerce, reverse logistics serves three key purposes:

• Enhancing customer satisfaction: Retailers offering free and easy returns see higher conversion rates and greater loyalty.
• Recapturing value: Returned items can often be resold, refurbished, or recycled, turning potential losses into reclaimed revenue.
• Driving sustainability: A strong reverse logistics process helps minimize waste, reduce carbon impact and promote reuse.

Returns tend to spike after the holidays, with January and February now seen as the unofficial "returns peak season." The average return rate for online purchases hovers around 18.1%, making post-holiday logistics a key battleground for customer retention.

6 strategies for improving parcel return services

A smooth, transparent return experience can influence purchasing decisions and improve brand trust. Here are six proven strategies to strengthen your parcel return process:

1. Create clear, customer-friendly return policies: Clearly communicate timelines, conditions and processes. Transparency builds trust and reduces friction..
2. Offer pre-planned packaging for returns Including pre-labeled, return-ready packaging makes it easier for customers to send items back.
3. Dedicate space for returns processing:Reserve space in your warehouse or fulfillment center to handle returns efficiently and minimize disruptions.
4. Manage peak season proactively: Anticipate surges in return volumes and staff accordingly to maintain speed and service levels.
5. Use historical data to predict trends: Analyze past return data to forecast future volume spikes and adapt your operations in advance.
6. Integrate TMS with supply chain systems: A Transportation Management System (TMS) enables real-time visibility, automation and coordination across your logistics operations—critical for managing the complexities of reverse logistics.

How TMS enhances reverse logistics

A modern TMS solution is a powerful tool for managing parcel returns. Here's how it supports reverse logistics strategies:

Dual inventory management

Returns create a second inventory stream that many systems aren’t built to handle. With TMS, businesses can seamlessly track and reconcile both forward-moving and return flows, maintaining accurate stock levels and improving fulfillment planning.

Streamlined operations

Infios TMS enables seamless integration with warehouse management and order systems, reducing manual work and delays.

Data-driven decision-making

Access actionable insights from return patterns, carrier performance and customer behavior. Use this data to reduce costs, optimize policies and improve service.

Financial predictability

By tracking return-related costs in real time, TMS helps businesses forecast more accurately and budget with confidence.

Customer-centric experience

Infios TMS simplifies the return journey for customers, transforming a traditionally negative touchpoint into a brand-building moment.

Transforming Parcel Returns into Opportunities

Managing parcel returns is more than logistics, it’s about business growth. With the right systems and strategy in place, returns can become a source of differentiation.

Infios TMS empowers retailers to:

• Reduce costs without compromising service
• Improve inventory accuracy
• Enhance customer satisfaction
• Build long-term loyalty