Handling the Challenges of Returns in the E-commerce Fashion Industry

As e-commerce continues to grow, so do return rates. Online return rates average between 20 to 30 percent, compared to about 9 percent for in-store sales. For e-commerce fashion businesses, return rates may even approach 60 percent.

Altogether, these numbers mean that a third of fashion logistics operations is spent on handling returns and that handling costs have substantially increased. This poses a significant challenge for fashion logistics providers.

The challenges of reverse logistics

Handling returns is a complex process that requires time, money, and resources. The following are some of the main challenges that fashion logistics providers face:

  • Increased costs: Returns processing is expensive, and fashion logistics providers must allocate significant resources to handle them.
  • Lost profits: Returns result in lost profits for retailers and logistics providers. The cost of processing returns, restocking, and reselling returned products can be significant.
  • Customer dissatisfaction: Returns can negatively impact customer satisfaction. Unsatisfied customers may leave negative reviews or not return to make future purchases.
  • Increased complexity: Reverse logistics is a complex process that requires coordination across different departments and stakeholders.
  • Environmental impact: Returns also have an environmental impact, and fashion logistics providers must dispose of products that cannot be resold.

Reducing the steps with a pouch sorter system

The numerous steps involved in the process are one of the most difficult aspects of handling returns. This is where a pouch sorter system can come into play. This specialised technology is capable of transporting, sorting, sequencing, and storing both outbound and returned items, simplifying and streamlining the e-commerce fulfilment process.

A pouch system is a specialised handling system that makes use of a series of pockets or pouches to transport and sort items. These systems are designed to maximise efficiency and minimise the number of times an item is touched.

In the returns process, the pouch sorter system eases the handling of returns by placing each item directly into a pouch rather than sending it back to the shelf or regular storage where it has to be picked again if it is ordered. The pouch system serves as an intermediate buffer for return items, which are typically re-sold. Returns needed to fulfil an order are automatically retrieved from the dynamic buffer and sent to sortation.

The pouch system has several advantages over traditional returns processes:

  • Minimises Touches: The pouch sorter system significantly reduces the number of times an item is touched, which results in reduced labour costs and a faster turnaround time for returned items.
  • Reduces Errors: With the pouch sorter system, there is less room for error, as each item is placed directly into a pouch and scanned, reducing the likelihood of misplacing or misidentifying items.
  • Streamlines Operations: The pouch sorter system streamlines the entire returns process and allows for a more efficient and automated process.
  • Improves Customer Satisfaction: By minimising the time it takes to process returns, the pouch sorter system improves customer satisfaction, which can lead to repeat business.

The cost savings of a pouch sorter system for returns are significant. By reducing the number of touches needed to process returns, businesses can significantly reduce their labour costs. Automated systems can also analyse the data on returns so providers can identify patterns and trends that can help improve the reverse logistics process.


Selecting the right technology is crucial for success in fashion logistics, but it’s not the only factor to consider. Choosing the right partner to work with can also make a significant difference in the effectiveness and efficiency of the logistics process. A trusted partner can help to ensure that the technology is implemented and employed in a way that aligns with your specific needs, and can provide valuable insights and support to help you overcome any challenges that arise. Ultimately, a successful fashion logistics operation requires a combination of the right technology and the right partnership

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