How to Reduce Logistics Costs of E-Commerce Returns In 2025

As returns cost retailers over £25 BILLION annually in the UK alone, e-commerce stores can no longer afford to ignore their logistics costs if they want to stay in business.

Naturally, there are different reasons why the costs of returns are so expensive nowadays, including:

• People are struggling to get the right size of their dress.
• Carriers are not providing SMEs with great rates for returns (unless they’re with a returns provider).
• The ever-increasing fuel costs.
• No analytics on return reasons, which leaves repeat problems uncorrected.

Despite these struggles, there are steps that you can take to offset your returns logistics costs while handling the logistics of your returns at a global scale.

In this guide, we’ll go over the tools, strategies, and tactics that you can use to minimise the logistics cost of your e-commerce returns.

Why are return logistics so expensive?

Returns logistics are so expensive because of:

• Every returned item needs verification, grading and a routing decision (restock, refurbish, recycle).
• Returned inventory occupies warehouse space and consumes labour that could support outbound throughput.
• Low volume, fragmented returns don’t qualify for the best carrier rates unless you work through a consolidated returns provider.
• Inefficient or manual returns processes.

We’ve seen that many retailers, especially those selling across borders, find that using a returns specialist with carrier agreements and regional hubs immediately reduces per-parcel cost and complexity.

➡️ Returns management platforms that combine carrier integrations, consolidation and localised processing are particularly useful for international brands.

What are the typical costs to consider in e-commerce returns?

In an e-commerce return, there are different costs to consider, including (but not limited to):

• Reverse-logistics shipping, including last-mile return fees, cross-border duties, and premium rates if you’re forced to use your own carrier account at low volumes.
• Product verification & grading, including time, equipment and systems to confirm an item’s condition and resellability.
• Repackaging & restocking, as materials and labour to bring items back into saleable inventory.
• Labour & handling, including manual checks, data entry and triage decisions.
• Lost product value/markdowns, as many returned items are discounted or sold through lower-margin channels.
• Opportunity cost is the warehouse space and staff time used for returns rather than outbound fulfilment or seasonal peaks.

6 strategies to reduce your return logistics costs

Here are some of the steps that you can take to minimise the costs of your returns logistics:

Partner with a returns hub provider that offers early validation and grading services

Partnering with a returns hub provider like ZigZag Global will help you reduce handling time and improve your resale values.

Our returns hub in Germany offers validation, grading, and consolidation services, as well as customs clearance.

As a central consolidation point, our solution routes parcels efficiently and offers preferred carrier services for the next leg of the parcel’s journey.

The way it works is that returned parcels are validated on arrival (confirming order and SKU metadata), graded for condition (restock/refurbish/recycle), then consolidated and over-labelled for the most cost-effective onward routing.

Where cross-border paperwork is needed, the hub’s native integration with German customs supports same-day processing.

➡️ That early visibility, combined with deep integration into ZigZag’s returns portal, means refunds, exchanges and resale decisions start sooner and with better data.

💡 Beyond cost and speed, the hub helps with fraud prevention and sustainability.

Early validation and item-level grading expose suspicious patterns before refunds are issued, and localised processing plus accurate condition assessment increase the likelihood that items are resold or repaired instead of discarded.

Improve product accuracy to reduce returns

There’s nothing better than preventing returns in the first place.

Here’s how you can do that:

• Add detailed sizing guides, fit notes and multiple model sizes.
• Use 360° imagery and short product videos to reduce surprises.
• Surface real customer reviews and Q&A focused on fit and feel.
• Consider virtual try-on or sample programs for high-value categories, although this comes with a significant development cost.

This will result in fewer bracketing orders (customers buying multiples to find the right size) and lower return rates.

Implement a smart return policy

A good returns policy can nudge better behaviour without harming conversion. Here’s what you can do:

• Encourage exchanges: make exchanges faster or free to keep the sale.
• Offer store credit incentives: offer slightly higher credit value to retain revenue and increase LTV. (Consumer research shows a large share of shoppers accept store credit.)
• Reduce the free-returns window modestly or introduce paid returns for opportunistic cases. Paid return options both deter abuse and recover costs.

➡️ ZigZag supports a wide range of consumer return options, including free in-store returns, store credit, paid returns and exchanges, making it easier to test and scale smart policy changes globally while keeping a consistent customer experience.

Automate and streamline return workflows

Automation reduces touches and speeds refunds. Here’s how you can approach it:

• Implement a return management system (RMS) to automate authorisations, label generation and routing.
• Offer self-service return portals that capture reason codes, size and photos at submission to improve triage and reduce manual inspection time.
• Integrate RMS with WMS and shipping so returns flow straight into the right processing queue (e.g., restock/refurbish/resale).

➡️ ZigZag’s platform includes a customisable, multi-language returns portal that can be white-labelled and configured with multiple return outcomes (gift card, exchange, cash refund).

Our portal captures reason codes and can be tightly integrated with your systems to automate routing and reduce manual labour.

Use data to optimise returns handling

Being data-driven about your returns, you can reduce returns in the long run after evaluating the common reasons why people return products, including:

• Tracking return reasons and rates by SKU, size, cohort and channel.
• Surfacing trends so product and CX teams can fix sizing, copy or images.
• Monitoring fraud signals to reduce abusive returns.

A tool like ZigZag can help you with its advanced returns analytics, as you can compare refund solution popularity, evaluate top return reasons, and detect suspicious behaviour.

Introduce label-free, box-free return options

Label-free and box-free return options can reduce material and handling costs to improve convenience. Here’s what you can do:

Offer QR code drop-offs at carrier or retail partner locations so customers simply scan and drop, and the carriers or hub staff will handle the rest.

Use returnless refunds for very low-value items where retrieval costs would exceed the item’s value.

💡 ZigZag also supports multiple drop-off networks and in-store kiosk options, which can eliminate the need for consumer-printed labels and reduce handling steps.

What are some technological advancements that can help you offset returns costs?

The right returns tech stack can help you shrink both return volume and per-return cost. Here are 3 recent innovations in the industry that you need to be aware of:

• Return forecasting & demand planning: Predict seasonal return spikes and staff hubs correctly.
• AI-driven inspection & triage: Use computer vision to automate condition checks and assign grading at scale.
• Validation & grading partners: Early inspection at regional hubs reduces long legs and speeds refunds.

Next Steps: Offset Logistics Costs With ZigZag Global’s Return Hub

Built for retailers who operate globally, ZigZag offers an all-in-one returns platform that is designed to take over any online store’s post-purchase experience with a new service line focused on validation, grading and consolidation to turn returns from a cost centre into recoverable value.

If you’re an e-commerce leader looking for a returns hub that offers:

Early validation at intake: Confirm order and SKU metadata, capture photos and reason codes, start refunds or exchanges sooner and surface suspicious patterns before funds are released.

Standardised condition grading: Assign reliable grade codes (restock, refurbish, outlet, recycle) with photo evidence so returned items are routed and priced correctly to maximise recovery.

Intelligent consolidation & over-labelling: Batch and re-label returns for the most cost-efficient onward routing, reduce long reverse-legs, simplify customs for cross-border flows and speed time-to-resale.

Then you can book a demo to learn more about ZigZag Global.

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