The future of reverse logistics: how technology is changing the way we think about returns

Last update: 19.06.2025

In this blog:

1. Intro
2. Benefits of using technology for returns
3. Challenges of using technology for returns
4. Future of returns predictions
5. Further reading: Returns technology FAQs
   

Intro

The growing return rate in the retail industry has made management returns and the reverse logistics process a critical function for companies. Technology is playing an increasingly important role in streamlining the return management process and improving the customer experience, both for online and brick-and-mortar stores.  

Benefits of using technology for returns

The benefits of using technology for returns include: 

1. Increased efficiency: automating the returns process can reduce the time and effort required to manage returns. According to Accenture, companies that automate their returns process can reduce processing time by up to 50%. 
2. Improved accuracy: real-time visibility into the status of returned products allows companies to better manage inventory and reduce the risk of lost or stolen items. Deloitte found that companies that use technology to track returns can reduce the incidence of lost or stolen items by up to 30%. 
3. Enhanced customer experience: providing customers with a seamless returns experience allows them to initiate returns online, print shipping labels, and track their returns. PwC research revealed that 86% of customers say a positive returns experience is important when deciding whether to shop with a retailer again. 
4. Data-driven insights: valuable data on the reasons for returns allows companies to identify trends and root causes and make improvements to product quality and customer service. According to McKinsey, companies that use data analytics to optimise their reverse logistics processes can reduce costs by up to 10%
5. Reduced costs: technology can help companies reduce the costs associated with reverse logistics processes, such as shipping, restocking, and refurbishing. Bain & Company found that companies that optimise their reverse logistics processes can reduce costs by up to 20%. 

Challenges of using technology for returns

There are, however, challenges of using technology for reverse logistics, including: 

Reverse logistics can be challenging for companies due to various technological factors. One of the most significant challenges is integrating new systems with existing legacy systems.  This can be difficult and expensive unless the vendor has proven integrations with a wide range of third-party applications, from ERP and warehousing to the e-commerce stack.

Another key challenge is ensuring data security and privacy, as technology can provide valuable data on the returns process, but this data must be protected to prevent data breaches and maintain customer privacy.  

Finally, some customers may be hesitant to adopt new technology or may prefer traditional methods of returning products.  Companies must provide clear instructions, a slick experience, and support to ensure that customers are comfortable using the new technology. 

Future of returns predictions

What does the future of returns look like?  Here are our top predictions: 

1. Returns will become increasingly flexible: most merchants offer immediate refunds for returned goods, which impacts cashflow.  Forward-looking merchants are today encouraging customers returning goods to exchange them for other items – via the same returns page.  Thus, returns are helping to increase sales. 
2. Customer experience will come to the fore: As customer expectations continue to rise, we can expect to see more companies investing in slick, easy-to-use returns platforms.  More and more businesses will make the link between easy returns and customer retention. 
3. There will be a greater focus on sustainability: With growing concerns around sustainability and the environment, we can expect to see more companies prioritising sustainable practices in their reverse logistics operations. This includes initiatives such as reducing waste, recycling materials, and minimising carbon emissions. 
4. Omnichannel returns will become the norm: as the dividing line between in-store retail and e-commerce becomes blurred, we can expect to see more retailers offering omnichannel returns, allowing customers to return products through multiple channels such as in-store, online, or via mail. 

Returning products from the customer’s doorstep to the warehouse and ultimately into another customer’s hands, can be an admin-heavy job.  The right returns solutions can automate the entire process, saving money, and improving revenues and retention at the same time. 

Further reading: Returns technology FAQs

How will real-time tracking technology transform returns in reverse logistics?

Real-time tracking, powered by GPS, IoT, and RFID, enhances visibility across the returns journey. It speeds up processing, minimizes errors, and improves customer satisfaction by offering timely updates and better route optimization.

What is the impact of blockchain on returns traceability?

Blockchain ensures a secure and transparent record of each returned item. It prevents fraud, enhances tracking accuracy, and provides an immutable audit trail that supports regulatory compliance and sustainability claims.

Can AI-powered returns forecasting reduce waste and costs?

Yes. AI predicts return trends based on past behavior and product data, enabling better planning. This reduces overstock, streamlines labor scheduling, and improves asset recovery—cutting waste and operational costs.

How do returns portals contribute to operational efficiency?

Returns portals automate customer input, label generation, and tracking. They reduce manual tasks, cut support tickets, and centralize data—leading to faster, more efficient reverse logistics workflows.

What are the environmental benefits of tech-enabled reverse logistics?

Technology helps reduce carbon emissions by optimizing return routes, minimizing waste, and enabling item refurbishment. It supports greener operations while tracking progress on sustainability goals.

How do omnichannel returns enhance customer experience?

Omnichannel returns give customers flexibility—returning online orders in-store, via lockers, or through carriers. This convenience leads to higher satisfaction and loyalty while reducing return processing time.

What role do autonomous returns lockers play in reverse logistics?

Autonomous lockers allow 24/7 drop-offs and automate check-ins with QR or RFID tech. They reduce the need for staff and streamline first-mile return logistics—especially in urban environments.

How can small retailers leverage reverse logistics technology on a budget?

Small retailers can adopt cloud-based returns tools with low upfront costs. Features like branded portals, label generation, and pre-set rules offer scalable solutions without complex integrations.

What integration challenges come with adding reverse logistics tech to legacy systems?

Legacy systems may lack API support or data standardization. Workarounds include using middleware platforms or selecting solutions with out-of-the-box ERP integrations to ease the transition.

How can nShift’s technology prepare businesses for future returns challenges?

nShift’s modular returns technology helps businesses manage higher return volumes, automate workflows, reduce emissions, and integrate with existing systems—supporting a scalable and future-ready strategy.

What KPIs should companies monitor for future-ready reverse logistics?

Key KPIs include return rate, processing time, cost per return, item recovery rate, and customer satisfaction. Tracking these helps improve efficiency and align with long-term business goals.

Author

Jyo Saikia

Product Specialist Director, nShift

With extensive experience in logistics, supply chain, and IT SaaS, Jyo specializes in helping businesses optimize operations and achieve sustained success. His deep industry knowledge enables him to craft innovative strategies that deliver tangible results, ensuring customers gain a competitive edge.