What’s data-driven returns?

Every return tells a story. Are you listening?

Data-driven returns go beyond just tracking what comes back.

It’s about using those returns to improve your business—understanding which products aren’t working, which customers are returning the most, and how you can prevent unnecessary returns in the future.

In short, it’s the difference between seeing returns as a cost and turning them into a strategic advantage.

Let’s break it down.

Product-level insights: What’s behind the returns?

When products come back, there’s always a reason. 

Our platform gives you return rates on a product level, so you know exactly which items are causing friction and why. 

Maybe it’s a pair of trousers that fits perfectly—except when it doesn’t. High return rates linked to sizing issues could mean your product needs an adjustment.

With data-driven returns, you don’t just see the problem—you fix it. 

Imagine tweaking the pattern, then watching return rates drop as a result. Or maybe the fix is even simpler: adding a clearer size guide to your website. 

Either way, data gives you the clarity you need to take action.

Here’s a real example from one of our customers, Nordic Nest. 

Shortly after launching a new product, they noticed an unusually high return rate—nearly 40%. By diving into the return data, they discovered that the issue wasn’t with the product itself, but with the product image. 

The image of a placemat didn’t accurately reflect the actual item. After updating the photos to better match the product, the return rate dropped significantly.

• In the fashion industry, return rates can be as high as 30%. A study found that by implementing more detailed sizing guides and adding customer reviews, some retailers reduced their return rates by 22%.

By addressing these issues head-on, not only do you reduce returns, but you also improve customer satisfaction and retention.

Customer-level insights: Who’s returning and what can you do about it?

Knowing which products are being returned is only half the battle. You also need to know who’s returning them. 

Our platform segments customers by location, demographics, and shopping habits, giving you insights into return behavior that you can act on.

Germany, for example, is known for having return rates up to 30% higher than the rest of Europe. 

Is it due to cultural preferences? Does your messaging miss the mark for that market? 

With data, you can tweak your approach—whether by improving product descriptions for that region or adjusting return policies to better fit local expectations.

• By targeting high-return markets like Germany with tailored policies, businesses have reduced their returns by as much as 15%.
• Research shows that understanding customer return behavior can increase profitability by 10-15% by allowing businesses to focus on high-value, low-return customers.

And it’s not just geography. 

Are first-time buyers returning more items than loyal customers? Are younger shoppers less satisfied with specific products? 

By understanding the who, you can adjust everything from your marketing to your product presentation, reducing returns where they hit hardest.

Profitability insights: When returns don’t hurt your bottom line

Not every return is bad. In fact, some of your most profitable customers might be high returners.

Our platform provides unique profitability insights, showing you which customers deliver the most value—even if they return a lot. 

A high-returning customer who regularly spends big could still be incredibly valuable. 

Instead of focusing on their returns, you focus on keeping them coming back.

• A high-returning customer who spends frequently could still generate 25% more lifetime value compared to a low-returning customer who shops less often.
• Retailers who identify and focus on their most profitable customers—rather than just their return rates—can boost overall profits by up to 20%.

On the flip side, some customers with frequent returns may negatively impact your margins. 

Instead of incentivizing this behavior with free shipping or special promotional offers, you can adjust your strategy accordingly.

With data-driven insights, you can automate these decisions, ensuring these customers aren’t rewarded for behavior that hurts your bottom line. 

Automatically exclude high-returning, low-profit customers from free freight offers or discount campaigns to focus on the ones that matter most.

• Businesses that implement dynamic customer segmentation based on return behavior have reduced promotional waste by up to 15%, leading to higher profitability.

Using data to optimize returns

When you know exactly why products are coming back, who’s sending them, and how it impacts your profits, you can turn returns into an opportunity. 

Data-driven returns are your key to improving products, making smarter decisions, and keeping your most valuable customers happy.

• Companies using data-driven return strategies have reported reducing their return rates by 25%, while simultaneously increasing customer satisfaction and retention by 15%.
• The right return management system can save up to 40% in reverse logistics costs by minimizing unnecessary returns and streamlining the process.

Ready to see how your business stacks up? Use our Returns Checklist to see if you’re making the most out of your return data.