Nelly.com’s game-
changing returns strategy

What if your returns process could actually improve your profits?

That’s exactly what Nelly.com has done—and their approach has transformed the way they think about returns.

Here’s how they did it, and how you can do the same.

1. Turn returns into revenue

Returns don’t have to be a cost center. Nelly quickly realized that some returns add value, while others drain resources.

For example, a customer buying two different pairs of jeans to compare texture and fit adds value. They get to decide what feels best at home.

But size-related returns, where customers buy multiple sizes just to try them on, aren’t necessary. Nelly knew this was a problem they could solve.

By improving product descriptions, adding clearer sizing guides, and enhancing images, Nelly made it easier for customers to get the right size from the start. They reduced unnecessary returns while keeping customers happy.

Tip: Focus on which returns are adding value for your customers, and which aren’t. Start by reducing the returns that stem from unclear product information.

Why: Understanding which returns add value and which don’t is critical because it helps you allocate resources efficiently and ensure that returns contribute to customer satisfaction without unnecessary costs.

How: Conduct an analysis of your return data to categorize returns based on their reason and value. Implement solutions like enhanced product descriptions, clearer sizing guides, and high-quality images to address common issues. This approach reduces returns caused by avoidable reasons and keeps customers informed and satisfied with their purchases.

2. Data is your secret weapon

At Nelly, data is everything.

They track returns down to the smallest details, like the material and design of each product. This allows them to spot patterns and take action.

For instance, if a product has a high return rate, they either redesign it or remove it from the offering. In one case, a customer bought five pairs of shorts because the images didn’t show whether the shorts had belt loops.

This was an avoidable “bad return,” one that could have been prevented with better images. Nelly now has photography guidelines that are constantly updated based on data from returns.

Tip: Use return data to improve product descriptions and designs. Focus on the details that will prevent unnecessary returns in the future.

Why: Data-driven insights are essential for spotting trends that may not be immediately obvious. This allows you to make informed adjustments to products and listings, minimizing return rates and improving customer experience.

How: Implement a system to track detailed return data, such as the reasons for returns, product types, and customer feedback. Use this data to tweak product designs, adjust descriptions, and improve visuals. Collaborate with your product and marketing teams to ensure that these changes are effectively communicated across all customer touchpoints.

3. Appoint a Returns Manager to take charge

Returns can’t be an afterthought. Nelly knew they needed a dedicated person to own the process.

That’s why they hired a Return Manager. This role has become crucial in analyzing return patterns and making improvements. The Return Manager works closely with other departments to ensure returns are optimized, and no opportunity for improvement is missed.

Tip: Assign someone in your organization to be responsible for the returns process. They should track data, drive change, and ensure returns are seen as an opportunity, not just a logistical hassle.

Why: Without someone dedicated to managing returns, potential improvements may be overlooked, leading to inefficiencies and missed opportunities for profit.

How: Appoint or hire a Returns Manager who will oversee the entire returns process, monitor data, and coordinate with departments like customer service, logistics, and product design. This person should regularly analyze return data, initiate changes to reduce unnecessary returns, and ensure that the process is optimized for efficiency and customer satisfaction.

“To truly maximize the impact, it’s essential to have someone who understands how returns affect every department and keeps the process unified. This approach unlocks valuable insights and drives improvements, transforming returns from just a logistical task into a strategic asset for the business.”

– Stefan Svensson, COO at Nelly.com

4. Block unsustainable return behaviors

What do you do when customers return almost everything they buy?

Nelly identified a small group of customers with unsustainable return habits. For example, one customer was buying items just to post photos on social media, returning 95% of their purchases.

Nelly put limits in place to block these behaviors while protecting the majority of their customers, who return items for legitimate reasons.

Tip: Set parameters to block unsustainable return behaviors without impacting overall customer satisfaction.

Why: Allowing a small number of customers to engage in unsustainable return practices can be costly and unfairly impact your bottom line. Addressing these behaviors helps maintain profitability without affecting legitimate customer returns.

How: Use your return data to identify customers with high return rates and assess the reasons behind these behaviors. Implement limits or policies that address these specific cases, such as return thresholds or account flags for unusual patterns. Communicate your policies transparently to ensure the majority of customers remain satisfied while discouraging unsustainable practices.

5. Use technology to boost efficiency

Technology is your best friend when it comes to returns.

Nelly adopted Inretrn’s digital platform, which transformed their entire process. With the implementation of QR codes for returns, they can now reject outdated returns before they even hit the warehouse. But that’s just the beginning.

Inretrn’s platform also ensures that every product is routed to the correct destination in the shortest, most cost-efficient way. This means products aren’t just coming back—they’re going exactly where they need to be, fast and efficiently.

Returns handling at the warehouse is smoother and faster, reducing bottlenecks and keeping operations running seamlessly. With fewer human errors and less manual intervention, customer service teams feel less pressure. They can focus on more important tasks rather than dealing with return-related issues.

The result? Less wasted time, improved warehouse productivity, reduced costs, and happier teams across the board.

Tip: Invest in technology that streamlines your returns process. A digital solution can prevent unnecessary returns from reaching your warehouse, saving time and money.

Why: Manual processes in returns can lead to delays, errors, and increased operational costs. Technology helps automate and streamline these tasks, making them more cost-effective and efficient.

How: Adopt a digital returns management system that integrates with your existing logistics and inventory solutions. Features like QR code returns and automated routing help reduce handling time and errors. Train your team on the system to maximize its benefits, ensuring that products are directed to their appropriate locations and reducing the burden on warehouse staff and customer service teams.

6. Optimize return shipping to cut costs

Did you know you can cut return shipping costs without inconveniencing your customers?

Nelly found that many smaller items, like tank tops, were being returned in bulky packages. By switching to smaller, more cost-effective shipping methods, they cut return shipping costs by 20%.

Customers didn’t even notice the difference.

Tip: Take a look at your return logistics. Are you overpaying for returns? Find opportunities to optimize your shipping and reduce costs.

Why: Return shipping expenses can significantly cut into profits if not managed well. Optimizing these logistics ensures cost-effectiveness without diminishing customer satisfaction.

How: Use Inretrn’s Freight Optimizer to automatically downsize your return freight to a smaller size when needed. This tool helps identify and implement more economical shipping solutions for lightweight or small products, reducing costs without compromising customer satisfaction.

Nelly’s return strategy delivers results

By Q2 2024, Nelly had dropped their return rate from 38% to 27.1%.

Each percentage point saved them millions, and their focus on reducing non-value-adding returns made all the difference. Their strategy has improved customer satisfaction and boosted their bottom line.

So, what could you accomplish if your returns process was as optimized as Nelly’s?

Ready to optimize your own returns process?

Nelly’s success shows that a smarter returns strategy can boost your profits and transform your business. Ready to see how you can achieve similar results? Book a demo with us today and discover how our platform can help you optimize your returns process, enhance efficiency, and drive profitability.