How to Handle Holiday Returns: 9 Tips

Allison Champion
7 min read
January 31, 2024

The holidays are a time for joy, cheer… and mountains of gift receipts. While the increased holiday sales feel good, the festive season also comes with its fair share of returns. 

Customer-centric brands understand that returns are a crucial part of the shopping journey, and  are a key consideration factor in a shopper’s ability to confidently make an online purchase. But navigating this post-holiday tidal wave can feel like steering a candy cane-striped raft through a blizzard of wrapping paper.

Before your efficient supply chain gets swept away by a sea of unwanted sweaters and slightly-used gadgets, let’s dive into the world of post-holiday returns and emerge equipped with tips to weather the storm.

Understanding the Impact of Holiday Returns

Statistics tell a fascinating story. Insider Intelligence projected that the total volume of retail returns in the US for 2023 will reach $627.34 billion, which represents 8.5% of the overall retail sales [1].That’s a significant chunk of merchandise returning to your loving embrace (or rather, warehouse bins). But here’s the good news: a well-crafted return policy can actually become a secret weapon.

Think of it this way: when faced with a tough purchase decision, a generous return policy acts like a magic confidence booster for your customers. They’re more likely to hit that “buy” button knowing they have a safety net, which translates to happy wallets and happy holidays all around.

How do brands transform their return policies from passive documents to proactive customer magnets? Here are some tips to keep in mind:

  • Establish a Lenient and Clear Return Policy
  • Prominently State Your Return Policy
  • Encourage Exchanges Over Returns
  • Streamline the Return Process
  • Convert Returns into Sales Opportunities
  • Prepare Your Staff for Efficient Handling
  • Implement Fraud Protection Measures
  • Leverage Omnichannel Return Options
  • Utilize Returns Logistics Companies

9 Tips for Dealing with Holiday Returns

By embracing these tips and approaching returns with a proactive mindset, you can turn the post-holiday season into an opportunity to strengthen customer relationships and emerge from the wrapping paper blizzard even stronger.

Tip 1: Establish a Lenient and Clear Return Policy

Embrace the spirit of giving with a generous return window during the holidays. Think an extra week or two to accommodate early holiday purchases, late gift-openings and indecisive giftees. But generosity doesn’t mean chaos. Ensure your policy is crystal clear, free of jargon, and readily accessible on your website, receipts, and store signage. Don’t let customers play detective to find out if their unwanted elf on the shelf qualifies for a refund.

Tip 2: Prominently State Your Return Policy

Don’t be shy about your return policy! Make it the star of the show. Put it front and center on your website, social media, receipts, and even product packaging. Think bold banners, clear headings, and easy-to-find links. Use simple language, no riddles or legal jargon. Whether you’re offering the ability to make a free return, need the product in the original packaging, have a 30 day or shorter return window, or any other store policy, make sure your holiday return policy is known.

Tip 3: Encourage Exchanges Over Returns

Turn frowns upside down and refunds into repurchases by incentivizing exchanges. Offer store credit or discounts on alternative items. Get creative! Feature complementary products alongside returned items, showcase your newest arrivals, or even surprise customers with a “mystery box” of festive favorites. Who knows, they might discover their new holiday obsession.

Tip 4: Streamline the Return Process

Make returning as easy as purchasing was. Offer online return portals, pre-printed return shipping labels, and clear instructions. Invest in technology solutions that track returns and keep customers informed every step of the way. Remember, frustrated elves make for grumpy shoppers.

Tip 5: Convert Returns into Sales Opportunities

Think of return points as mini sales floors in disguise. Train your staff to upsell complementary items while processing returns. For retailers, an example could be if someone’s returning a sweater that’s too itchy, suggest a cozy scarf or a pair of fluffy mittens. Turn their return into a chance to discover something they’ll truly love. 

Online sellers can leverage the power of algorithms! When a customer initiates a return, suggest similar or complementary items they might love instead. Ecommerce brands can also offer exclusive discounts or coupons to customers who initiate a return. This encourages them to explore other items on your site and potentially make a second purchase.

Tip 6: Prepare Your Staff for Efficient Handling

Holiday returns are like Rudolph’s red nose—bright, unavoidable, and potentially overwhelming. Equip your staff with the tools and training they need to handle the influx efficiently. Practice common return scenarios, empower them to make decisions, and remind them to keep a smile on their face. For online sellers, ensure that your customer service team is trained on navigating returns through your online portal. Ensure they know how to process requests, troubleshoot technical issues, and answer questions about return policies and procedures. Train your team to use clear and concise language, show empathy through their writing, and actively listen to customer concerns.

Tip 7: Implement Fraud Protection Measures

Not all returns are merry and bright. Be vigilant against fraudulent activities by utilizing technology and staff training. Consider using digital return receipts, limiting return quantities per customer, and training staff to identify suspicious behavior. Remember, a little Grinch-like skepticism can go a long way in protecting your business.

Tip 8: Leverage Omnichannel Return Options

Simplify returns across all realms! Offer user-friendly online portals with pre-paid labels and real-time tracking. Let customers return online purchases in-store for quick processing or exchange. Leverage mobile POS for on-the-go returns and consistent data across channels. Unify policies and enable seamless exchanges between online and offline. This omnichannel harmony keeps customers happy, your team less stressed, and your brand shining all year long.

Tip 9: Utilize Returns Logistics Companies

Why reinvent the wheel (or sleigh) when experts can handle the heavy lifting? Consider partnering with returns logistics companies like Loop, Happy Returns, or Narvar. They can simplify the return process by managing return labels, processing refunds, and even refurbishing or reselling returned items. Let them be the elves in your return workshop, freeing you to focus on making the next holiday season even merrier (and less return-filled).

Utilizing Technology and Automation in Returns Management

Holiday returns might raise your blood pressure, but the right technology can be your best friend. 

Enter software that automates returns processing – your secret weapon for streamlining returns like a seasoned ninja. Think of it as an automatic data exchange between you and your vendors. Order tracking updates, return authorizations, and inventory adjustments, all happening behind the scenes with lightning speed. No more manual data entry, no more frantic paper chases, just smooth sailing through the return storm.

And then there’s the omnichannel order management system, your ultimate control center. It seamlessly integrates online and offline orders, returns, and inventory, providing real-time inventory visibility across all channels. No more wondering where that rogue sweater ended up, you’ll have its location at your fingertips.

Analyzing and Learning from Return Data

Turns out, those returned items are a treasure trove of data waiting to be mined. By analyzing return trends and customer feedback, you can unlock valuable insights into what’s working (and what’s not) in your business.

Think identifying unpopular products, sizing issues, or even packaging inefficiencies. Each return whispers a story, and deciphering that story can empower you to:

  • Refine your product offerings: Ditch the duds, double down on the darlings. Use return data to understand customer preferences and adjust your inventory accordingly. 
  • Optimize your inventory management: With an updated inventory management software, there’s no more mountains of forgotten mittens. Use return data to forecast demand and prevent overstocking or understocking of any type of inventory.
  • Improve your product development: Learn from customer feedback and address common product complaints to create future items that hit the mark.

Ultimately, analyzing return data isn’t about pointing fingers, it’s about creating a proactive strategy. By analyzing what your customers are returning, you can adapt, improve, and build a brand that thrives, even when the holiday season throws the occasional snowball.

Flowspace: Your Partner in Efficient Holiday Return Management

For many businesses, the post-holiday season can feel like a logistical avalanche, threatening to bury them in mountains of unprocessed merchandise. Flowspace, your trusted omnichannel fulfillment management system and fulfillment software solutions provider, stands ready as your trusted compass through this seasonal storm.

Imagine a world where return processing dances to the rhythm of efficiency. Flowspace orchestrates a seamless ballet of automated workflows, real-time inventory updates, and seamless data exchange. No more clunky spreadsheets or frantic paper chases, just crystal-clear visibility of inventory and effortless management of every returned item.

But Flowspace’s magic extends beyond mere speed. Its built-in intelligence empowers you to:

  • Optimize inventory management: Analyze return trends to minimize overstocking and understocking, ensuring your shelves sing with the right products at the right time. Learn more about how to avoid stockouts in our blog.
  • Improve product offerings: Gain valuable insights into customer preferences and product performance, identifying areas for improvement and future innovation.
  • Reduce operational costs: Automate manual tasks, streamline workflows, and gain real-time cost visibility, ensuring your business hums with financial efficiency.

Flowspace also recently announced a nationwide partnership with Two Boxes to enhance reverse logistics capabilities for merchants contending with post-holiday returns and exchanges. This partnership with Two Boxes brings end-to-end returns and recommerce capabilities to sellers, enabling them to quickly and efficiently get returned inventory back to stock and on the right side of the balance sheet.

Get in touch today to find out how Flowspace can transform your holiday returns from a burden to a strategic asset!


Lebow, Sara. 2023. “How to Deal with Holiday Returns: Prevention, Promotion, and Product Selection.” Insider Intelligence. October 2, 2023.

Written By:

flowspace author Allison Champion

Allison Champion

Allison Champion leads marketing communication at Flowspace, where she works to develop content that addresses the unique challenges facing modern brands in omnichannel eCommerce. She has more than a decade of experience in content development and marketing.

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